Paying for Value in Medicare


David Ignatius wants Barack Obama to forget about the uninsured and focus on changing the health care delivery system:

If liberals really want to show they are serious, they should begin with our existing single-payer behemoths, Medicare and Medicaid. Cortese argues that the White House should mandate that, within three years, these programs will shift from the current fee-for-service approach to a system that pays for value — that is, for delivering low-cost, high-quality care. If doctors performed unnecessary tests that ballooned costs, their compensation would be reduced. And doctors would be compensated by regional formulas, to encourage them to work cooperatively in local networks where they could all make more money by practicing better medicine. […]

This “pay for value” approach would amount to a cultural revolution in American health care. It would take our bloated system and make it cheaper and better. The adjustments wouldn’t be easy, and the medical profession would balk unless respected doctors such as Cortese led the way.

I think there’s a lot of logic to this point of view. At the same time, the implication that the reason Barack Obama isn’t doing this is because “liberals” aren’t “serious” could really stand for some more scrutiny. Similarly, the idea that the medical profession might under any circumstances not balk at this is a bit nuts. No professional guild ever embraces the idea that they should be forced to completely change the way they do business. Anyone who proposed doing this would be savaged by medical professionals who would convince seniors that it amounted to a drastic reduction in their standard of care.

Indeed, Ignatius might have noticed that the health reform bills pending before congress already do take small-but-important steps in this direction and it’s already freaking seniors out. Nevertheless, allegedly unserious liberals are happy to vote for such bills. It’s moderate and conservative legislators who are balking.