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Medicine and Public Policy |

Moving beyond Round Pegs and Square Holes: Restructuring Medicare To Improve Chronic Care

Jennifer L. Wolff, PhD; and Chad Boult, MD, MPH, MBA
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From the Johns Hopkins Bloomberg School of Public Health and Johns Hopkins University School of Medicine, Baltimore, Maryland.


Note: Portions of this article were based on a presentation by Jennifer L. Wolff at the American Geriatrics Society Conference “Research Agenda for Comorbid Disease and Multiple Morbidity in an Aging Society” on 4 March 2005. Our title is an adaptation of Bruce Vladeck's April 2002 report “Round Pegs and Square Holes: Medicare and Chronic Care,” published by the National Academy of Social Insurance.

Acknowledgments: The authors thank Gerard Anderson and Antonio Wolff for their assistance with the manuscript.

Grant Support: None.

Potential Financial Conflicts of Interest: None disclosed.

Requests for Single Reprints: Jennifer L. Wolff, PhD, Department of Health Policy and Management, Lipitz Center for Integrated Health Care, Johns Hopkins Bloomberg School of Public Health, 624 North Broadway, Room 692, Baltimore, MD 21205; e-mail, jwolff@jhsph.edu.

Current Author Addresses: Drs. Wolff and Boult: Johns Hopkins University, 624 North Broadway, Room 692, Baltimore, MD 21205.


Ann Intern Med. 2005;143(6):439-445. doi:10.7326/0003-4819-143-6-200509200-00008
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Chronic disease is the norm rather than the exception among Medicare beneficiaries, yet Medicare's benefit structure and reimbursement mechanisms are poorly aligned with high-quality chronic care. This disconnect is thought to undermine the quality of chronic care, thereby contributing to excess program spending and placing beneficiaries at risk for undesirable health outcomes. Despite widespread recognition of this mismatch, there is little compelling evidence to suggest that successful quality improvement initiatives would reduce the costs of the Medicare program. This paper describes state-of-the-art chronic care innovations to date, discusses ongoing and planned efforts by the Centers for Medicare & Medicaid Services to test related changes to Medicare's benefit structure and provider reimbursement, and suggests opportunities for future progress in this area.

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How to make "pay for performance" pay
Posted on December 10, 2005
Glenn S. Ross
Sentara Medical Group
Conflict of Interest: None Declared

To the Editor:

Medical journals are replete with discussions about pay for performance plans for reimbursement of primary care services for chronic disease management (1,2). Pay for performance proponents hold that economic incentives can drive physician behavior, and in turn "improve" the care rendered. However, legitimate concerns have been raised including inaccurate data acquisition by payors and imperfect information linking specific data variables to health outcomes. Cherry-picking by providers to avoid treating the more complexly ill patient is inevitable (and further will likely fall disproportionately to Internists as compared to other primary care providers). This may result in access problems for the most sick and vulnerable patients, and frustration for Internists. Finally, perceptive primary care practices will aggressively dismiss poorly compliant patients who by their behavior place the practice's performance "at risk." This may increase overall costs of care as these patients rely on emergency departments for care.

The fundamental question of what pay for performance programs are attempting to reward, and how successful they would be in doing so, is unanswered. One report of a pay for performance program on the West Coast demonstrated that paying based on achievement of specific targets rewarded those practices with the best performance at baseline most. Those who improved performance most received only a small proportion of bonus payments (1).

Physicians have the knowledge to provide proper care to our patients. We are familiar with breast, colon and cervical cancer screening guidelines. We understand ADA recommendations, NCEP guidelines, and JNC-7 algorithms. We are stymied by patients who are collectively overweight, burdened by high pharmaceutical costs, and less than fully compliant with prescribed treatments.

To be sure, physician services (especially primary care) need substantial across the board reimbursement increases. Paying providers performance "bonuses" is problematic and unproven to affect patient outcomes. There is room for other creative ideas in the arena of improving the nation's health at a reasonable cost. How about providing incentives to patients instead of providers? For example, a system of pay for performance whereby Medicare patients are eligible for semiannual 10-15% rebates of their premiums based on the ability to achieve pre-specified targets. To be certain, the devil is in the details, but such a system could finally ally patient, provider and payor with a unified goal, improve outcomes, and reduce health care costs. Truly a win-win-win situation.

Lawrence (3) insists, "We urgently need to change course." This idea is a start.

Glenn S. Ross, MD, FACP

1. Rosenthal MB, Frank RG, Li Z, et al. Early experience with pay for performance. JAMA. 2005; 294:1788-1793.

2. Wolff JL, Boult C. Moving beyond round pegs and square holes: restructuring medicare to improve chronic care. Ann Intern Med. 2005; 143: 439-445.

3. Lawrence DM. Chronic disease care: rearranging the deck chairs. Ann Intern Med. 2005; 143: 458-459.

Conflict of Interest:

None declared

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