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There may be common ground on health care — and more money for state providers

WASHINGTON, D.C. — Despite the heated rhetoric surrounding health-care reform here, there may be some common ground that advocates say could mean far more money for Minnesota health care providers.

Some form of the same proposal is included in the Senate’s health-care bill, the House’s bill and two separate scaled-down framework proposals, one led by President Obama and the other by Blue Dog Democrats like Rep. Collin Peterson.

That issue of agreement is including a quality-of-care metric as part of the Medicare reimbursement rate formula, an issue long championed by some medical centers like the Mayo Clinic in Rochester, Minn. Though the House and Senate versions differ, and neither Peterson nor Obama have offered specifics of how their plan would work, advocates see the correlation as a sign that, despite the fractious debate in Washington, some quality-of-care metric may yet become law this year.

The current Medicare formula doesn’t consider patient outcomes, and as a result some hospitals in Texas and south Florida can get paid double what Mayo does for performing the same procedure, even though their patients don’t have the same success rates.

“If we want better outcomes, better safety, better service and lower costs, we should align our payment system so we do that,” said Jeff Korsmo, executive director of the Mayo Clinic Health Policy Center.

Quality-of-care, also known as pay-for-value, has been the top priority for most Minnesota lawmakers during the health care debate this session — and something everyone seems to agree on. Back in July, Minnesota’s entire congressional delegation signed on to a letter encouraging the Obama administration to include quality-of-care in any health care bill.

“All Americans pay equally into Medicare, yet beneficiaries in Minnesota are severely disadvantaged in the essential benefits they receive when compared to citizens in other states, such as Florida, New York, or California. Why are Minnesotans paying higher premiums for prescription drugs, dental, vision and hearing services while residents of other states receive those benefits free of any additional cost?  This flawed Medicare formula continues to penalize Minnesota taxpayers, patients, providers, hospitals, counties, and the entire health care sector that provides high-quality, low-cost care,” the letter read.

Rep. Tim Walz, a Democrat whose district includes the Mayo’s flagship center in Rochester, said he’s considering proposing pay-for-value as a stand-alone piece of legislation — though he added that opposition from some in states like New York, Florida and Texas who benefit most from the present funding formula may require the provision to be packaged with something else to be able to pass.

“I’m convinced, and Mayo is convinced that you can literally save hundreds of billions a year to be used to insure those who aren’t insured and make sure that you’re changing the way that health care is delivered,” Walz said.  “In all actuality, if we passed only four pages of this bill and it was the four sections of this bill [that cover quality-of-care] then we would get real cost containment and reform.”

Here is a recent letter to members of Congress from executives at Mayo offering their views on health care issues.

Comments (3)

  1. Submitted by Steve Titterud on 01/26/2010 - 11:28 am.

    According to the House clerk’s office, the count of representatives from California, New York, and Florida sum to 117 out of the 435 members.

    These 117 can be expected to mostly oppose “pay for value”, as their in-state providers whose revenues will suffer can be expected to apply pressure to preserve those revenue streams. These providers would lose a LOT of revenue.

    So far in the health care debate, no matter what high-minded measures are proposed, no matter how clearly they are in the national interest, it has always come down to bargains which compensate interested parties for lost revenue streams.

    The hospitals and the pharmaceutical industry are fine examples of this in the most recent bills; and previously, the pharmaceutical industry in the Medicare Part D legislation. The consumer’s interest and the public interest end up having very little to do with it – in fact, these usually get a good screwing.

    In spite of this, the potential savings for all the winners in “pay-for-value” are very big – a good beginning – and will be quite popular outside of NY, CA, and FL. Perhaps this might be a case where the losers amongst the interested parties don’t have to be compensated for their loss, so that genuine savings can ensue.

    If “pay-for-value” were to be packaged with even a modest tort reform to rid our system of the most outrageous medical malpractice settlements, it would be a BIG winner, legislatively speaking, gathering votes from both sides. (e.g., limit attorney’s fees and awards, + set *some kind* of reasonable cap on compensation for pain & suffering). I’m still waiting for someone to offer this bait to the conservatives. I don’t think they could resist it.

  2. Submitted by Bernice Vetsch on 01/26/2010 - 02:28 pm.

    But who would decide the “reasonable cap” to be imposed?

    Tort reform would harm patients whose lives are changed forever by doctor or hospital errors or malpractice or occurring as the result of a bad driver. Where would the limit be set for becoming a paraplegic at the age of 15 or 20, for instance?

    The quality of care argument is used here to show how Medicare costs can be decreased. Perhaps what should be done instead is to institute equity be giving every state’s patients the same breaks as those in Florida, New York and California.

    Perhaps we should start over, as some suggest, but this time put single-payer not just on-the-table but at the head of the table. Saving $400 billion per year while guaranteeing quality health care to 100 percent of our entire population sounds pretty good to me. Only ideology stands in the way.

  3. Submitted by Steve Titterud on 01/26/2010 - 04:34 pm.

    Ms. Vetsch – I agree, single payer and 100% population coverage sounds great to me, too. The problem is, it ain’t gonna happen, not this time around.

    The point is to attack costs where they are excessive and unproductive.

    The “pay-for-value” model would put our money in the right place, a big win. But as Rep. Walz notes above, resistance to it might require additional measures to pull in votes so we could get the benefit of “pay-for-value”. Otherwise, maybe we get nothing.

    The worst influence of stratospheric awards is that they encourage defensive medicine and unnecessary tests – defined by the CBO as “tests and procedures that do not actually improve health outcomes”, which they estimate at $700 billion annually. Now, the influence of lawsuits doesn’t account for all of that, but it is no doubt substantial.

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