5 ways health care will look different in the post-SGR era

Robert M. Wah, MD , Former President

Our nation stepped into a new era for health care last week when it adopted legislation to eliminate Medicare’s sustainable growth rate (SGR) formula.

Medicare had been locked in persistent instability thanks to this failed budgetary gimmick created in 1997. Yes, you read it correctly: 1997. That’s back when we were using dial-up connections, the general public was just becoming aware of the possible Y2K catastrophe and Google had yet to appear on the market.

For more than a decade, the unified voice of medicine tirelessly called on lawmakers to release Medicare into the 21st century. And now it has happened.

With SGR behind us, we now can build a forward-looking health care system that puts patients first—a system in which we can provide cost-effective care with top-notch health outcomes in a sustainable practice environment.

Here are five ways our health care system will begin to look different:

  • Medicare and TRICARE patients will no longer face constant uncertainty over whether they might lose their access to care.  The perennial threat of devastating payment cuts under SGR made it difficult for many physicians to know whether they would be able to keep their doors open for treating these patients.  
  • Physicians’ practices will be more sustainable. Under the new law, many of the competing quality-reporting programs in Medicare will be consolidated and better aligned. The risk of penalties also has been substantially reduced, and physicians now have potential for earning significant bonuses.    
  • The path will be cleared for new models of care. The new law not only removes the financial instability caused by the SGR formula but also provides monetary and technical support for those who choose to adopt new models of care suited to the 21st-century needs of physicians and their patients. One of our primary goals at the AMA is to further lift physicians’ regulatory burdens and provide practical resources to advance professional satisfaction and practice sustainability. Now that the SGR is out of the way, we can ramp up these efforts.   
  • Health outcomes will be improved in the clinic setting and the community.  Chronic diseases have become the primary sources of poor health and death today. Treating these conditions requires new approaches, and the new law permanently requires Medicare to pay for care management of these patients. We have an initiative underway that is developing ways physician practices can partner with their patients and the community to prevent two of the most common chronic conditions—heart disease and type 2 diabetes—before they start. We’re also advocating for Medicare and other insurance plans to cover evidence-based prevention programs. 
  • Physicians in training will be taught how to practice in the new health care environment. Even as the health care system undergoes dramatic change, an AMA consortium of medical schools is exploring how to prepare the next generation of physicians for practicing in the new environment. Students will learn how to succeed in new models of care, provide high-quality but cost-effective care, and team up with other health care professionals and the community so their patients can lead the healthiest lives possible.

Just as we partnered in the past to end an unsuccessful system that hindered our practices and threatened our patients, let’s step into the future together. Let’s shape this new era of health care into one in which our profession and our patients thrive.