Congress returns to Washington this week and the future of health reform is still very much in question. Congressional negotiations continue to center on cost-cutting proposals, such as the “value index” currently being discussed in the Senate Finance Committee. The value index, being proposed under the guise of encouraging efficiency and reducing “unnecessary” geographic variation in spending, would effectively shift billions in Medicare funding from higher-cost places like California to lower-cost places like Minnesota, Wisconsin, and Iowa. The California physician payment cuts could be 10 to 15 percent.

CMA vehemently opposes this money grab that is being pushed by representatives from rural states. These proposals are based upon an oversimplified analysis of regional spending differences in Medicare – fostered by data from the Dartmouth Atlas and propelled by the Obama administration. What these measures would actually do is undercut health care for the poor and minorities.
CMA believes it is unacceptable to consider fundamental changes to the Medicare payment formula without further study to understand what accounts for the differences in medical practice costs by region, such as practice costs, ethnic diversity of the population, and socioeconomic status of patients.

“Increasing efficiency and eliminating overspending are laudable goals that doctors support,” says CMA President Dev GnanaDev, M.D. “But directing funding away from entire regions with lots of poor minorities who did not have access to care will not achieve those goals.”

The biggest source of health care spending is lack of access to care, not regional overspending. When patients don’t see a primary care physician, health problems can develop and fester into more-expensive-to-treat maladies.

CMA believes health reform should focus on proactive, cost-saving, preventive care. Congress should promote primary care, prevention, and care coordination to reduce unnecessary ER visits and hospitalizations.

In contrast, the value index and proposals like it would reward doctors and patients with the least challenges and short-change the regions with the biggest health care needs. This short-sighted approach would do nothing to improve efficiency and reduce costs.

CMA is aggressively fighting the value index and other similar proposals. CMA and others in organized medicine were successful in removing a simlar cost-cutting proposal from HR 3200, the House health reform legislation. The bill as currently written would instead give the Institute of Medicine (IOM) one year to complete a study on regional variations in costs and quality of care, including an analysis of practice costs and patient socioeconomic and health status factors, and make recommendations to the Department of Health and Human Services.

Click here for more health reform information, including CMA’s analysis of HR 3200.

Contact: Elizabeth McNeil, 415/882-3376 or emcneil@cmanet.org.