Pay Some Doctors More to Save Money

Paul Levy

Posted 3/26/12 on Not Running a Hospital

One of the strange things about health care in America is the manner in which decisions are made about how different kinds of doctors should get paid for their services.  It turns out that the system is controlled in a way most consumers would find unbelievable. As noted by the Wall Street Journal:

 

Three times a year, 29 doctors gather around a table in a hotel meeting room. Their job is an unusual one: divvying up billions of Medicare dollars.

The group, convened by the American Medical Association, has no official government standing. Members are mostly selected by medical-specialty trade groups. Anyone who attends its meetings must sign a confidentiality agreement.

Yet the influence of the secretive panel, known as the Relative Value Scale Update Committee, is enormous. The Centers for Medicare and Medicaid Services, which oversee Medicare, typically follow at least 90% of its recommendations in figuring out how much to pay doctors for their work. Medicare spends over $60 billion a year on doctors and other practitioners. Many private insurers and Medicaid programs also use the federal system in creating their own fee schedules.

Continue reading “Pay Some Doctors More to Save Money”

Off Based Optimism: Part I

Paul Levy

First posted 7/31/11 on Not Running A Hospital

I like to view myself as an optimist, but two recent reports demonstrate the danger of misplaced or premature optimism.  I fear that they are influenced by what the authors hope will be the case rather than what has proven to be the case.  I find this generally to be the situation in the health care arena, where public policy is often based on shallow interpretations of data and on people’s political wishes rather than rigorous analysis.

The first comes from Karen Davis at the Commonwealth Fund, in a blog post entitled, “Health Spending Continues to Moderate, Cost of Reform Overestimated.”  We should know from the title alone that the conclusions cannot be accurate:  It is just too soon to reach them.  It would be like drawing a picture of climate change from one year of data about temperatures.

Here’s an excerpt:

A recent report from the Centers for Medicare and Medicaid Services (CMS) shows that national health spending grew at a historically low rate of 3.9 percent in 2010, almost paralleling the 3.8 percent increase in our gross domestic product (GDP) last year. This is . . . good news for the federal government as the slowdown indicates that the cost of health reform has been overestimated.

Continue reading “Off Based Optimism: Part I”