Frustrated by Medicare’s price-fixing tactics?
One idea is to introduce a competitive bidding system. It’s a well-known fact, and one that strongly influences current health policy decisions, that some areas of the country have more doctors and provide more medical services than others, with no additional, appreciable benefit.
In an op-ed in The New York Times, pulmonologist Peter Bach, former senior adviser to the administrator of the Centers for Medicare and Medicaid Services, proposes a “reverse Dutch auction” for Medicare reimbursements.
In essence, Medicare would set an artificially low rate for a given area, and if not enough doctors sign up, the rate would rise. The cycle would then be repeated until there are enough physicians for the area.
The idea is to save money, especially in dense physician areas.
But I can see it working the other way as well. For instance, there are many parts of the country where the wait for a Medicare patient to see a primary care physician spans months. By tying reimbursement to demand, it can be one way to force Medicare to increase their primary care rates in order to alleviate the shortage.
It’s a novel idea, but I wonder if it’s going to gain any traction in the health care debate.
Related posts:
- Classic post: Cut Medicare payments for doctors, you’ll have fewer doctors
- Cut Medicare payments for doctors, you’ll have fewer doctors
- Op-ed: Cut Medicare payments for doctors, you’ll have fewer doctors
- Medicare now requires physician essays for hospice care, as if pre-authorizations weren’t bad enough
- Once you hit Medicare age, good luck finding a primary care doctor
- Prior authorizations for Medicare?
- Older primary care doctors can’t retire
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When asking whether doctors should be subjected to competitive bidding as a means of cost control, one must consider the types of behaviors such a policy would incentivize. Paying doctors less for their services creates an incentive for providing more service over shorter intervals. Unless doctors are rewarded for value, those adept at countering low reimbursement with high volume will out compete other physicians in light of an artificially low reimbursement rate. So, when it comes to developing policy for reimbursements, we need to answer this question: do we want quantity or quality? (Studies show that quantity doesn’t result in better health outcomes…)
That’s interesting, since I suggested that many months ago, on several occasions here
and
here
in several different forms. Personally, I like the bundled care option, market based bidding which takes care of the waste AND regional over supply and under supply at the same time and prevents the bankrupting of the Medicare National Bank.
How would this prevent the bankrupting of CMS? If anything this will increase costs. The few groups that will bite on this land mine in regions will not be able to accomodate all the medicare needs. As a result the overflow will feed into the ER, as you can assume at least one hospital will still be taking medicare. Increase ER usage equates to increased costs. This would be good in the sense CMS would be releasing some of its tallons in the medical industry that it currently exhibits with its nationwide price fixing.
Competitive bidding already occurs through IPA’s and IPO’s although most don’t realize that the process is occuring. When the leadership of a group negotiates on behalf of their members, competitive bidding is already occuring. The challenge will be to extend it regionally or nationally. I remember when we were initially discussing DRG’s back in the 80’s and trying to come up with a reasonable formula that would work regionally (not even natioanlly) ad it was a nightmare that grew into a huge mess that we still deal with today.
Reducing the individual physician to bidding on reimbursement for care will lead to either reduced access, a stampede to cash only care, or a fair number of well trained professionals leaving the practice of medicine for other environs becasue they don’t want to deal with the nonmedical hassles. The headline on the recent AMNews showing that the current paperwork required by health insurers costs $70,000 per physician annually is probably an underestimation in my experience and will only get worse with a single payor system or a national “super-carrier” of medicla insurance.
P.S. Sorry for the typos. Too used to autocorrect :-;
Folks, please correct me if I’m wrong. But in a TRUE auction, you have multiple, independent, free agents, exchanging a commonly denominated currency, in a generally non-emergent situation, where there are no artificial constraints (i.e., agents can enter or leave the market place). Is that how you would characterize a typical clinical situation? Or are you talking about doctors forming labor organizations and ‘bidding’ on contracts for a certain locale over a specific epoch? I guess I don’t see why this isn’t the equivalent of an HMO where the doctor (and hospital) take all the risk since they can’t legally walk away, nor let their practices lapse. (I don’t say ‘ethically walk away’ since morality has nothing to do with it, obviously).
Why not use an approach that works well for academe, the armed forces, politicians, the clergy, and management in general? Pay doctors – all doctors, every doctor, regardless of specialty – enough to make them feel appreciated, special, insulated from doubt and fear of the market, and as envied by the community as Jay-Z. Make it tough to reach that height, easy to fall (tougher and easier than now). Reward the practice of medicine as a calling, and not an economic convenience. Reward for Being, not for Doing. If you really are a doctor, you’ll do what a doctor should do. If you are rewarded for doing what a doctor should do, you never become one.
I agree wholeheartedly with the post by Hicks. With some programs now such as Medicaid we see the result of paying the lowest rate which a minimum acceptable number of practitioners will accept: a race to the bottom in quality of care by flourishing and profitable medicaid mills–even while sound quality practitioners can’t afford to participate.
A better idea for “competetive bidding”. Allow full and free balance billing in the public programs. Let physicians balance bill to their full fee or a part thereof according to their own choice on a case by case basis. Some phsicians will “bid” for the Medicare/Medicaid market by accepting the rate the state pays as full fee. Others will accept it on a case by case basis as an act of charity. The patients themselves can effectively bid for how much of a premium value to place on incremental quality and service in their choice of how much balance billing they will accept when they seek care. Freedom will solve a lot of problems if we will just try it.
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