Frist Calls for Overhaul of Health Payments

Monday, 04 Mar 2013 02:26 PM

By Cyrus Afzali

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Former Senate Majority Leader Dr. Bill Frist has called for an end to fee-for-service payments for doctors and is advocating for a new system that bases payment on the quality of care and the value of medical services.

In a report issued Monday, Frist and his co-author, Dr. Steven Schroeder, said rewarding doctors for the quantity of treatment they provide rather than the quality is a major reason that the nation is on track to spend $4.5 trillion on healthcare by 2019.

“There is no question that we need to reform our physician payment system,” the pair write.

“Both private and public payers must take steps now to move the United States toward a physician payment system that drives higher quality and more cost-effective care and helps improve not only individual health, but that of the nation.”

Frist, a Nashville, Tenn., heart and lung surgeon who was leader of the GOP in the Senate from 2003 until his retirement in 2007, said eliminating unnecessary services alone could save more than $210 billion. In addition, the report identifies more than $500 billion in other savings that could come from excess administrative costs, high prices, missed prevention opportunities, and fraud.

The report recommends implementing drastic changes to the current fee-for-service payment model and over a five-year period moving toward a system that rewards providers for the quality and value of the care they provide. The group set a goal of testing new models of care over the transition period, with broad adoption of the quality and value model by the end of this decade.

“With a fixed price for the total [medical stay], physicians have a financial incentive to be more prudent than they would under fee-for-service,” the report states.

The report acknowledges that fee-for-service will remain a major payment factor for years to come, even after more services shift to a fixed-payment model. Because of that, it recommends regularly adjusting fee-for-service payments to encourage behavior that improves quality and cost effectiveness.

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