Obamacare’s penalties shoot for quality, hit patients

Medicare’s doctors are revolting against Obamacare’s new system for paying them. Soon enough, patients will, too.

This year, Medicare implemented a system of “value-based care,” whereby the government pays health care providers for the supposed quality of the care they provide, rather than the quantity.

But value-based care isn’t what it’s cracked up to be. The federal government has chosen arbitrary standards to evaluate doctors that don’t accurately measure quality. Doctors don’t appreciate having their practices micromanaged — and so are turning away from Medicare or the medical profession altogether.

By reducing access to care and lowering its quality, value-based care isn’t delivering much value for America’s seniors.

Under the new system, Medicare uses a “value-based payment modifier” to decide how much to reimburse doctors. It’s calculated by measuring how much doctors cost Medicare and the quality of care they deliver. The new rules quantify more than 250 quality metrics, including hospital readmission rates and how many times patients contract preventable diseases such as bacterial pneumonia or urinary tract infections.

If a doctor outscores the national average, he or she receives a larger reimbursement check from Medicare. But if he or she performs worse than average, Medicare will implement a pay cut.

These pay cuts are already happening. The Centers for Medicare and Medicaid Services recently evaluated more than 1,000 health care groups — and found more losers than winners. Fourteen groups will receive bigger reimbursement checks this year. More than 300 groups will actually receive smaller Medicare checks.

By 2017, the quality metrics will apply to all Medicare payments. Penalties are expected to double.

Consequently, medical providers are shifting resources from patients to paperwork. The new system encourages doctors to follow Medicare’s prescribed metrics for care — even if an alternative treatment might be better for an individual patient.

Further, the new standards punish hospitals for delivering excellent care to those who need it most.

Take high readmission rates, which Medicare is looking to penalize vigorously. Admitting people to the hospital multiple times would seem to indicate failure on the part of the provider. But as the authors of a 2012 study in The New England Journal of Medicine concluded, “Hospitals with a low mortality rate among patients with heart failure have higher readmission rates, presumably because they keep their sickest patients alive.”

Further, Medicare’s new measurements are blind to complicating factors, such as the socioeconomic status of patient populations. Several studies have found that, regardless of actual medical performance, value-based care rewards affluent hospitals for treating healthy patients and punishes teaching and safety-net hospitals for ministering to sicker patients.

Some doctors are so fed up they’re getting out of the practice of medicine. The same survey found that one in two doctors is planning to retire early.

That’s bad news. As the baby boomer generation ages, more people will get sick and need doctors. But they could have to wait longer and longer for appointments. According to the Association of American Medical Colleges, the United States faces a potential shortage of up to 90,000 physicians over the next decade.

These metrics for value-based care are failing to measure anything except their own failure. They’re pushing doctors away from the program and even medicine. And that’s more than enough reason for patients to revolt.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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