There’s no question the Accountable Care Act needs work – everyone agrees on that.

So let’s talk about the specifics – what needs fixing, why, and how can we get those fixes passed.

First, let’s understand how bad our current system is. Some who want to repeal and/or replace the ACA continue to publicly state we have “the best health care in the world.”

While that may – or may not – have been true at some point, it is increasingly clear that the US health care system is not anywhere close to best in class. A study done by the Commonwealth Fund compares our system to those in ten other industrialized countries, with sobering results.

Here are key findings:

• Adults in the United States are far more likely than those in 10 other industrialized nations to go without health care because of costs, have trouble paying medical bills, encounter high medical bills even when insured, and have disputes with their insurers or discover insurance wouldn’t pay as they expected.
• One third (33%) of U.S. adults went without recommended care, did not see a doctor when sick, or failed to fill prescriptions because of costs, compared to as few as 5 percent to 6 percent in the Netherlands and the U.K.
• One-fifth of U.S. adults had major problems paying medical bills, compared to 9 percent in France, the next highest country, 2 percent in the U.K., 3 percent in Germany, and 4 percent in the Netherlands.

One finding is particularly scary: “Although the uninsured were at highest risk for skipping needed care, working-age U.S. adults with below-average incomes who were insured all year were significantly more likely than those with above-average incomes to go without needed care because of costs and have serious problems paying medical bills — nearly half (46%) went without needed care and one third had one bill problem, double the rates reported by above-average income insured adults.”

You read that right – having insurance does not mean you get health care, and if you do, you still have to pay a substantial portion of the bill out of your own pocket.

The study examined health care and health insurance in eleven countries, all with much lower costs than the US — a differential that undoubtedly helps them compete in international markets. As globalization continues, American companies will find the disparity in health care costs will be a growing problem, diminishing their ability to compete with companies from Germany, Japan, Korea, and Switzerland.That said, ACA is anything but perfect. Let’s start our discussion with something that isn’t in the bill: Medicare physician payment reform.

Fixing Medicare’s horrendously broken physician reimbursement scheme known as RBRVS is critical. Congress has to come up with a long term solution that:

a) better recognizes the primary importance of primary care

b) incentivizes outcomes rather than pays for piece work

c) is less likely to be abused by Congressional cowardice and ineptitude

A big part of the solution is already in place – the Independent Payment Advisory Board (IPAB). This from California Healthline:

Beginning in 2014, IPAB must recommend Medicare spending cuts if the program’s growth rate exceeds the average of the consumer price index and the Medical Care CPI. Barring congressional action to make equivalent cuts, IPAB’s recommendations would become law. The board would exempt decisions affecting hospitals and other provider groups until 2020, but the Congressional Budget Office estimates that IPAB still could hold down Medicare spending by $15.5 billion between 2015 and 2019, according to a new report from Stephen Zuckerman of the Urban Institute.

A good start to be sure, but just a start. And note that we’ve still got to wait ten years before IPAB can address hospital costs, ten years that will likely produce significant inflation driven by technology, utilization, and price increases. We’re already seeing hospitals successfully thwart the new severity-adusted DRGs through more sophisticated coding…

Instead, we should move up IPAB’s effective date by at least a year, and ideally two for physicians and perhaps seven years for facilities.

If we are serious about deficits, then let’s get serious. What the new Congress does about IPAB will tell us a lot about whether it will live up to the oft-voiced commitment to reduce government spending.

What does this mean for you?

Watch what Congress does about physician payment reform. If this isn’t addressed in a meaningful, comprehensive, and sustainable way than there’s little chance Medicare costs will be controlled until IPAB goes into effect.

Joseph Paduda is the principal of Health Strategy Associates, and blogs at Managed Care Matters.

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