MedPAC eyes cost-cutting strategies

The commission is studying private-sector initiatives that could be adapted to Medicare.

By Joel B. Finkelstein, AMNews staff. July 12, 2004.

Washington -- Categorizing physicians based on how expensive they are, in a fashion similar to the tiering of pharmacy benefits, is just one strategy that the Medicare Payment Advisory Commission is evaluating to make the program a more efficient purchaser of care.

Medicare already has begun to study the cost and quality benefits of disease management for chronic conditions, including diabetes, congestive heart failure and chronic obstructive pulmonary disease.

MedPAC's June report examines the private marketplace's experimentation with other approaches, such as physician profiling and report cards, as well as incentives for beneficiaries to choose doctors and hospitals that offer good outcomes at low cost.

"The implicit question is whether some of these strategies can be used in Medicare," said MedPAC Executive Director Mark Miller, PhD.

The commission stated that Medicare could reduce its spending per beneficiary without compromising patient care.

"There are opportunities for getting the same level of quality and outcome with spending less, certainly in the high expenditure areas," said David A. Kindig, MD, PhD, professor of preventive medicine at the University of Wisconsin and director of the Wisconsin Network for Health Policy Research.

These strategies, known as value purchasing, generally involve directing patients to physicians, hospitals and others based on measures of cost, quality, efficiency and/or outcomes.