Tara Culp-Ressler: How The Obama Administration Is Getting Serious About Lowering Health Costs
The Obama administration unveiled an ambitious plan on Monday that will make historic changes to the way that doctors get paid. The ultimate goal is to tie more of doctors’ payments to the quality of care they provide, hopefully driving down the trillions of dollars that the U.S. currently spends on health services every year. The reforms are targeted at Medicare, the government program that provides coverage for Americans over the age of 64. Most Medicare providers currently get paid through what’s called a “fee for service” system. They’re paid a flat free for every test or procedure they perform, regardless of whether those services actually improve their patients’ health. Now, the administration wants to shift the program so that more of its payments are tied to health outcomes.
Essentially, that means providers will be rewarded for keeping their patients healthy, and penalized for unnecessary services that don’t advance that goal. Proponents of payment reform are encouraged by the move — which they see as a serious step toward creating a health care system that’s based on the value, rather than the sheer volume, of services. The Affordable Care Act has been slowly moving in this direction over the past few years. The health law created alternative payment models — called “Accountable Care Organizations,” or ACOs — to incentivize providers to work together to improve patient care and cut down on costs. So far, there’s been some evidence that ACOs are successfully improving the quality of health care for Medicare patients. Some are also starting to generate cost savings. If ACOs save enough money, the participating providers earn bonuses, a goal that about a fourth of of them hit last year.
How the Obama Administration is getting serious about lowering health costs thkpr.gs/3615915—
ThinkProgress (@thinkprogress) January 27, 2015
1st clear indication we're leaving fee-for-service in much of healthcare. As I said in 2009, it's the right direction nyr.kr/1zqEwRq—
Atul Gawande (@Atul_Gawande) January 27, 2015
The First Lady (@FLOTUS) January 29, 2015
Barack Obama (@BarackObama) January 26, 2015