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RCP: Much criticism has been focused on the current pay-for-procedure structure that many argue financially incentivizes doctors and hospitals to perform unnecessary procedures. In other words, the more procedures, tests and surgeries performed, the more money hospitals, doctors and medical equipment vendors make, regardless if the patient gets better.

How should we change those incentives so that doctors and hospitals are performing only the necessary procedure for patients to get better?

Senator Wyden: Pay-for-Performance or fee-for-service reimbursement rewards doctors and hospitals for volume -- not keeping patients healthy or being efficiency. Pay-for-Performance is clearly one tool that can change the incentives to reward quality. Patient decision aides can help guide people through their treatment options for the most careful kinds of decisions on their health that they might make: surgery, chemotherapy and hospice. Patient decision aides lay out your treatment options and the medical evidence in an unbiased way.

Again we come back to the fact that right now there are no incentives really for providers and individuals to manage costs. The patient says “My employer pays for health care, I’ll just have to accept what I have. I don’t even know what I’ve lost out on in terms of wages in terms of purchasing health care.” So, the pay for performance on the provider side and patient aides on the patient side will sends costs down, addressing regional disparities and rewarding areas that deliver quality.

Bundling services, or paying a flat rate for a set of services, is another option for squeezing waste out of the system. Episodic care is one of the best ways to get more value for the Health Care dollar. In the Healthy Americans Act we’ll see a boost for the providers who coordinate care for patients with multiple chronic conditions.

And we now have examples from the states, from demonstration projects, and from the private sector in many of these areas relating to purchasing value that we ought to pick up on.

Full Transcript of the RCP-Wyden Interview