Health Reform in the 21st Century: Reforming the Health Care Delivery System

Abstract

Medicare and other insurers generally ignore the importance of established chronic illnesses in generating demands on the health care system and escalating costs, Institute Fellow Robert Berenson told the House Ways and Means Committee. At the same time, delivery system reforms are likely to fail unless immediate steps are taken to address the likely collapse of the primary care physician workforce in many parts of the country. He also underscored the need for a public plan -- patterned on Medicare but separate from it -- as an option for those seeking care.

Testimony

Mr. Chairman, Members of the Committee:

I very much appreciate the opportunity to provide testimony to the Committee as it undertakes an important inquiry into the crucial topic of reforming the health delivery system as part of health reform. It is a subject that I have been deeply involved with through most of my professional career. I practiced general internal medicine for over twenty years, twelve of which were in a small group practice located a few blocks from here. I have been medical director of a D.C.-area preferred provider organization and helped organize and oversee two physician-run independent practice associations (IPAs).

In the latter part of the Clinton administration, I had operational responsibility for provider payment systems at the Centers for Medicare and Medicaid Services (CMS) and was in charge of contracting with Medicare Advantage plans. In recent years, as a Institute fellow at the Urban Institute, I have been studying the effects of the Medicare physician fee schedule, as well as important innovations, including the Patient8centered Medical Home, that offer promise to improve how care is provided to Medicare beneficiaries and individuals covered under other insurance plans.

My CMS experience demonstrated to me the central role of the Medicare program in how health delivery is organized and provided. With Rick Mayes, an assistant professor of public policy at the University of Richmond, I co-wrote Medicare Prospective Payment and the Shaping of U.S. Health Care, a book that reviewed the crucial, positive role Medicare has played. Although health care spending remains a challenge for all payers, Medicare's track record, especially in recent years, has been better than that experienced by self-funded employers and commercial insurers, while offering near universal provider participation.

At this moment when we are have an opportunity to finally achieve near-universal health insurance coverage, Medicare should take the initiative—preferably in collaboration with other public and private payers—to produce additional delivery system changes in response to new challenges. The most obvious one is the pressure of health care costs. Combined public and private spending on health care services in the United States totaled nearly $2.1 trillion in 2006, or 16 percent of the economy (Catlin et al. 2008); more worrisome is that since the end of World War II, health care spending has exceeded per capita growth in the nation's economy by more than 2 percentage points, with no signs of abating (2004 Technical Review Panel).

(End of excerpt. The full written testimony is available in PDF format.)

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