Wednesday, August 22, 2012

Obamacare and Fee-for-Service

On this blog, a point that I have made more than once is that Obamacare is moving Medicare away from a fee-for-service model----a model in which Medicare reimburses doctors for every service that they provide to their patients, thereby incentivizing doctors to order more services for the patients in order to make more money, whether the patients need the services or not.  Critics of this approach have maintained that the focus of Medicare should be on health results, not on reimbursing every service that the doctor performs.

But there is debate about whether or not Obamacare actually moves Medicare away from the fee-for-service model.  I won't go back to every post where I said that it does and correct myself, since that could be tedious, plus I may say that Obamacare undermines fee-for-service in future posts, since I have written some of the posts months in advance.  But I will post here some links that relate to the debate----one link that argues that Obamacare does move Medicare away from fee-for-service and offers documentation for that claim, and another link that argues the opposite.

1.  Stephanie Mencimer of the progressive Mother Jones argues here that Obamacare is moving Medicare away from fee-for-service.  She states the following:

"[Conservative mayor of Saratoga Springs, Utah, Mia Love] pointed to doctors who buy new equipment and then are driven to use the equipment on as many patients as possible to pay for it. To put an end to such practices, Love said the country needs to move away from the fee-for-service health care model and toward a 'fee for outcomes' system. 'If we start aligning the incentives with the outcomes we'll start getting better health care, we'll get better services, and we’ll get more health care available for those who need it,' she said.  Love seemed unaware that Obama has already made huge strides in doing just these things through the Affordable Care Act. The health care reform law created and funded a host of new projects to move Medicare away from fee-for-service practices and towards different payment models, such as Accountable Care Organizations. These groups of providers work to coordinate care for patients and reduce duplication of service and unnecessary hospitalizations. If they succeed, they can share in the savings they help create. The law also includes pilot projects in which Medicare will reimburse health care providers for 'episodes' of care, rather than for every service provided, thus creating incentives for doctors and hospitals to better coordinate care and focus on outcomes—just as Love suggested." 

2.  Conservative columnist John Ransom here argues otherwise, as he refers to an article on the web site of the American Academy of Family Physicians.  This article quotes M.D. Robert Berenson of the Urban Institute:

"From the American Academy of Family Physicians:

"The U.S. health care system will continue to rely on a fee-for-service payment model for at least the next eight to 10 years, making it incumbent on policymakers to work on fixing flaws in the system for the short term. That's the opinion of health policy expert Robert Berenson, M.D., a senior fellow at the Urban Institute, who spoke as part of a panel on Medicare physician payment during the Family Medicine Congressional Conference here May 14-15.

"'It is going to take us a while to move to something new, and I would guess there will be parts of the country in which fee-for-service will be with us for a very long time,' said Berenson. 'We probably will not have the organization developed to take on new payment models and the collaboration and integration that most of these payment models envision in the near future.'"

Berenson appears to be arguing that Obamacare technically does aim to move Medicare away from fee-for-service, but it will take a while.  That's what I can't stand about Obamacare: It seems to take a while for some of its reforms to become reality.

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