How Fixing Medicare’s Physician Fee Schedule Could Lead to Higher-Value Care
Fee-for-service has long been criticized as a flawed system of paying for health care: it encourages the delivery of more services, rather than the right care for each patient. While the Centers for Medicare and Medicaid Services has been exploring alternative payment models that would encourage physicians to deliver better value for their patients, these models are layered on top of the Medicare physician fee schedule — the architecture supporting fee-for-service that is itself in need of significant retooling.
In a new Health Affairs article written with Commonwealth Fund support, Robert Berenson, M.D., of the Urban Institute and Paul B. Ginsburg of the USC-Brookings Schaeffer Initiative for Health Policy break down the elements of the physician fee schedule to identify opportunities to improve its accuracy and its use as a mechanism for incentivizing higher-value care. As the authors argue, physicians’ relative costs should not be the only basis for determining value.
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