IOM Urges Congress Not To Shift Medicare Payments To Pay More In Areas With Low Costs

A panel of experts says the government should by wary of suggestions that cutting payments to high cost areas and rewarding low-cost areas would help improve care and reduce Medicare costs.

The New York Times: Don't Shift Payments By Medicare, Panel Says
Adjusting Medicare payments to reward doctors and hospitals in regions that provide high-quality care at low cost would be a bad idea, the National Academy of Sciences said Wednesday. After a three-year study, the academy's Institute of Medicine rebuffed arguments by members of Congress from states like Minnesota and Iowa who say Medicare has shortchanged their health care providers for decades (Pear, 7/24).

Kaiser Health News: IOM Finds Differences In Regional Health Spending Are Linked To Post-Hospital Care And Provider Prices
Big health spending variations throughout the country are largely driven by differences in the use of post-acute services such as skilled nursing homes and home health care by Medicare beneficiaries, and by higher prices that some hospitals and doctors charge commercial insurers, according to an Institute of Medicine report released Wednesday (Rau, 7/24).

Modern Healthcare: Reform Update: IOM Won't Back Geographically Based Value Index
Congress should not adopt a geographically based value index for Medicare because healthcare decisions are not made at the regional level, but rather at the physician or organizational level, an Institute of Medicine committee concluded in a report released Wednesday. The findings in the 178-page study reiterate the committee's preliminary observations in an interim report this year: Because individual physician performance varies, an index that is based on regions is not likely to encourage more efficient behavior among providers and is unlikely to improve the overall value of care (Zigmond and Evans, 7/24).

MedPage Today: IOM Criticizes Geographic Pay Plan In Medicare
While it's long been known that Medicare spending varies greatly across geographic regions, the IOM committee sought to understand if cutting payment to high-cost areas would save money without affecting quality, or would incentivize providers to be more cost-effective. After reviewing spending and outcomes data, the committee concluded that health care involves a wide array of players from solo practitioners to large hospital systems and "opportunities for value improvement exist at all levels of healthcare decision-making" (Pittman, 7/24).

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