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It's On: American Enterprise's Thomas Upbraids AMA's Langston for 'Stonewalling'

By John Reichard, CQ HealthBeat Editor

April 3, 2007 -- The verbal exchanges at American Enterprise Institute gatherings are usually spicy, but it appears they'll become even hotter now that former House Ways and Means Chairman Bill Thomas is part of the mix.

Minus his gavel, Thomas nevertheless dominated the policy debate at an AEI forum on physician payment Tuesday, standing in the audience during a question-and-answer portion and sternly lecturing Edward L. Langston, the chairman-elect of the American Medical Association, for resisting quality-based payment.

Thomas' message, delivered as if he were still in Congress and Langston were a recalcitrant child: Forget an overhaul of the Medicare physician payment formula if doctors delay a performance-based payment strategy.

The "sustainable growth rate" formula, known as the SGR, sets doctors up for years of payment cuts because Medicare outlays have exceeded the rate established by the physician spending formula in Medicare.

"I don't know whether you wrote your comments or someone wrote them for you, but what I heard was the same old story and that is, you say there is high quality," said Thomas, delivering what he said would be a comment that would "obviously" be followed by a question. "You need to make sure patients have high quality. You have no measurements to determine whether that occurs or not.

"We tried for years to put in measurements for high quality," Thomas said, but added he had heard "a degree of threat" from the AMA that cost-cutting would mean patients would lose service.

"You've indicated you'd be willing to move to other considerations once SGR is repealed," Thomas told Langston, apparently referring to quality-based payment. "Let me underscore this . . . it isn't going to happen."

Thomas went on to stress the need for quality-based payments, saying they are also cost-effective, and accused Langston of not following suggestions.

"As recently as December you were stonewalling in terms of accepting quality measures to get that payment," Thomas said. "Do you understand that the solution to your problem with the SGR lies in your ability to accept the changes that a number of folk have continued to tell you are necessary? You accept them, you bring them to Congress, we can move them, and we can work with the administration to make them happen, but the choice is really yours. Do you accept it?"

Langston calmly replied that doctors have developed scores of quality measures and began doing so before Medicare began moving to tie measures to payment. Getting the measures accepted within the medical profession has been important because it promotes physician "buy-in," he told Thomas.

With Thomas out of Congress, his views on the subject may seem unimportant. But Congress needs all the ideas it can get on how to change the formula.

Doing so will be extremely expensive and require bipartisan support, and no Republican has stepped forward in Congress to replace Thomas as the leading GOP thinker on Medicare payment issues.
Aside from Thomas' comments from his spot in the audience, the actual speakers at the forum offered various strategies for getting a handle on physician spending.

Former Medicare and Medicaid Director Gail Wilensky said SGR should only be replaced if payments for doctor services are "bundled." That would entail setting a fixed payment for a number of services used to treat a chronic condition rather than continuing the system of separate payments for each individual service.

Wilensky also endorsed bundling payments to consortiums of doctors and hospitals, encouraging them to work cooperatively on high-volume, high-cost procedures. A fixed payment shared by both types of providers would encourage them to keep costs well below the payment level, thus boosting profits while holding down Medicare spending, Wilensky suggested.

Bruce Steinwald, an official with the Government Accountability Office, recapped testimony given March 6 previewing the soon-to-be-released results of a study on the feasibility of comparing efficiencies among doctors in the Medicare program.

The study concluded that Medicare has enough data to allow valid comparisons of how many tests and procedures an individual physician orders compared with others to get the same medical outcome for a given condition.

A first step would be to share these data with the doctor to encourage adoption of more efficient care, Steinwald said. Another possible step would be to set payments in a way that rewards efficient providers and penalizes inefficient ones. Widespread adoption of this approach could begin to rein in Medicare doctor spending growth, Steinwald said.

Thomas put the matter more forcefully after the forum. Inefficient providers should not get paid, he said. "Why should taxpayers pay for something that isn't effective?"

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