New Physician Payment System Proposed by Congress

Posted in Health Care , Health Insurance

January 8th, 2010

As the health care overhaul bills still make their way through Congress, some wonder – when everything passes – will medical costs lower. Apparently, there is no adjustment, per se, to the traditional “fee for service” payments for doctors; however, Congress (both House and Senate) has proposed new financial incentives for doctors that could cut medical costs and improve patient care.

The Creation of ACOs

The House and Senate bills have included provisions that encourage the creation of Accountable Care Organizations (ACOs). The idea of these organizations is that if all the doctors who take care of you (primary care, specialists, your hospital) worked together – and their financial fates were connected – you would get better care and the cost wouldn’t be as high.

While neither House nor Senate has plans in their bills to make this concept permanent, they would offer bonuses to participating doctors and groups if they met or exceeded certain quality and cost targets. If the ACO project passes with the health care overhaul bill, it would first only be limited to Medicare.

Could it Work?

While there is no official opposition to the ACO project, some question whether it could actually work. Physicians in particular say they won’t have the time or management expertise to negotiate contracts with other physicians and hospitals. Others say that the health care system is already littered with pilot projects and research studies to reduce medical spending. But while most are good ideas, they’re hard to implement.

The only hope that Congress – and patients looking for lower medical expenses – can rest with at this point is that the incentives proposed will be enough to convince doctors and hospitals to hop on board.

Do you think ACOs will work?