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State of the Nation's Health Care Presentation 2005

Robert B. Doherty
Senior Vice President
Governmental Affairs and Public Policy
American College of Physicians

My name is Bob Doherty. I am senior vice president, governmental affairs and public policy for the American College of Physicians.

The ideas we are putting forward today to improve quality and lower costs are a marked departure from the failed cost containment strategies of the past. The difference is that we are proposing policies to support and strengthen the patient-physician relationship, not undermine it.

  • Instead of the failed strategy of having insurance plans or government contractors second-guess doctor's decisions, we are proposing to empower patients and their physicians by using information technology to provide them with the most up-to-date information on prevention, diagnosis, treatment and management of disease.

  • Instead of the failed strategy of reimbursing doctors the same amount without regard to the quality, we propose to give physicians the choice of getting paid in part based on how well they do in attaining quality improvements.

  • Instead of the failed strategy of paying doctors only when they see the patient to for an acute illness, we are proposing to give physicians a fee for coordinating and managing the care of patients with chronic diseases.

  • Instead of the failed strategy of imposing payment cuts that devalue the patient-physician relationship, we are advocating that Congress stabilize Medicare payments to allow physicians to invest in health information technology and other practice improvements.

  • Instead of imposing more unfunded mandates on doctors, we are proposing that the federal government use incentives-not more regulations-to encourage use of health information technology to support quality improvement.

  • And instead of a legal system that pits patients against their doctors, we are calling for legal reforms to restore the trust between patient and doctor.

How do we propose to do accomplish these objectives?

First, Congress and the administration must prevent further cuts in Medicare payments. Without a solution to the sustainable growth rate problem, Medicare payments will be cut by 5 percent or more each year for the remainder of the decade-or by more than 30 percent by 2013. Under this scenario, it is inconceivable that physicians will have the resources available to spend the tens of thousands of dollars required to acquire health information technology and other quality improvement programs. In other words, physicians who are struggling to survive economically because of Medicare payment cuts will have enough trouble making payroll, never mind spending money on electronic medical records.

Second, we are calling on Congress to enact a National Health Information Incentive Act to encourage adoption of electronic medical records and other health information technology in small offices. This legislation, to be introduced soon by Representatives John McHugh (R-NY) and Charles Gonzalez (D-TX), is based on ideas originally developed by ACP. The legislation addresses two principal barriers to health information technology: lack of standards and lack of financial and reimbursement incentives.

Among other things, the bill will authorize the Secretary of HHS to provide loans and grants to help physicians in small practices to help them acquire health information technology.

It will also direct Medicare to provide reimbursement incentives to physicians who use technology to improve patient care, including such options as an add-on bonus payment for Medicare visits and care management fees when supported by electronic medical records, and separate payments for e-mail consultations with patients.

Third, we are advocating that Congress authorize a pilot test of a new model for improving the care of patients with chronic diseases in small and medium size physician practices.

Under this model, patients with complex and multiple chronic diseases would be encouraged to select a physician as their medical home. A medical home is a single point of care where patients can go to get treatment and trusted advice on navigating the complex health system.

Physicians who enroll their practices as a "medical home" would receive a care management fee and be eligible for performance-based bonus payments. In return, they would agree to implement information systems to facilitate efficient and effective care and use real-time evidence-based clinical decision support tools.

This proposal differs from the new physician group practice demonstration project that CMS announced yesterday, since our proposal is focused on physicians in small and mid-sized groups, not just those in the largest group practices.

Your packet includes a new ACP paper, "Patient-Centered, Physician-guided Care For the Chronically Ill: The American College of Physician's Prescription for Change" that fully explains the model that would be used in the pilot program.

Fourth, we are urging that Congress expand a performance-based demonstration program for small physician practices that was created by Section 649 of the Medicare Modernization Act.

The Section 649 program is currently limited to a few hundred practices in four states. Expanding the program will give CMS a much larger universe of experience and evidence on how to tailor physician incentive programs to be most effective.

Fifth, we are calling on Congress to reform the medical liability system. The tort system creates a climate of distrust and defensiveness between patients and their doctors. It fails to deter physician negligence, provide timely compensation to injured patients, or resolve disputes fairly. We strongly support President Bush's call for caps on non-economic damages along with consideration of other approaches that may prove to be effective.

Finally, we are calling on Congress to expand coverage for the uninsured and to preserve existing safety net programs. Patients without health insurance are the least likely to have a relationship with a physician, and therefore are the least likely to benefit from use of health information technology and performance improvement programs.

The College recognizes that we are proposing these initiatives at a time when the mounting federal deficit will make it hard to persuade Congress to spend money on anything. However, the initiatives we are proposing today will direct federal dollars toward programs that hold the promise of improving quality and lowering costs.

A recent study concludes that health information technology could result in health care savings in excess of $77 billion per year.

Incentives for coordination and management of care would help reduce the staggering economic costs of caring for patients with chronic diseases. To illustrate, 14 percent of Medicare beneficiaries have congestive heart failure but account for 43 percent of Medicare spending. About 18 percent of Medicare beneficiaries have diabetes, accounting for 32 percent of Medicare spending.

Finally, the College is willing to submit the reforms we are proposing to the test by evaluating their effectiveness in well-designed demonstration projects and pilot studies.

We expect that the results of these studies will show that models that support and strengthen the patient-physician relationship will lead to better quality care at lower cost. But we are not asking for the government to accept this on faith, but to give us the opportunity to show what we all intuitively know to be true, which is that:

An investment in the patient-doctor relationship is the best investment of all.

Dr. Francis and I will be pleased to answer your questions.

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