The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
Abstract
In testimony before the Senate Finance Committee, Robert Berenson, M.D. explores possible reasons that integrated care organizations that include multispecialty group practices have not become a major feature of the U.S. health system despite prominent success stories. These organizations are often penalized financially for undertaking activities that reduce costs because the benefits of efficiency are not internalized to the organization. Berenson makes the case that current payment incentives embedded in Medicare and private payer approaches promote behavior that may not benefit patients, such as rewarding preventable hospitalizations and producing a mismatch between the services patients need and those that fee schedules encourage.
The text below is an excerpt from the complete document.
Read the full written testimony in PDF format.
Testimony
Chairman Baucus, Senator Grassley, and Member 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 incentives to promote health care delivery system 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 I co-founded and 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-owned independent practice associations.
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 Senior Fellow at the Urban Institute, I have been studying the effects of the Medicare Physician Fee Schedule, as well as important innovations that offer promise to improve how care is provided to Medicare beneficiaries and the American public, including the Patient-Centered Medical Home.
For the more than 30 years that I have been in and around discussions of health care system reform, the idea of organizing physicians, hospitals, and other professionals and providers into integrated and accountable organizations better able to manage the complexity of patient needs has usually assumed the policy high ground. The original concept of health maintenance organizations, developed by Paul Elwood and colleagues, assumed the development of integrated physician groups, and Alain Enthoven’s vision of managed competition assumed replacement of unaccountable and independent physicians and hospitals with organizations that were better able to improve quality and manage costs. Over the years, these organizations have been variously labeled “multispecialty group practices,” “integrated delivery networks,” “physician-hospital organizations,” “accountable health organizations,” and “organized delivery systems,” or other terms to reflect changing fashion and nuanced differences in their configurations.
Proponents of this form of health care delivery have pointed to real-world examples of organizations that exemplify the best of breed and the potential of new organizational forms to improve care. Indeed, for most of my career, the same organizations have been cited: the Permanente Medical Group, the Mayo Clinic, Intermountain Healthcare, and the Geisinger Clinic, now the Geisinger Health System. Recently, there has been one interesting addition to the list of cutting-edge organizations that are reengineering how health care is being delivered to improve value – the Veterans Health Administration -- which demonstrates that government programs also can get it right.
(End of excerpt. The entire testimony is available in PDF format.)
The views expressed are those of the author and should not be attributed to the Urban Institute, its trustees, or its funders.
Usage, posting and reprint of materials on the UI web site:
Most publications may be downloaded free of charge from the web site in PDF format. This information may be used and copies made for research, academic, policy or other non-commercial purposes. Proper attribution is required. Copyright of the written materials contained within the Urban Institute website is owned or controlled by the Urban Institute. Posting UI research papers on other websites is permitted subject to prior approval from the Urban Institute—contact paffairs@ui.urban.org.
If you are unable to access or print the PDF document please contact us or call the Publications Office at (202) 261-5687.
Disclaimer: The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
PDF
Printer-friendly summary
