Former CMS chief launches "do tank" focused on health care

Washington -- The Medicare physician payment system will be one of the first issues tackled by a new health care policy shop headed by one of the program's former chiefs.

The Brookings Institution on July 24 announced the formation of the Engelberg Center for Health Care Reform under the direction of senior fellow and former Centers for Medicare & Medicaid Services Administrator Mark B. McClellan, MD, PhD. Supporting grants will come from Alfred B. Engelberg, a former patent attorney turned philanthropist, and Leonard D. Schaeffer, a former health insurance executive who now serves as an adviser to the private investment firm Texas Pacific Group.

The new center aims to investigate problems with health care quality, cost and access throughout the system. By developing real solutions for policymakers to adopt, it will go beyond the scope of the typical Washington think tank, Dr. McClellan said.

"I view this as a 'do tank,' not a think tank," he said. "It's a center for collaborating on how to accomplish effectively shared goals and ideas, not a center for writing papers in an ivory tower."

One of the first problems the Engelberg Center will try to solve is the current state of the Medicare physician payment system. Dr. McClellan plans to team up with Dartmouth University professor and researcher Elliott S. Fisher, MD, MPH, to investigate how various payment reforms would affect practicing physicians and the Medicare trust fund.

Dr. Fisher's participation is notable because he, along with fellow Dartmouth researcher John E. Wennberg, MD, is a leading expert on the relationship between the volume and quality of physician care in different geographic areas. The policy solutions the new collaborative will explore will build on the pair's findings that higher volume and intensity of care is linked to worse patient outcomes, Dr. Fisher said.

"Now we're talking about a lot of spending that everybody now acknowledges is not necessarily producing any value for Medicare beneficiaries," he said.

"That changes the conversation and gives us an opportunity to think about ways of changing the physician payment system that can sustain physician incomes and reduce the growth in Medicare spending."

By combining Dr. Fisher's access to Dartmouth's vast health care quality and spending database with Dr. McClellan's strong standing and connections in the health care policy world, the collaborative has a good chance of getting policies put into effect, they said.

Pay-for-performance leanings

Drs. McClellan and Fisher have expressed support for using physician pay-for-performance as one way to raise quality and lower costs in Medicare. Both said a shared savings model for physicians that bases bonuses on how much money doctors are able to save Medicare through improved care likely will be a primary reform option the center will explore.

"In practice, this is not going to be particularly easy," Dr. Fisher said. "We're going to have to address physician concerns that whatever we're doing won't disrupt current care patterns and that it will preserve their future incomes."

The American Medical Association and other physician organizations have challenged the contention that more physician services automatically lead to poorer health outcomes and that pay-for-performance will reduce costs for the federal government. Increases in volume -- and the costs that go along with it -- are expected when doctors provide more needed preventive services and aggressive disease treatments as part of a continuum of high-quality care, the Association has said.

Drs. McClellan and Fisher have acknowledged that doctors also face other pressures to provide a higher volume of care. Both physicians, for instance, have helped conduct studies concluding that medical liability pressures lead to defensive medicine and higher costs for Medicare in certain areas.

Although physicians disagree about the best way to address higher health care costs while boosting quality, one thing they should agree on is the need to gauge how policy changes will affect Medicare spending and practicing physicians, Dr. McClellan said. Physicians likely would not approve of the path the government would take on Medicare payment reform if policymakers simply became frustrated with rising costs and growing evidence that they are not getting enough of a health care value for the money spent.

"You will see renewed pressure for across-the-board cuts in payments, across-the-board restrictions on access -- the blunt instruments that are the final common pathway of public policy when all else fails," he said.