Doctor PhotoWith the implementation over the next few years of the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act, including the gradual build-out of ‘Physician Compare‘, a consumer website lauched by the Affordable Care Act, we are entering a new era of physician accountability. 

MACRA is a quality measurement and payment system for physicians who treat Medicare patients. Beginning in 2019, physician payment will be much more tightly tied to quality and performance measures.

With the attention to the inefficiencies of physician payment, MACRA may trigger a “disruptive innovation” in health care. In group practices large and small, and individually, physicians will have the incentive to address the failings that vex our health care system. As a reminder, these include:

  • A 25 percent to 30 percent rate of unnecessary, inappropriate, or excessive care;
  • All too common misdiagnosis and medical errors;
  • Care whose “value”—results for the money paid—is suboptimal;
  • High and escalating prices, the highest paid physicians in the world, and an unsustainable cost growth trend; and,
  • The most expensive health care system in the world even as it yields poorer overall results compared to other developed nations that spend less.

Doctors clearly are not to blame for the totality of these failures. But since roughly the year 2000, consensus has grown that no gains can be made in tackling the above problems without changing the drivers of physician behavior. They are the main actors in the system; they deliver the care and order it. In doing so, they generate the majority of costs. Increasingly, they also run health care systems and hospitals.

Many avenues to changing physician behavior exist: regulation and oversight; education and training; professional standards and rewards; peer pressure and review; community standards; the threat of malpractice; performance/quality measurement; financial incentives; and competition.

This post reflects on the last three of those avenues — performance/quality measurement, financial incentives, and competition.

Performance And Quality Measurement

Assessing physician performance as a way to drive quality improvement and consumer choice is coming under newly intense scrutiny. Measurement was supposed to become easier, better, and more meaningful with the development of electronic health records. That hasn’t happened. So the field remains largely dependent on direct reporting and claims data.

At the same time, the number of measures has proliferated; it’s now well over a 1,000. And the application of these measures via Medicare, insurers, health systems, and payers has been chaotically executed. Some experts advocate a 50 percent reduction in the number of measures.

Physicians and their staffs are now spending an unacceptable amount of time dealing with the reporting of quality measures — 15 hours per physician per week at a cost of just over $40,000 per doctor per year.

It is also suggested by experts that this time commitment and level of scrutiny has deepened physician dissatisfaction and burnout, with the majority of doctors in a 2014 survey expressing negative feelings about their profession and its future.

But despite physicians’ grumbling, new attempts to rate doctors are actually proliferating, as consumers’ interest in and engagement with this information grows. Millions of people are now rating their doctors online and media organizations, such as Consumers Checkbook, are using Medicare data and other data to probe physicians’ quality of care, and issue consumer-friendly report cards. Here too, though, methodology and results have stirred up controversy.

Financial Incentives

Into this contentious environment comes MACRA. It mandates financial incentives starting at 4 percent of Medicare reimbursement, as bonus or penalty, in 2019 and rising to 9 percent in 2022 for physicians who choose to enroll in what the Centers for Medicare and Medicaid Services (CMS) has dubbed the Merit-based Incentive Payment System, or MIPS. 

Doctors in MIPS must report performance measures to CMS. They’ll then be graded on four factors: quality-of-care (30 percent); resource use (30 percent); meaningful use of electronic health records (25 percent); and clinical practice improvement activities (15 percent). Quality-of-care metrics must include patient experience.

Alternatively, doctors can become part of an Alternative Payment System, such as an Accountable Care Organization.

Although the American Medical Association and other physician organizations helped design and generally support the new payment scheme, they disagree with many of the proposed details. These were aired in a plethora of comments to CMS in late 2015.

Competition

Basing payment on performance is one way to change physician behavior. Another way is to foster competition based on those same measures of performance and quality. That happens at the insurance plan and payer level but it can also happen at the consumer level. Doctors are already vying for network inclusion, for example, and group practices are being scrutinized by everyone. Indeed, it’s likely that under MACRA virtually every physician will be profiled based on their quality of care, resource use, patient experience, use of data and technology, etc.

Looking Ahead

First, physicians have a legitimate distaste that the burden of measurement today is excessive. It’s time to overhaul a dysfunctional measurement scheme and strive, where we can, to let doctors focus on being doctors. For too long, the lack of physician accountability let our health system function at low levels of performance and poor value.

Second, there’s reason to be optimistic: The science of measurement is improving, as is the art of public reporting. And, by all accounts, CMS is committed to creating a much better payment incentive system under MACRA, and to making Physician Compare a meaningful site.

Third, financial incentives work. By 2022 or so, the majority of doctors will either have 30 percent to 50 percent of their income tied to performance (with government plus private-sector payment initiatives) or be salaried in an integrated system. That’s perhaps the right direction.

Fourth, consumer choice in a robust marketplace must be part of the solution. It works in other areas of our economy; indeed, it’s the foundation of our economy. As consumers face rising premiums and higher out-of-pocket spending, they deserve no less than to be armed with clear comparative information on health plans, providers, treatment options, and costs.