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Hearing on Physician Organization Efforts to Promote High Quality Care and Implications for Medicare Physician Payment Reform

July 24, 2012

Hearing on Physician Organization Efforts to Promote High Quality Care and Implications for Medicare Physician Payment Reform 










July 24, 2012


Printed for the use of the Committee on Ways and Means


DAVE CAMP, Michigan, Chairman

WALLY HERGER, California
PAUL RYAN, Wisconsin
DEVIN NUNES, California
JIM GERLACH, Pennsylvania
TOM PRICE, Georgia
RICK BERG, North Dakota
DIANE BLACK, Tennessee
TOM REED, New York

RICHARD E. NEAL, Massachusetts
JOHN B. LARSON, Connecticut
RON KIND, Wisconsin

JENNIFER M. SAFAVIAN, Staff Director and General Counsel
JANICE MAYS, Minority Chief Counsel

WALLY HERGER, California, Chairman

PAUL RYAN, Wisconsin
DEVIN NUNES, California
JIM GERLACH, Pennsylvania
TOM PRICE, Georgia

RON KIND, Wisconsin





Colonel (Retired) Lawrence Riddles, M.D.
President of the Board, American College of Physician Executives

David L. Bronson, M.D.
President, American College of Physicians

Michael L. Weinstein, M.D.
Chair, Registry Board, American Gastroenterological Association

Peter J. Mandell, M.D.
Chair, American Academy of Orthopaedic Surgeons Council on Advocacy

Aric R. Sharp, FACHE, CMPE
CEO, Quincy Medical Group

John Jenrette, M.D.
CEO, Sharp Community Medical Group


Hearing on Physician Organization Efforts to Promote High Quality Care
and Implications for Medicare Physician Payment Reform 

Tuesday, July 24, 2012
U.S. House of Representatives,
Committee on Ways and Means,
Washington, D.C.


The Subcommittee met, pursuant to notice, at 10:02 a.m. in Room 1100, Longworth House Office Building, Hon. Wally Herger [Chairman of the Subcommittee] presiding.

[The  advisory of the hearing follows:]


     *Chairman Herger.  The Subcommittee will come to order.  We are meeting today to hear from physician organizations who are working to improve the quality of care delivered to patients.

     These initiatives have been shown to be successful and may hold promise as we seek to reform and update the Medicare Physician Payment Formula.

     For the past 18 months, we have been seeking both formal and informal input on physician payment reform from the physician community and other relevant stakeholders.

     At our last hearing on this topic, we heard about private sector approaches to reforming payments.

     Today’s hearing is a third in a series on reforming the flawed SGR and focuses on quality improvement activities developed by medical societies and the practical implications of these activities across physician practice settings.

     We will hear shortly from physician executives, physician organizations representing both primary and procedural care, and the leaders of two group practices, all of whom are engaged in efforts that focus on improving the quality of care delivered to patients.

     A common theme will be that providing optimal quality and outcomes requires setting appropriate standards, building the right infrastructure, and using the right data to measure performance.

     Our intent is to hear from the physician community about how to reform the Physician Payment System so that quality, efficiency, and patient outcomes are accounted for in a fair and fiscally responsible manner.

     As I have noted before, merely averting sustainable growth rate cuts each year is not a fix.  A permanent solution has been elusive in large part because of the substantial costs associated with repealing SGR, currently estimated at nearly $300 billion over ten years.

     However, this Committee must do more than just simply repeal the SGR.  We must also determine how to improve the existing Medicare payment system and work with physicians to develop other payment models that preserve and promote the physician‑patient relationship and reward physicians who provide high quality and efficient care.

     Many are concerned about the lack of alignment among Medicare’s current incentive programs to enhance quality, such as e‑prescribing, meaningful use of electronic health records, and the so‑called “value based modifier.”

     Such programs were not developed nor led by the physician community.  While some feel these programs are a step in the right direction, I am concerned about taking a top down Government centered approach to defining and rewarding quality of care.

     Physician organizations have been working with their members for many years to build a solid foundation for defining and operationalizing high quality care.

     For example, many groups are actively developing evidence based guidelines, quality performance measures, data collection tools, and clinical improvement activities.

     It is my hope we can learn from and build upon these efforts as we work with the physician community to develop a 21st Century payment system.

     Before I recognize Ranking Member Stark for the purposes of an opening statement, I ask unanimous consent that all members’ written statements be included in the record.  Without objection, so ordered.

     *Chairman Herger.  I now recognize Ranking Member Stark for five minutes for the purpose of his opening statement.

     *Mr. Stark.  Thank you, Mr. Chairman, for holding this hearing today and exploring ways that we can promote high quality patient care.

     As we try to replace the SGR Medicare Formula, it is important that we understand what is happening in the private sector and learn how to incorporate that into any Medicare Formula change.

     I look forward to hearing the suggestions of our witnesses today.

     We have avoided replacing the SGR in favor of easier reforms, and if we do not fix it, we are going to find that many of our outstanding physicians will begin to turn away from Medicare.

     We have tried to reform SGR for over a decade.  You are quite right, 200 to $300 billion to pay for it is tough.  We do have an opportunity to pay for it, the Overseas Contingency Operations Fund, basically war spending, could be used this year for a permanent SGR fix.

     There is a good deal of bipartisan support for the idea, and I would like to insert without objection a letter signed by America’s physician professional societies supporting the use of these OCO funds to permanently resolve the SGR problem.

     Three of the organizations are represented by today’s witnesses, the American College of Physicians, the American Gastroenterological Association, the American Association of Orthopedic Surgeons, who have joined in signing this letter.

     [The information referred to follows: The Honorable Pete Stark]

     *Mr. Stark.  I look forward to hearing from our witnesses, and the discussion that follows, and I yield back.

     *Chairman Herger.  Thank you, Mr. Stark.  Today we are joined by six witnesses.

     Dr. Lawrence Riddles, who is a recently retired Command Surgeon for the U.S. Air Force and current President of the Board for the American College of Physician Executives.

     Dr. David Bronson is President of Cleveland Clinic Regional Hospitals, and serves as the President of the American  College of Physicians.

     Dr. Michael Weinstein, a practicing gastroenterologist in the D.C. metro area, and Chair of the American Gastroenterological Association’s Registry Board.

     Dr. Peter Mandell, who is a practicing orthopedic surgeon, and Chair of the American Academy of Orthopedic Surgeons Council on Advocacy.

     Mr. Aric Sharp, CEO of Quincy Medical Group in Quincy, Illinois.

     Dr. John Jenrette, the CEO of Sharp Community Medical Group in San Diego, California.

     You will each have five minutes to present your oral testimony.  Your entire written statement will be made a part of the record.

     Dr. Riddles, you are now recognized for five minutes.


     *Dr. Riddles.  Good morning, Chairman Herger, Ranking Member Stark, and members of the House Ways and Means Subcommittee on Health.

     I am Dr. Larry Riddles, a retired military surgeon and President for the American College of Physician Executives, commonly known as ACPE, the nation’s largest health care organization for educating physician leaders.

     It is my privilege to share some of ACPE’s thoughts on Medicare physician reimbursement challenges which you and your colleagues are wrestling with.

     We are not here to make an argument to preserve physician income, rather, we are here to move towards a desired end point that must to achieve timely and equitable access to high quality health care that is physician led and reimbursed fairly.

     Thousands of ACPE physician leaders are implementing innovative cost saving initiatives.  Based on these experiences, ACPE proposes nine essential elements that we believe must be part of any successful future physician payment system.

     First, the reimbursement system must be quality centered.  Any new reimbursement system must include compensation strategies providing high quality care.

     ACPE believes that there should be ongoing efforts to drive quality improvement that occurs in part through physician reimbursement reform.

     Current fee for service systems are based primarily on volumes of patients seen and number of procedures completed.  This prevents achieving higher quality health care.

     Second, health care must be safe for all.  ACPE believes physicians should be rewarded for making safety a priority.  Examples of safety improvements led by physicians can be found in many hospitals and health systems.  These initiatives, however, have largely been un‑reimbursed.

     A new payment system should take into account reductions in adverse events and reward for successes with a range of other relevant patient safety indicators and clinical measures.

     Third, a streamlined system, strive for simplicity.  We frequently hear from the ACPE members about the burden of reporting requirements for Medicare payments.

     Efforts toward common measures, common data elements, and common reporting requirements are underway and should be encouraged.

     Simplified measurements and reporting allows for transferability and scaleability of information so that local, state, and national data collection analysis can occur more rapidly.

     Four, the system must be measurement based.  As a science, health care measurement is immature.  Measures endorsed by the National Quality Forum should be refined and publicly reported.

     Measurements directly related to physicians is highly complex, but ACPE encourages ongoing development of physician focused measurement and public reporting.

     Efforts to interpret outcomes must be clinically relevant, balanced, and realistic, and must not create unfounded negative connotations.

     Five, the system must be based on evidence based medicine.  Physicians are much more likely to comply with guidelines if strong data are available.  Many professional societies are generating evidence based guidelines and there is a Federal clearinghouse of guidelines, but utilization remains low.

     While evidence based medicine is an emerging field, physicians should be rewarded for improving and following guidelines and clinical pathways that are proven to provide safe and reliable care.

     Six, value based care.  Value equals quality over cost.  Reimbursements must be focused on value based care.  The Centers for Medicare and Medicaid Services have already established pilot projects exploring value based purchasing and other public and private entities also have projects underway.

     ACPE believes any new reimbursement system should compliment these programs.

     Seven, innovation.  Instilling a culture of innovation not creative billing within physician practices should be a priority.  The payment system should encourage physicians to implement processes that save money and contribute to safer care.

     There are a variety of successful innovative programs in hospitals and health care systems at the local level.  There needs to be a mechanism to raise them up to the national level so that innovative ideas can become best practices.

     Number eight, the system should be fair and equitable.  The payment system must not create conflict between the primary care physicians and cognitive and procedural specialists.  Each member of the health care team must be fairly remunerated for their overall long term care of patients and not just focused on individual episodes of care.

     Finally, the ninth element is the system should be physician led.  Physicians are much more likely to accept a revised reimbursement plan if it is developed with physician input.

     The most progressive health care organizations tend to be physician led and physician leaders not only have a strong understanding of the health care on the clinical side but they also know how to lead and run successful enterprises.

     ACPE recommends the creation of a new independent commission composed of physicians, health care providers, experts in finance and quality, business leaders and patient representatives to study Medicare’s funding dilemma and analyze the best practices and bring them to you for consideration.

     ACPE strongly believes that our nine essential elements in the next payment system will be critical to a successful outcome.

     Thank you for inviting us here today to provide testimony.

     [The statement of Dr. Lawrence Riddles follows:]

     *Chairman Herger.  Thank you.

     Dr. Bronson, you are recognized for five minutes.


     *Dr. Bronson.  I am President of the American College of Physicians, the nation’s largest medical specialty organization representing 133,000 internists, internal medicine subspecialists, and medical students pursuing careers in internal medicine.

     I am a Board certified practicing internist, a Professor of Medicine at the Lerner College of Medicine at Case Western Reserve University, and President of the Cleveland Clinic Regional Hospitals.

     Repeal of Medicare’s sustainable growth rate is essential, but repeal by itself will not move Medicare to better ways to deliver care.  We need to transition from a fundamentally broken payment system to one that is based on value of services to patients.

     We recommend the following steps to start such a transition.  First, Congress should establish a transitional value based payment initiative where physicians who voluntarily participate in physician led programs to improve quality and value will be eligible for higher Medicare updates.

     Second, this transitional initiative specifically should provide higher updates to physicians and recognize patient centered medical homes and patient centered medical home neighborhood practices.

     The patient centered medical home, or PCMH, has several important features described in the joint principles of the patient centered medical home adopted by ACP, the American Academy of Family Physicians, the American Academy of Pediatrics, and the American Osteopathic Association.

     These features include a personal physician for each patient who is leading a team of individuals trained to provide comprehensive care that work together to ensure quality, safety, and enhanced access to care, while arranging all the patient’s health care needs and coordinating care across all elements of a complex health system.

     Many insurer’s are now offering PCMH practices to tens of millions of patients, achieving major quality improvements and cost savings.  It is time to make them more available to Medicare patients by providing higher updates to physicians, independently certified practices that are PCMH practices.

     Third, Medicare should support the contributions of subspecialists and ensure high quality coordinated care through collaborative arrangements with PCMH practices.

     This concept called the PCMH neighborhood, offers financial and non‑financial support to specialty practices that have demonstrated that they have the information systems, formal arrangements, and other practice capabilities needed to share information and coordinate treatment decisions with their primary care medical home.

     Congress should facilitate rapid expansion of this model by providing higher updates to recognize PCMH neighborhood practices.

     At least one major health care accreditation group is now in the process of establishing a PCMH neighborhood recognition program.

     Fourth, Medicare payment policies should support efforts by the medical profession to encourage high value cost conscious care.

     For example, ACP’s high value cost conscious care initiatives help physicians and patients understand the benefits, harms and costs of intervention and whether it provides good value to patients.

     Through this program, ACP has released clinical advice focused on three areas, low back pain, oral pharmacologic treatments of Type II diabetes, and colorectal cancer.

     Using a consensus based process, ACP has also identified 37 common clinical situations in which screening and diagnostic tests are used in ways that do not reflect high value care.

     To get the information to patients, ACP and Consumer Reports have agreed to a series of high value care resources to help patients understand the benefits, harms and costs of tests and treatments for common clinical issues.

     Medicare payment policies could support the professional societies’ efforts to educate and engage clinicians in high value cost conscious care by number one, reimbursing physicians appropriately for spending time with patients, to engage them in shared decision making, and number two, develop ways to recognize with higher payment updates physicians who can demonstrate they are incorporating advice from their professional societies’ programs into their practices and engaging in the shared decision making with their patients.

     Fifth, Congress should improve Medicare’s existing quality improvement programs, including the meaningful use standards, physician quality reporting system, and e‑prescribing.

     The measures, incentives and reporting requirements for these programs should be harmonized to the extent possible.

     CMS needs to do a better job in providing timely performance data to physicians participating in these programs.

     In addition, these programs should be aligned with the regular practice assessment, reporting, and quality improvement activities required by a physician specialty board’s Maintenance of Certification process.

     In conclusion, ACP believes that fundamental reform of the Medicare payment system should build upon effective, physician led efforts to improve quality.

     The PCMH and PCMH neighborhood practices exemplify this approach.

     I would be pleased to answer your questions.

     [The statement of Dr. David Bronson follows:]

     *Chairman Herger.  Thank you.

     Dr. Weinstein, you are recognized for five minutes.


     *Dr. Weinstein.  Chairman Herger, Ranking Member Stark, and distinguished members of the Subcommittee, thank you for soliciting input from the physician community as you craft the Medicare physician payment reform proposal.

     Reforming the broken Medicare physician reimbursement system and giving gastroenterologists the tools to help them to provide high quality patient care are top priorities of the American Gastroenterological Association.

     My name is Dr. Michael Weinstein.  I am here today as representative of the 16,000 physicians and scientists who are members of AGA, the largest organization representing gastroenterologists.

     AGA helped found the Alliance of Specialty Medicine, which shares our goals of delivering high quality patient care.

     My medical training is as a gastroenterologist.  I am the Vice President of Capital Digestive Care, a 56 physician practice here in the D.C. area.  I have also received on‑the‑job training as a businessman and it seems in recent years as a health policy analyst.

     In my brief remarks, I will focus on AGA programs and partnerships that could be instructive as Government considers how to reform the Medicare physician reimbursement system.

     I must first note that any quality based reimbursement system must be based on clinical guidelines and patient outcome measures that are developed with physician input and based on scientific evidence.

     I refer you to AGA’s written testimony for more on our approach.

     In 2010, AGA created the Digestive Health Outcomes Registry.  I currently chair its Management Board.  The AGA Registry helps users optimize quality of care by giving them a secure and scientifically valid way to collect, analyze and report clinically relevant data related to inflammatory bowel disease and colorectal cancer prevention.

     Payers have shown an interest in using the AGA Registry and our newly launched Digestive Health Recognition Program to acknowledge and possibly financially reward high quality providers.

     We recently launched a program with United Healthcare and expect other payers to follow suit.

     AGA advocates that a reformed Medicare reimbursement system provide incentives for physicians who report on quality measures through outcomes based registries.

     As the health system changes, we see that quality and efficiency go hand in hand.  Patients and physicians need to be wise stewards of health care dollars and ensure that care is given to the right patient at the right time.

     To that end, AGA is part of the Choosing Wisely campaign, and has identified five common G.I. tests, medications and procedures whose necessity should be questioned and discussed between physician and patient.

     This program will help physicians be better stewards of finite health care resources.

     AGA recognizes that private payers are moving toward population based reimbursement.  In response, we are developing alternative payment models.

     For instance, AGA is working with a claims case logic company to develop a colonoscopy bundled fee.  AGA physicians are developing components of the bundle including screening, diagnostic and therapeutic colonoscopy, time frames, complications, and associated carve out’s.

     This will help physicians to demonstrate value and negotiate for the services they provide to a population of patients.

     AGA is also developing clinical service lines to help physicians with population management.  Our vision is to collect guidelines, measures, payment bundles, and other resources to create a “how‑to manual” for common G.I. diseases.

     Bundles will sync with electronic medical records, registries, PQRS, and other systems, providing physicians tools to show how coordinated care can be delivered, measured and improved.

     In closing, AGA applauds your efforts to move physicians to a more viable reimbursement system that rewards physicians for improving the quality of care they provide to their patients.

     AGA shares this goal and stands ready to work with you.  Thank you.

     [The statement of Dr. Michael Weinstein follows:]

     *Chairman Herger.  Thank you.

     Dr. Mandell is recognized for five minutes.


     *Dr. Mandell.  Good morning, Chairman Herger and Ranking Member Stark.  Nice seeing both of you again, and good morning to the rest of the distinguished panel.

     Thank you for the opportunity to testify on behalf of the American Association of Orthopaedic Surgeons, which represents over 18,000 actively practicing Board certified orthopaedic surgeons nationwide.

     I am Pete Mandell, Chair of the AAOS Council on Advocacy, and our organization is very much appreciative of the opportunity to offer our ideas on how Medicare physician payment reform can be carried out.

     As the Committee knows very well, finding a long term sustainable solution for the Medicare physician payment system is a huge undertaking.  We believe that a commitment to the development and adoption of best practices that provide high quality care for musculoskeletal patients while remaining cost effective is the best way to achieve that solution.

     We are already involved in several quality initiatives that can be used by Congress as a model for future payment reforms.

     These initiatives include the development of clinical practice guidelines, appropriate use criteria, a joint registry program, greater patient participation in their own health care decisions.

     We believe that current fee for service system, although appropriate for certain types of health care services, is not the most efficient system for many services and procedures.

     We also believe that policy reforms that provide incentives for the delivery of high quality health care should be coupled with payment reforms that include greater patient involvement.

     There is no one size fits all when it comes to creating new payment models for Medicare.  Each of the following types of payment systems has merit, capitation, episodes of care, tier based payment systems, and the traditional fee for service model.

     Whatever methods Congress chooses, we strongly support efforts to incorporate quality, efficiency, and payment outcomes into the Medicare physician payment system.

     Congress should provide financial incentives that reward higher quality care based on appropriately risk adjusted patient centered measures of health care outcomes.  Risk adjustment is essential to account for medical and social problems, other patient co‑morbidities, that are beyond the provider’s control.

     These would include obesity, non‑compliance with treatment recommendations, tobacco and alcohol use, to name just a few.

     Also, quality measures should be utilized to develop a new physician payment model but only if it is developed with the advice of specialty specific input and specialty specific input from all physician specialties who are impacted by the payment system.

     The payment system should reward physicians for developing medically innovative treatments that increase quality and reduce costs.

     An orthopaedic example is orthoscopic surgery, which in the past had required open procedures and several days in the hospital.  Tying payment to quality and to the savings generated by medical innovation will reduce overall Medicare costs and drive the innovation.

     Coordinated care models offer another approach for payment and delivery reform.  An example is the episode of care where a single payment covers all involved providers, but such arrangements may carry unintended consequences including denying care to higher risk patients.

     The AOS helped form the American Joint Replacement Registry for total hip and knee data collection and quality improvement.  Its goals include collecting device information and monitoring outcomes of total joint replacements throughout the U.S., creating real time survivorship curves to serve as trip wires that detect poorly performing implants and providing regular feedback to surgeons, hospitals, and implant manufacturers concerning their relative performance compared to peers.

     All of the above quality improvement activities have been developed and/or supported by the AOS, and are changing the face of orthopaedic practice nationwide.

     Patients can become more involved with seeking out appropriate high value care.  First, in the absence of true SGR reform, Congress should permit the private contracting between patients and providers.  This will help providers close the gap between inadequate Medicare payments and the ever increasing costs of providing services to seniors.

     Second, Congress should consider enabling Medicare beneficiaries to assume greater responsibility by cost sharing for the Medicare program with protections for low income beneficiaries.

     There is a broad range of options that policy makers can use and consider for enhancing benefit sharing.

     We believe the Medicare system needs to be transformed from its current emphasis on paying for services regardless of quality or cost to a system that provides meaningful and sustained incentives for high quality, innovative and cost effective care.

     Accomplishing this goal will require the cooperation of Congress, CMS, physicians, and patients.

     However, we believe that it can be accomplished and that now more than ever is the right time to concentrate our efforts in this direction.

     Thank you for allowing me to participate in the hearing today, and we look forward to working with all of you in the future.

     [The statement of Dr. Peter Mandell follows:]

     *Chairman Herger.  Thank you.

     Mr. Sharp, you are recognized.


     *Mr. Sharp.  Thank you, Chairman Herger, Ranking Member Stark, and members of the Committee.

     My name is Aric Sharp, Chief Executive Officer at Quincy Medical Group.

     The need for an SGR solution cannot be stressed enough.  Every year physicians face uncertainty, an inability to budget, and at times having to spend significant resources to address retrospective patches.

     As the Committee works on the SGR issue, we believe incentivizing high performance can and should be a part of the solution.  At a minimum this would include measuring and improving quality, improving care coordination, utilizing information technology, and demonstrating the efficient provision of services.

     These four attributes guide much of the activity at Quincy Medical Group and other multi‑specialty groups and systems throughout the country.

     In Quincy, we participate in the PQRS program and the e‑prescribing incentive program.  We actively measure patient satisfaction through a standardized CG cap survey, as well as through opinion metered Kiosk devices in our offices.

     However, we are not just measuring quality.  We are also aligning it with our revenue streams.  We work with Humana on a Medicare Advantage product that provides reimbursement for our patient centered medical home, for 12 quality metrics, and for shared savings.

     Through the Iowa Health System, Quincy participates in the Medicare shared savings program.  That program’s 32 quality measures introduce an even higher level of rigor.

     We are also nearing completion of an intensive medical home contract with Blue Cross and Blue Shield of Illinois.

     Altogether our combined efforts across all payers will link over 75 percent of our revenues to both quality and cost savings.

     Quincy’s medical multi‑specialty medical group model utilizes physician led committees and work groups so that we can leverage good care coordination into quality.

     For example, Quincy holds the highest patient centered medical home recognition from NCQA, Level 3.  We also have the largest number of patient centered medical home providers in the State of Illinois.

     We believe there is strong merit to follow the lead of commercial insurers by incentivizing this type of care coordination.

     Quincy is also on track to meet EHR meaningful use criteria for all of its physicians.  However, only half of our physicians are even able to receive the intended meaningful use incentive as well as PQRS and e‑prescribing incentives due to a technical oversight.

     H.R. 3458 would fix that issue, and it would end that type of discrimination in quality programs against rural physicians.  That bill has bipartisan support, and is strongly supported from medical and hospital associations, providers, and leaders across the country.

     Therefore, we respectfully urge swift passage of H.R. 3458.

     You see, the reason it is so critical to have all physicians in both urban and rural areas on EHRs is because it is a prerequisite to advanced solutions, like patient registries, patient portals, tele‑health solutions, and predictive analytics, through products like Explorus and Anseta.

     At Quincy, we are already using or preparing to launch initiatives in each of those advanced areas.

     Finally, we believe high performance includes demonstrating the efficient provision of services through cost reduction.  However, it is important to keep in mind there are geographic differences in measuring baseline cost efficiency across our country, and that fact cannot be overlooked within any successful SGR solution.

     In conclusion, solutions must work for all physicians and all specialties and in all parts of the country.  We believe taking an approach of shaping the path could be the most successful, and that shaping can begin with appropriate incentives centered around quality and technology for high performing multi‑specialty groups and systems.

     Thank you.

     [The statement of Mr. Aric Sharp follows:]

     *Chairman Herger.  Thank you.

     Dr. Jenrette is recognized for five minutes.


     *Dr. Jenrette.  Thank you, Chairman Herger, Ranking Member Stark, and members of the Health Subcommittee for inviting me today to testify regarding physician organizations’ efforts to promote high quality care.

     I am pleased to testify today as Chief Executive Officer of Sharp Community Medical Group and as a physician myself trained in family medicine and geriatrics.

     By the way of background, Sharp Community Medical Group is the largest IPA in San Diego County.  We have a network of more than 200 primary care physicians and over 500 specialists, and we care for more than 170,000 patients, both HMO and Medicare Advantage, as well as commercial HMO, our new commercial ACO products, and we are one of the six pioneer ACOs in the State of California.

     I also address you today as Chairman of the Board of Directors for the California Association of Physician Groups, CAPG, that represents over 150 physician multi‑specialty medical groups and independent practice associations.

     Our members serve over 15 million Californians, approximately one‑half of the state’s insured population.

     What are the most important efforts to promote high quality care for the patients we serve at Sharp Community Medical Group as well as the 150 medical groups and IPAs at CAPG?

     I must begin as many of the other speakers have with the certainly known to you, move away from payment systems that reward volume rather than value, and that is much of the fee for service system that we currently live under.

     Groups like Sharp Community Medical Group have moved to global payment methods that allow services and systems of care to be established and built so that we are accountable for a population of patients, for quality, outcome, and excellence in care.

     We have learned that taking care of patients at the right time and at the right setting and utilizing team based approaches to care, examples of which I could offer  you now and later, results in better health and prevention, improved management of chronic disease, and also ultimately lowers costs.

     Payment methodologies that incentivize physicians and other health care workers to provide the coordinated, accountable care should be forward in your thinking.

     The second effort to promote quality is the alignment of incentives at the physician level that results in the quality outcomes or value that we are seeking.

     Sharp Community Medical Group has developed programs and incentives to support and improve quality for our patients for over 20 years, and it has not always been easy.

     We are focused through efforts like the California Integrated Healthcare Association, IHA, which is a collaborative pay for performance program in California, multi‑stakeholders, including plans and medical groups, that promotes quality improvement, accountability, and affordability of health care in the state.

     Sharp Community Medical Group is also focused on the five star quality metrics of our Medicare Advantage patients, the 33 quality measurements of our pioneer ACOs, and similar metrics and goals of our commercial ACOs.

     Over the years, Sharp Community Medical Group has expanded, evolved and gained sophistication in data collection and aggregation to create useful reports and registries that assist our physicians in improvement efforts in prevention, management of chronic disease, recognizing gaps in care, and in controlling overall costs.

     In addition, our doctors have supported transparency and sharing their results with each other on physician specific report cards.  How do they compare with each other on prevention, like mammography or colon cancer screening, or how well they manage their patients with diabetes.

     This has enhanced their work together, to learn from each other, and to continue to improve their performance.

     Physicians value accurate, comparable and reliable information to help them improve.  The final effort to promote high quality care, on which I will close, is that of health information technology.

     Electronic health records, health information exchanges, HIEs, meaningful use are all steps in the right direction to collect, aggregate and share information across and among providers of care.  They are, however, only beginning to reach a level of usefulness for physicians to be better and to care for patients.

     Many physicians still see EHR as fancy paper records containing volumes of information that is hard to digest and use successfully.

     They will continue to struggle with this until such time as we can easily share information across a common platform and the electronic systems develop the intelligence or active clinical decision support that helps doctors, nurses, pharmacists and other health care providers use the information wisely.

     Again, I thank you for the opportunity to weigh in on this very important topic this morning and look forward to your further questions and dialogue.  Thank you.

     [The statement of Dr. John Jenrette follows:]

     *Chairman Herger.  Thank you, Dr. Jenrette.  I want to thank each of our panelists for your testimony.

     My first question is for the entire panel.  The efforts of each of your organizations to use the evidence as to what works to develop and disseminate quality standards that physicians can put into practice is commendable.

     Do you believe that it is appropriate to incorporate quality and efficiency into the Medicare payment system if physicians play an integral role in determining the metrics and the process?

     Dr. Riddles?

     *Dr. Riddles.  Yes, sir, I certainly do.  That is the only way that we are going to be able to incent and work towards value, that the whole system has to move that way.

     As we talked about initially, coming up with common data elements, common information, and a way to process that and tie that together, as my colleagues here have mentioned, is critical, so that it is going to be seen at not only the local and regional but national level so we can understand the patients and how best to apply the medical knowledge that we have in the way of evidence based things to help that out.  Yes, sir.

     *Dr. Bronson.  Again, yes, sir, I agree with Dr. Riddles, but would add the importance of physician leadership and the leadership of the professional organizations in helping the penetration of these ideas out to the medical community in an effective manner.

     *Chairman Herger.  Thank you.

     *Dr. Weinstein.  As well, certainly agree.  The AGA has worked closely with NQF and the other AQA in developing scientifically based, evidence based guidelines.  I think it certainly helps with physician acceptance of guidelines, and physician acceptance of measures to control costs and improve quality are far more accepted when they are developed by their colleagues and peers using a process that involves evidence based medicine.

     *Chairman Herger.  Thank you.

     *Dr. Mandell.  Mr. Chairman, the answer is definitely yes.  In addition to clinical practice guidelines, we do not have a lot of information and it is certainly very important sometimes in very expensive areas, so we are also developing appropriate use criteria for that.  They take the data that is there and then combine that with what is called an “expert opinion” to come up with the best available recommendations, and that would go a long way towards increasing value as well.

     *Chairman Herger.  Thank you.

     *Mr. Sharp.  I would simply echo the “yes” with all of these folks for the same reasons.  I think it needs to be physician led.

     *Dr. Jenrette.  It sounds like you have consensus here, as I would also support and as I have mentioned, I think physicians when they have an opportunity to weigh in on the data, on the guidelines, and have input, you will get the buy in that we are all looking for and move us in the right direction.

     *Chairman Herger.  Thank you.  Dr. Mandell, your organization supports tier payments so that physicians who provide higher quality care receive higher payments.

     Do you believe the evidence and methods exist to make determinations that condition payments on outcomes?

     *Dr. Mandell.  In certain areas, there is a lot of good evidence to that, to support that concept.  As I mentioned a minute ago, in areas where we do not have high quality evidence to provide clinical practice guidelines, the use of appropriate use criteria could be used for the tiering process, and basically as I am sure you understand, the tiering process would say for example, if you did not report to the registry, if you did not follow the appropriate use criteria for whatever reason, you get paid at a certain level.  If you do support and utilize these things, you get paid at a higher level.

     There may be reasons why individual physicians would not want to do that at first.  I would suspect that over time everybody would follow all the guidelines and go to the higher payment level.

     *Chairman Herger.  Thank you.  Dr. Weinstein, your organization generally supports incorporating quality and outcomes into the Medicare payment system.  To that end, you have developed robust quality measures.

     Should these measures differentiate among physicians based on their geographical location?

     *Dr. Weinstein.  I think at the beginning of the development of guidelines, the issues that we are tackling are relatively universal and do not really depend upon the geography.

     If you get deeper into nuances, that might change, but I think in general, the quality guidelines that are established should be applied throughout all areas, rural, urban, whatever.

     To that end, development of a registry allows small groups and large groups to participate with any web access, either entering information in manually or through electronic data interchanges.

     We do not really see any difference in the geography, particularly if the guidelines are developed with input from a wide range of physicians.

     *Chairman Herger.  Thank you.  Mr. Stark is recognized for five minutes.

     *Mr. Stark.  Thank you, Mr. Chairman.  I thank the panel for participating with us today.

     Dr. Bronson, you mentioned medical home, and I think that is an interesting concept that people are talking about.  What I am wondering, I am aware that the thoracic surgeons over the past five or ten years have collected information on virtually every thoracic surgical procedure done by the members of that organization.

     It has resulted in a best practices recommendation generated by the specialty so that if somebody has to have a heart transplant or something else, they can look up and see what all their colleagues feel are the best practices.

     Do any of you represent a specialty that does a similar collection of data?

     Dr. Mandell.  We are talking about the joint registry, and in that sense, we are collecting data for total joint replacements.

     *Mr. Stark.  We think it would be a good idea that every physician be required to keep electronic medical records.  Arguably, they will have to be reimbursed for the cost of the equipment, programming and learning.

     New medical students will not have that problem.  It will be taught to them.

     We would then probably end up hopefully with a program like VISTA, which I think is universally acclaimed as the finest existing medical record program in the country.

     It is astounding to me, and we are trying, Dr. Riddles, to see if we can straighten this out, but VISTA cannot talk to the Department of Defense.  You go figure.  If you are on active duty, you cannot get the information, but as soon as you retire, it is plugged in.

     Maybe that is just bureaucracy that does not want to do it.  It does not make any sense at least to me that these records cannot be incorporated, and further, that any of us ending up in an emergency room 1,000 miles from home, if we have our password or some way of identifying ourselves, it would seem to me it would be valuable in terms of outcome and costs for the emergency room people to punch in and get medical records as we get in VISTA.

     Is there anybody who thinks we should not have a system like that?

     *Dr. Riddles.  If I could offer just a comment, sir.  I think you are spot on, there is nothing magic with electronic things, and that would really disappoint my children, but there is not.

     The big piece is how you use it.  It is a tool.  If it is not interconnected and it is not integrated, it is not of any value to you.  That is again part of what we and I think all the members here have been saying, we have to have the registers, we have to have the common databases, so we have the ability to use it.  It is huge when you have that capability.

     *Mr. Stark.  We are the only industrialization in the world that does not have it, I might add.  I look to Canada, for instance, and let’s use pharmaceuticals.  That is pretty easy.  Aspirin is aspirin.  Tylenol is Tylenol.  You do not get into a question of professional differences.

     Would it not be helpful, it certainly would to me when I go to see my ortho whether I get a needle in the back or Tylenol, I know what I want, but it would be helpful to see what the results were without regard to cost and without cost to recommendation, but to see what happens to a group of people with problems or any other specialties that you all may represent.  I just hope we can get there.

     Dr. Weinstein?

     *Dr. Weinstein.  I will make a point.  We practice different medicine.  The way we record data, the efficiency of our medical records obviously very much depends on what specialty we are in, the amount of information we want to record.

     The important thing that would help us is the glue that allows all of our systems to talk to each other.  That is where the standards have not been set and should be part of ‑‑

     *Mr. Stark.  It is one of the areas that some of you, more than just a couple of you is out of medical school, are going to have to re‑learn.  Kids in medical school will learn it.  That will be the inconvenience.  You are going to have to figure out if there is an universal system how to enter my weight and blood pressure, what line you put it on, a pain in the sacroiliac, but a pain.

     Eventually, it would seem to me, and I think in less than ten years, we will have those records for you all to use at your convenience.

     I appreciate the interest that many of you have in that field and letting us know about anything we can do to promote that.

     Thank you, Mr. Chairman.

     *Chairman Herger.  Mr. Johnson is recognized.

     *Mr. Johnson.  Thank you, Mr. Chairman.  Drs. Riddles, Bronson, Weinstein and Mandell, although we have discussed the fact that reforming the current payment system cannot be an one size fits all endeavor, we still have to ensure that reform payment systems work in various physician’s practice arrangements and in geographic regions.

     It seems to me there are a lot of differences just among you guys, notwithstanding all over the country.

     What are your organizations doing to support small practices including those in rural areas?

     *Dr. Bronson.  The College is very active in working to support small practices.  Almost 50 percent of our members practice in small practices.  We have developed programs to help small practices become patient centered medical homes, to go through that process, and the tools and other products to help them with the HR choice and utilization.

     We have a wide variety of educational programs to help staffs get better at supporting the practices.

     *Mr. Johnson.  Have you seen any improvement?  I know a couple of doc’s in our area that do not want to use the system.  They would rather use handwritten records.

     *Dr. Bronson.  Certainly, there is a generation of physicians that will probably ‑‑ I am probably one of them ‑‑ I have been using electronic medical records for ten years.  I learned how to do it.

     As Congressman Stark mentioned, the younger generation will be using electronic medical records.  We have to prepare for the transition over that time and increasingly practices will become electronic, and the electronic systems will become more user friendly as well.

     *Dr. Weinstein.  I would add one of the main reasons that our group got together, 56 physicians, was the cost of information technology, to be able to share the cost of the start up of information technology.  That is a hindrance for a small group.

     The high tech stimulus money may be fine for a group of 56, but it does not work for a group of two or three.  The cost certainly of implementing IT far surpassed the stimulus dollars for small groups.

     *Mr. Johnson.  I have seen it not work in hospital systems either.  Right in our area, Methodist and Baylor do not talk to each other.  Their machines do not talk to each other.  They have different systems.

     *Dr. Weinstein.  That is the standards I was talking about, the standards that allow different systems to talk.  Where there are no standards, then systems are not required to ‑‑

     *Mr. Johnson.  Are you saying the United States Government ought to demand that they all have the same standards?

     *Dr. Weinstein.  That the communication standards between information systems should be defined by the United States Government so any provider of IT services, be it a hospital, office or whatever, have to be required to have the standard to talk to each other.  If they cannot talk to each other, they should not receive certification.

     *Mr. Johnson.  You like Government control of your practice?

     *Dr. Weinstein. I did not say Government control.  I said ‑‑

     *Mr. Johnson.  That is what it is if we advance something like that.

     *Dr. Weinstein.  I do not want to argue.  We all submit claims the same way.  The way we submit claims to Medicare has been defined by CMS.  The only way we can all submit claims to one entity is if somebody defines the way the data is transmitted.

     *Mr. Johnson.  Dr. Mandell?

     *Dr. Mandell.  I just wanted to point out that the market so far has sort of decided what the basic electronic medical record was going to look like, and because there are not too many orthopaedic surgeons, I mentioned 18,000, a little more than that, to practice, the systems out there now are not very friendly to what we do.

     We do not take blood pressures very often.  We do not check for blood glucose and things like that, which are some of the things that may be required.

     Standards would be a nice idea but hopefully when they are developed, they should be developed, they will take into account the input of all the specialty societies as well, and to that end, we have our own committee at the American Academy of Orthopaedic Surgeons that has been working with the regulators to try to get them to understand all this.

     *Mr. Johnson.  You guys are making a lot of progress.  You still going to use Titanium in knees and hips?

     *Dr. Mandell.  When it is appropriate, yes, sir.

     *Mr. Johnson.  I have a couple.  Thank you.  Dr. Weinstein and Dr. Mandell, it is encouraging that both your groups recognize the need to address all types of practices in developing your clinical registries.

     Given the value of such data and quality improvement and performance, how can we incentivize more physicians to participate in these efforts?

     *Dr. Weinstein.  I think as we talk about reforming the payment system, basing payment on larger and larger amounts of the payment on participating in quality measures and achieving levels of value and quality, we will get more and more people to participate.

     *Dr. Mandell.  I mentioned earlier the tier payment model, which is one of the possibilities here, requiring folks to do that, to report to registries in order to get the higher levels would be appropriate.

     I think as time goes on, as some of these websites that rate doctors in the Internet now become more popular, patients will ask their doctors, are you reporting your results to the registry, can I see those results, all that sort of thing.  It is just going to be what the market wants.

     *Mr. Johnson.  Thank you, sir.  Thank you, Mr. Chairman.

     *Chairman Herger.  Mr. Pascrell is recognized.

     *Mr. Pascrell.  Thank you, Mr. Chairman.  We talk about rewarding physicians who deliver high quality care.  The health care reform bill is already actually testing new payment and delivery systems.  I think each of you are aware of that.

     I have said many times health care reform is entitlement reform, and it will help us to transform the health care system.

     Today we are here to specifically focus on physician led quality initiatives.

     My first question is to you, Dr. Mandell.  Many of you may know that in the last Congress we introduced legislation to create a national knee and hip registry.  The intention of the legislation was not only to focus on improving patient outcomes, but to address issues within the industry itself.

     In 2007, five of the nation’s biggest makers of artificial hips and knees agreed to pay $311 million in penalties to settle Federal accusations that they used so‑called “consulting agreements,” better known as “bribery,” and other tactics to get surgeons to use their products, regardless of their effectiveness.

     It was part of a deferred agreement with the U.S. Attorneys, not unlike the deferred prosecution agreements with the Wall Street folks, Enron, and all those people, AIG.  Nobody ever brought to trial.  No charges ever made.  The cost of doing business, the penalty they paid.  That is it.

     Let me be clear.  These five companies make a majority of the artificial hips and limbs here in America.  Obviously, when a majority industry is accused of wrong doing, we need to hold that industry accountable.

     Right, Mr. Chairman?

     Dr. Mandell, I understand that the American Academy of Orthopaedic Surgeons is currently launching a joint replacement registry to promote patient safety and hold the industry accountable.

     Originally, the goal of your organization was to recruit 90 percent of all the hospitals conducting knee and hip implant procedures to participate in the registry by the end of 2015, if I am not mistaken.

     Dr. Mandell, can you speak to the development of the registry, tell me if it is on track to meet its current registration goals, and then can you expand on the importance of registries for our health outcomes that most of you talked about today?

     *Dr. Mandell.  Let me take the second part first.  It is very important for health care outcomes to have registries.  The rest of the industrialized world has such registries.  They have proven very useful in finding products that were not working as well as originally designed or hoped.

     We have been a little bit slow in this country to get on that band wagon.  It took us something like ten years to get to the point where we are now with the American Joint Replacement Registry.

     We have gotten the infrastructure in place.  We have gotten some hospitals signed up.  I am not on the Board of the AJR, so I do not know exactly what their projections were as to when they would get to 90 percent of the hospitals.  I am sure eventually they would like to get 100 percent of the hospitals.

     We are working towards that.  We have not detected any problems, if that is one of the questions you are asking so far with the products that have been registered.

     We had some difficulty getting some hospitals to put some of the data in, things as simple as laterality.  You might ask why it matters whether it is a left total hip replacement or right total hip replacement that is done.

     And the answer is, when you look at the data, that a second surgery has been done.   If it is done on the same hip that the first surgery was on, that is a completely different issue than if it was done on the opposite hip, obviously.  Folks often have bilateral hip replacements.

     So little things like that that you think would be fairly easy to enter in the data bank are proving somewhat difficult.  We also had a problem with getting folks to agree on bar coding of various devices so that it could be scanned into the electronic records.

     For reasons that I do not understand, the folks here in D.C. who were supposed to come up with those guidelines for using the bar codes had a lot of trouble doing it.  I think they just recently came out with at least some proposals along those lines, so that is going to help out a lot as well.

     So we are working hard.  We may be a little bit behind in achieving our goals.  But we believe we can get there.

     *Mr. Pascrell.  Thank you, Mr. Chairman.

     *Chairman Herger.  Thank you.

     Mr. Reichert is recognized.

     *Mr. Reichert.  Thank you, Mr. Chairman.

     I have heard a lot of phrases and words used ‑‑ physician‑led, patient‑centered, quality care, streamlined, values‑based, performance‑based, performance measures.  All of these things, I think, everyone on the committee agrees with, and everyone on the panel.  This should be easy.  It is certainly not.

     I have only been on this Committee four years, and we have been talking about this, and I know you have been involved and engaged in this in your entire career, most likely.  These are things that the patients out there ‑‑ all of us at some time or another are a patient ‑‑ understand, grab onto, all agree with, and want to hear the discussion on.  But the devil is in the details, as they always say.

     So from the world I come from, trying to evaluate ‑‑ I was a police officer for 33 years; trying to evaluate cops is like trying to evaluate doctors and teachers ‑‑ when you are dealing with people, it is not widgets and medical devices and those sorts of things.  I hear you saying that.  Hard to put performance measures on cops.  But some of the things that we would look at is kids going back to school.  Are they staying in school?  Are the streets clean?  Graffiti?  You know, those sorts of things.

     And Dr. Weinstein, in your testimony you mentioned that physicians are more comfortable being measured on things they know are important to their patients.  And you mentioned that your organization is developing a quality measure set that currently includes 24 measures.

     Would it be beneficial for Medicare and other payors, if they use this uniform set of measures established by the professionals providing the care, would they include some of those hard‑to‑grab‑onto sort of things that I described in other worlds when you are trying to evaluate people working with people?

     *Dr. Weinstein.  The AGA’s measures that we have worked on, the guidelines that we have worked on, have tended to be in those areas where there are large amounts of scientific data and agreement about what is best practices.  Obviously, we cannot tackle everything.  But if you look at where most of the dollars are spent, we can define in colorectal cancer care within inflammatory bowel disease those high‑dollar, high‑volume areas where there is a sufficient amount of scientific data and agreement amongst everybody as to what would be best practices and what would be a good outcome.

     I can get you other information about the other measures we are developing.

     *Mr. Reichert.  So is your answer yes?  Would it be beneficial to Medicare?

     *Dr. Weinstein.  I think it would be very beneficial to Medicare, yes.

     *Mr. Reichert.  Thank you.  Well, there are some terms that I have heard for the first time in this testimony, and one of them particularly caught my attention, by Dr. Mandell.  It is a phrased you used, “appropriately risk‑adjusted.”  What does that really mean, appropriately risk‑adjusted?  I think that if you use your imagination a little bit, that can be sort of a scary thought in some minds of some patients.

     *Dr. Mandell.  Well, patients come in all sizes and shapes and statuses of health.  And the treatment is different for each of these groups.  We talk about clinical practice guidelines based on high‑quality evidence.  To get the high‑quality evidence, you have to control for everything except a particular variable that you are looking at.

     So let’s say if you are studying hip replacements and comparing two different types, you want to know whether everybody is a smoker or is not a smoker; otherwise, that could be a variable.  You want to know whether or not everybody has diabetes or does not have diabetes; that could be another variable.

     *Mr. Reichert.  I think one of the things that sort of, maybe, is the kind of scary thought here is the older you get, how does that play into adjusting risk?

     *Dr. Mandell.  Well, if you are on the mean, this big bell‑shaped curve that most biological systems, including human beings, usually fit on, we take that into account when we develop our processes in the first place.  If you are out at the tail ends of the bell‑shaped curve, at the margin, so to speak, that is where we get into trouble in terms of trying to cost out, let’s say, and resource out how we can treat those folks.

     If you are old and you have heart disease and you have cancer, it is a different surgical procedure than if you are just old, things of that sort.  So trying to risk‑adjust for all of this is an important thing to do if you are going to give a certain amount of money for a certain procedure.

     *Dr. Weinstein.  I will make a point that the danger in not risk‑adjusting is the feeling that if you pay the same amount for every patient, there will be cherry‑picking.  Why would a physician want to take care of a patient who is more sick when he can get paid the same amount for taking care of a patient who is less sick?  So the need for some sort of risk adjustment has to be down to the individual basis.

     *Mr. Reichert.  Thank you, Mr. Chairman.

     *Chairman Herger.  Thank you.

     Mr. Gerlach is recognized.

     *Mr. Gerlach.  Thank you, Mr. Chairman.

     Dr. Riddles, in your written testimony, page 8, under the category of innovative approaches to dealing with these issues, you state that the payment system should take innovative practice strategies into account and encourage physicians and health care organizations to implement new processes and procedures that create cost savings while simultaneously improving quality and keeping patients safe.

     One of the things that the Government Accounting Office, GAO, put forward about a year ago was that in the Medicare program, which is about, what, $540 billion a year in expenditure, in that year of 2010 there were $48 billion of improper patients in the system.

     Could be erroneous and mistaken payments.  Could be phantom billing.  Could be identity theft of UPIN numbers for physicians and Social Security numbers of patients.  Could be fraudulent durable medical equipment billing, et cetera, et cetera.  But 48 billion, almost 50 billion a year, in improper payments times 10 is 500, half a trillion dollars, over a 10‑year period, money that could obviously be used for much better purposes, including dealing with physician reimbursements.

     So my question to you, as representatives of different physicians’ groups, have you thought about other approaches from a technological standpoint to deal effectively with phantom billing, identity theft of physicians and patients?  And in particular, have you thought about utilizing what in the Department of Defense they are using, a common access card, a smart card, that from a technological standpoint better identifies the provider and the user or the purchaser of a certain kind of service to cut down on these kinds of fraudulent or improper patients within the system?

     Are you, individually or collectively, looking specifically at technologies that can help do that so that, in turn, the savings generated from that can certainly be utilized to make sure physicians get the kind of reimbursements they deserve to care for our Medicare seniors?

     So I will start with Dr. Riddles, but would then like to have any of the other gentlemen provide input as well on that question.

     *Dr. Riddles.  Sir, the simple answer is yes.  And that all lies in innovation.  We have to come up with things that we do not do today that are possible and apply those to the system because, as you quite rightly point out, there is a lot of opportunity to save cost and expense here.

     So those type of things is what we are talking about, to support innovation, doing things differently, not just doing a little more or a little less of what we are doing now.  We have to considerably change it, whether it be smart cards or it could be something DNA‑based identification.

     I think we have talked a little bit here about the need for information management systems that not only exist in individual little islands, if you will, but are tied together so that you see that if somebody billed for a certain procedure, that that patient was in fact seen at that location and those diagnoses matched ‑‑ so that yes, sir, the answer is yes.

     *Mr. Gerlach.  Okay.  Great.  Any other gentlemen on that question?  Nobody?

     *Dr. Bronson.  I would answer.  We are very supportive of using innovation to make sure that payments are appropriate and payments are fair and payments are actually honest.  And we have no disagreement with that.  We do not have a robust program to get there, but we would be supportive of looking at that.

     *Mr. Gerlach.  Okay.  Thank you.


     *Dr. Mandell.  Yes.  I do not think we have thought about this very much.  It sounds like a very interesting idea.  I think if we did consider this concept, it was probably in the context of electronic medical records, with the thought that having everything in the system, so to speak, would make it easier to tell who was doing what.

     *Mr. Gerlach.  Well, right now, as you know, we have a pay‑and‑chase kind of system.  A payment is made, a reimbursement is made, and then go back and chase after that payment if CMS decides that somehow it was improperly issued.

     Whereas you can, through a smart card or common access card system, prevent that kind of thing very significantly by verifying the appropriateness of that physician providing the care up front through a biometric component to a card as well as the proper identification of the senior through that access card, particularly where the senior does not have his or her Social Security number on the card, which is then subject to identity theft, which then complicates and creates all sorts of problems, too.

     So it is technology being used in many other places around the world, including even here in the United States with the Department of Defense.  And yet we cannot seem to take what is out there from a technological standpoint and employ it in a very realistic way to cut down on very significant loss of expenditures in the program.

     Anybody else on the point?

     [No response.]

     *Mr. Gerlach.  If not, thank you very much, Mr. Chairman.

     *Chairman Herger.  Thank you.

     Mr. Kind is recognized for five minutes.

     *Mr. Kind.  Thank you, Mr. Chairman.  And I want to thank our panelists for your testimony here today.  I really think this is the Holy Grail of what we need to be focused on when it comes to health care reform and how successful we ultimately are in reforming the system that has been in desperate need.  So we appreciate your insight and help with this matter.  I think it is going to require a true partnership to make this work well.

     I, along with Senators Klobuchar and Cantwell, got included under the Affordable Care Act the value‑based payment modifier that many of you may be aware of.  It is going to start being implemented in 2015 for physician payments, fully implemented in 2017.  CMS came out with a proposed rule in early July of this year.

     So any ideas or thoughts or concerns that you might have or your membership might have in regards to that value payment modifier, my office will certainly be interested in hearing back from you.  We do not have to get into it in any detail today.  But it is out there, and it is happening, and it is going to have an effect as far as driving to a more value‑based reimbursement system.

     Obviously, the Institute of Medicine, the National Academy, again under the Affordable Care Act, has been tasked to change the fee‑for‑service system in Medicare to a fee‑for‑value payment system.  This is meant to build upon the seminal work that they did, especially in 2004 and 2005, on how best to do that.

     But they are being asked this time to produce an actionable plan of what that would look like.  So I would certainly encourage your groups, too, to be in touch with the Institute of Medicine panel.  It is a very distinguished panel that has been comprised to do this, to give them some feedback.  And I know some of you have already.

     But I think there are three great revolutions happening in health care reform that need to be sustained and that momentum carried forward.  One is the build‑out of the HIT system that many of you have talked about to increase the efficiency of care, reduce medical errors, and, most importantly, start collecting the data that our doctors and patients need to make good decisions with.

     Secondly, the transformation on how health care is delivered, so it is more integrated, coordinated, patient‑centered.  I have got models of care in my back yard in Wisconsin that are showing the way, from the Mayo system to Gundersen to Marshfield to Aurora to Theta Care.  I mean, you go right through the list throughout the Upper Midwest, and they have shown very good models that do work.

     And then finally is the payment reform so we are rewarding good value, quality care.  And what I want to ask you today, and anyone can take this up, and I want you to think about it for a second, is we are asking your members to do more, get better results, but for a lower cost.  Can we do that without jeopardizing the compensation system that physicians are receiving today?  That is going to be my question.

     But I also want to share a story with you because I spoke to a CEO of one of my major health care providers back home who invested in the Epic system, software system, a couple of years ago, the HIT system.  And when he did, he was warned at the time by Judy Faulkner, the owner of Epic, that what will probably happen is you are going to end up ordering less tests, doing less imaging, less scanning, as a result of implementing this system.

     Two years later, I asked him what he found out.  And he said, she was exactly right.  We are doing less.  We are not ordering as many scans.  We are not ordering as much imaging as we did in the past.  But that is affecting our bottom line because the incentives are not created to reward those types of decision‑making to get better results; in fact, you are penalized by doing less.

     And I asked him, well, what are you going to do as a consequence?  He says, we are going to continue to do the right thing.  I mean, if the data does not show that we should be doing certain things or ordering certain scans or imaging, we are not going to do it, even though it is affecting the line.

     And I guess that is what you guys are all testifying about today is can we ask you to produce better results, good quality outcomes, and save money in the process, but without it jeopardizing the compensation system and therefore the incentives that exist in the system today?

     *Dr. Jenrette.  I really appreciate your comments about both the HIT and the care coordination because I think that really is the key effort or direction in order to preserve, as you say, the compensation but do the right thing at the right time.

     And so there are going to be winners and losers as we control costs.  But many of the costly elements ‑‑ and hospitals are one of those areas of high cost; some of the use of technology, and you have already mentioned now we are using them more appropriately in the right setting for the right patient, are really the direction we need to go.

     The coordination of care, as you are referring to the ability to keep patients from being admitted in the first place or readmitted to the hospital ‑‑ in our organizations in California, our bed‑day performance is half of what it is in the hospital as compared to the rest of the country because of the efforts that are being made to manage the patients at home, to coordinate services with case management, pharmaceutical, medication reconciliation at discharge, those things that create the readmission and the cost of care.

     Our physicians being under a global payment system actually see better reimbursement than they do on their fee‑for‑service because they are able to use that money correctly and wisely to create the programs that are really necessary to really make a difference to the patients’ lives and the amount of dollars that we spend.  So yes, I believe it can be done.

     *Mr. Kind.  Mr. Chairman, I see we have run out of time.  So if anyone else wants to, they can do it outside of this hearing, I guess.  Thank you.

     *Chairman Herger.  Anyone else that would like to respond by letter, we would appreciate it.  The gentleman’s time is expired.

     Dr. Price is recognized for five minutes.

     *Mr. Price.  Thank you, Mr. Chairman.  And I want to thank you for holding this hearing on this remarkably important issue that, when you get right down to it, is all about patients.  And sometimes we lose sight of that.  This is about individual patients and the care that they receive.

     For at least five of the six of you, I understand that we make your job more difficult here in Washington in caring for patients.  And for that, I think we all ought to take note and try to figure out a system that allows patients and families and physicians to be making medical decisions and not well‑intentioned, wonderful people here in this town who cannot know the individual aspects of one patient’s care.  It is impossible.

     That is what risk adjustment is all about.  We try to figure out how one patient is different than another, even with the same diagnosis.  For example, Dr. Mandell, a 65‑year‑old woman who is out playing tennis falls and breaks her hip is different, is she not, in terms of the treatment that she requires from an individual in your specialty than the 85‑year‑old gentleman who is bedridden who rolls over and breaks his hip.  Yet the code is exactly the same, is it not?

     *Dr. Mandell.  That is correct.

     *Mr. Price.  And so how do we get to the recognition under a payment system that recognizes those two different patients with exactly the same diagnosis?

     *Dr. Mandell.  Well, there are a number of different options, as you know, Congressman Price.  My thought, off the top of my head here, would be to have some additional codes to document the fact that the 85‑year‑old had advanced osteoporosis and perhaps other diagnoses which qualified for additional resources in order to treat all the other conditions that would be concomitant to treating his or her hip fracture.

     *Mr. Price.  Would you not agree that the quality that we talk about for those two individuals, the quality result, are two different things, are they not?

     *Dr. Mandell.  Yes.  You are not going to get the 85‑year‑old to perform like a 65‑year‑old any more, especially after a fractured hip.  That is true.

     *Mr. Price.  And so the quality definition that we seek ‑‑ people have tossed around this value equals quality over cost equation all the time ‑‑ the quality that we seek is defined by a patient.  Right?

     *Dr. Mandell.  Yes.

     *Mr. Price.  So if it is defined by the patient, then who ought to be in charge of the system that we are talking about?

     *Dr. Mandell.  Well, doctors should be in charge, in our opinion.

     *Mr. Price.  How about patients?

     *Dr. Mandell.  In conjunction with patients.  Patients do not always have all the information available, and doctors are the best folks to give them that information to make appropriate decisions for their particular case.

     *Mr. Price.  As a patient advocate.  Which leads me to the other words that have been put forward here by physician‑led physician input, physician advice.  If physicians, as the patient advocates, have input advice led but do not have the veto authority over what is right for that given patient, is that a system that we desire?

     *Dr. Mandell.  It is not a perfect system by any stretch of the imagination.  The question really is, can we afford to have each individual person get maximum treatment all the time?  If Ford wanted to build an automobile that never broke down for 20 years, they could probably do that, but it would probably cost about half a million dollars to do that.

     They can build 99.9 percent of cars for what they sell them for.  But to get to that last little bit, as you know, it is very, very expensive.  So that is a decision that Congress needs to make as to whether or not we can afford to do it for every individual person.

     *Mr. Price.  I would suggest it is a decision the patients need to make.

     But Dr. Riddles, you had a comment?

     *Dr. Riddles.  Yes, sir.  I think we have talked a lot about evidence‑based and how we come to those, and that is very, very important.  But also, it is a resource base, too, which is a little bit different discussion.

     And that is why we talked about building, if you will, a new, if you will, group that has in it not only the health care providers, but then leaders in other fields ‑‑ the payors, political ‑‑ and also to have the patients in that.  Because when it comes down to it, when you are at an individual level, the physicians will advocate for the patient, as they should.

     But again, looking at what is right, it is a needs versus wants discussion at a certain point, and you need to have the perspective of all the stakeholders in that discussion.  And I think that may be where we might want to be going.

     *Mr. Price.  Dr. Weinstein, you talked about having guidelines for those things for which there is general agreement, from a risk‑based statement and from an outcome standpoint.  And I see my time has expired.  But I think that it is important for people to respond and recognize that there is a lot of medicine for which there is not a lot of agreement.  And those decisions then have to be based upon patients and families and doctors making decisions and not wonderful people in grand white buildings in this town.

     *Dr. Weinstein.  I think the only point I will add is that the decision should be between the patient and the physician, given the amount of information, the scientific literature.  How much a patient wants should be up to the patient.

     But I think the question here is, who is going to pay for it?  What is the basic level of care that we can afford to buy?  What can that patient afford to buy?  What can we afford for entitlement in Medicare?

     So the decision is between the doctor and the patient.  But I think we have to decide what we can afford.

     *Mr. Price.  Thank you.

     *Mr. Johnson. [Presiding] The gentleman’s time has expired.

     *Mr. Price.  Thank you, Mr. Chairman.

     *Mr. Johnson.  Dr. McDermott, you are recognized.

     *Mr. McDermott.  Thank you, Mr. Chairman.

     Taking off on that last business about who makes the decision, I would like to do a pop quiz because you are all reasonable people.  You are all smart.  You think.  You plan.  You are used to dealing with problems.  How many of you have filled out your final directives and discussed them with your family?

     [All witnesses raise their hand.]

     *Mr. McDermott.  Not bad.  Now, how much time do you spend in your practice working with patients doing their final directives?  I raise this because you know and I know everybody is going to die.  I mean, Woody Allen said it:  Nobody gets out of life alive.

     So we are all going to die.  And yet those last six months, we spend the most amount of money, and the most amount of money that is of no useful purpose, because the patient is in the last days and for reasons of medical malpractice and families’ disagreement and whatever, care goes on.

     And I would like to hear how many, or rather, you in your practice ‑‑ I have a medical home.  There is a doctor who has my directives, and I discuss with him everything.  But how many of you have talked with patients about final directives?  Is it any part of your practice at all?

     *Dr. Jenrette.  I will begin.  And my specialty area happened to be geriatrics, so I actually spent a significant amount of time talking about end‑of‑life services for the family and for the patient.  And I would agree it is a role as patient advocate and trying to give them the best information that you can so that they and the family understand what the quality of life will be, depending upon the treatment that we offer.  So I have had years of experience in doing that.

     Within our organizations, we actually have metrics that we measure, and we actually have a goal of what patients have their final directives completed and are they on all charts.  And we look at those, and we audit for those, because we think it is such an important piece of how we treat patients and in their care for the future.

     So I believe you are right on target, and I think it is one of the most important things we could do.  In fact, if we were able to focus there and really not take into account and not deliver the unnecessary services, as you talk about, at the end of life, I am not sure we would need to have so many of the conversations about which hip we might use here or what procedure we might do there because most of the dollars are going in end‑of‑life care when it is unnecessary.

     *Mr. McDermott.  One of the problems that we ran into in the Affordable Care Act, we put some money in so that doctors could be reimbursed to discuss end‑of‑life questions with patients and would be paid for it.  And it became a lightning rod for an awful lot of misinformation, I think would be the nicest way to put it.

     Do you force your patients to sit down and write their final directives?

     *Dr. Jenrette.  It is not a forced issue.  It is ‑‑

     *Mr. McDermott.  No.  It is not a forced issue.

     *Dr. Jenrette.  Not forced.

     *Mr. McDermott.  It is not forced by the government?

     *Dr. Jenrette.  No.

     *Mr. McDermott.  So how do you bring it up with patients in a way that makes some sense?

     *Dr. Jenrette.  Well, it is part of, medically, what you are doing as you are going through history, as you are looking at outcomes and what kinds of either prevention or chronic care or what are we managing here together.  It is a conversation that becomes part of the regular dialogue and can be with any patient.  It does not matter what age group it is.

     I mean, to have that conversation, if something catastrophic happened, if you found yourself in this situation, we need to have a discussion about what your wishes would be.

     *Mr. McDermott.  One of the things we did here in this Committee, and it frustrated me then and it still frustrates me, Sandy Levin and I put an amendment into a bill in 1990, I believe it was, that would require Medicare to give final directive information to patients when they gave them their beginning of Medicare.  And then we went back a year later to find out how many had filled out those final directives.

     Now, this is a country where we do not like to talk about death.  We will do anything to talk about something else besides death.  And so it is not surprising that only 40 percent of the people in this country have wills; that is, they have decided how their whatever their wealth is is going to be distributed when they die.

     When we looked in further, we found that only 20 percent of the people who we had given these forms to had filled them out.  And I am puzzled about how we, as a country, come to grips with this whole issue because my mother lived to 97 and my father lived to 93, and my brothers and sister and I have been through the process on the patient’s side of the bed, try to figure out what we should do.

     And my experience with it was, my father said ‑‑ when we were doing with him, he said, “Well, I do not want them paddles.  I have seen them things on TV, and I do not want that, that jumping on the bed.”  So I went to the doctor who was his physician, and he said, “Well, you know, it is really a lot less traumatic to have that than it is to have some big old intern pressing on your ribs and breaking all your ribs.”  So my father said, “Well, okay.  If that is what you suggest, that is what we will do.”

     But those are not easy discussions to have.  And I really think that that is one of the things that we, as a profession ‑‑ I am a physician.  So we as a profession are going to have to come to grips with how we deal with this among our patients.  Because a lot of the waste that we are talking about, the costs are going to come down.  How we do that is going to have to be as humane as possible and with the patient as the center of it, in my view.

     Thank you, Mr. Chairman.

     *Mr. Johnson.  Thank you.  The gentleman’s time has expired.

     Mr. Buchanan, you are recognized.

     *Mr. Buchanan.  Yes.  Thank you, Mr. Chairman.  And I also want to thank the committee for being here.  I am excited we are talking about quality care.  I am from Sarasota, Florida.  In that region, we got rated as the best community, middle‑sized community, in the country for quality of living.

     But at the top of the list, best place to live and work, top of the list was quality health care.  So it is obviously critical, what you guys do every day, and it makes a big difference.  So I appreciate you being here.

     Let me mention, as someone new on the panel, I have been in business for 30‑some years ‑‑ I am all about everybody wants to be more efficient.  But when we talk about quality and efficiency, looking at that fine line, as I think about it, meeting with a lot of doctor groups and a lot of doctors generally in our area, one cardiologist told me, he said, “The last 20 years I am working twice as hard and get reimbursed half.”

     I get a sense with a lot of doctors that I hear this, where maybe they used to see 6 or 10 patients in an hour; now they are seeing 12 to 15.  They have got more staff.  So where is that fine line?

     When you talk about quality health care that everybody wants ‑‑ I do not think it is just about electronic health records; I think that helps us be more efficient ‑‑ that fine line between that and efficiency, where does that come in?  Because I hear from patients as well, where they are concerned, where the doctor is under pressure, they feel, has to get in and out and he has got 10 patients waiting.

     So I would just ask the panel, do you want to comment on that?  Where is the fine line between doctors working harder, making less, in a sense ‑‑ and I am not sticking up for doctors, but at the end of the day that is the key to health care, in my mind ‑‑ where is that fine line between providing the quality we all talked about today and the efficiency ‑‑ and usually it is with that doctor’s time ‑‑ in terms of patients?  Let’s start at the end here with Dr. Riddles.

     *Dr. Riddles.  Yes, sir.  I agree completely.  The issue is, the fine line is not where we sit down.  And this is why we are talking about value‑based and evidence‑based, to learn where that fine line is and then make sure that we line our reimbursement system up with that.

     I think part of the reason that physicians are seeing more, moving faster, and so forth is again symptomatic of ‑‑ we are reimbursed for, again, for the most part, is numbers seen, procedures done, those type of things.  And that is not necessarily where the best outcomes lie.

     So getting back to what we have done before is we need a system where we can see that, learn where it is, where the evidence exists, do that, and if not, then coming up with appropriate use criteria as we do learn more, sir.  So that would be my sense.

     *Mr. Buchanan.  Dr. Bronson?

     *Dr. Bronson.  I could not agree more with you.  The current system of paying just for individual service at a time, and then with cut payments, leads to almost a mill mentality of pushing people through.  That does not serve the patient well, it does not satisfy the doctor in their practice, and that is not the system we should have.

     The system we should have is to support comprehensive care in a way that provides that value.  And that is what we are talking about with the patient‑centered medical home concept.  The concept really leads to better care coordination, a more comprehensive look at problems, and more prevention so that you are dealing with those issues early on instead of late.  There are lots of opportunities to get better.

     *Mr. Buchanan.  Dr. Weinstein?  And again, I want to get back to this idea.  Do you sense that in practices where the doctor, when we talk about efficiency, maybe they used to, on average, spend 8 minutes and now they are down to 3, is that where a lot of this efficiency is going?

     *Dr. Weinstein.  Let me try and answer.

     *Mr. Buchanan.  That is what I hear.

     *Dr. Weinstein.  Yes.  And I think we can define quality.  You know, we all want high quality, be that patient satisfaction, lower drug costs, less hospitalizations.  And I think we can measure those things and we can report on those things.

     As businessmen, our job is to try and deliver that same level of quality with the right provider in the right location at the lowest cost.  That means right‑sizing our offices, maybe using physician extenders for certain services that do not necessarily require the highest trained person in your business.

     But yet we have to maintain the quality, the patient satisfaction, the lower drug costs.  And so if we can define what we want to measure and maintain that quality and then provide it through a business model that allows us to right‑size the provider to the patient’s need, then we can succeed.

     I think one of the things that frustrates us in business is the unknown about where the revenue is coming from, and that is the broken Medicare system.  As we go from 6 months to 9 months to 12 months not knowing what the revenue is going to be, if you are in business, I do not think you have that uncertainty.

     *Mr. Buchanan.  I cannot imagine what you have got to deal with, the SGR and everything.

     Dr. Mandell, I want to give everybody an opportunity just to comment.

     *Dr. Mandell.  Yes.  What you talked about, obviously, is a symptom of fee‑for‑service medicine.  And I can only talk about orthopedic surgery.  Mr. Kind was talking earlier about the fact that if we do have appropriate use criteria and clinical practice guidelines, there will be less business, so to speak, down the line.

     We kind of look at it as the appropriate amount of business.  And at least with regard to musculoskeletal problems, there is a tidal wave of Baby Boomers coming online with Medicare right now.  So I think as we focus on doing things that really work and avoid doing things that do not work very well, at least for orthopedic surgeons, there will be the right amount of folks and the right amount of procedures done, so it will not be a real issue for us.

     *Mr. Johnson.  Mr. Sharp?

     *Mr. Sharp.  Yes.  I think you have hit an important point.  We believe, as you look to try to find efficient ways to run practice, there is a lot to be said for and a lot of opportunity within the multi‑specialty group model.

     You have got interdisciplinary teams of physicians, a lot of different specialties meshed up with primary care.  And there are inherent efficiencies in the business side of the practice that can afford the physician, perhaps, more time to do more good with the patient.

     And so I think also, and Dr. Bronson hit on this in his oral statement, a lot about the patient‑centered medical home.  And that is a team‑based approach using extenders and using nurse care coordinators that are managing the population health with a team‑based approach, where the physician does not have to be the one doing everything.  And those are things that we think can be a part of the solution.

     *Mr. Buchanan.  Doctor?

     *Dr. Jenrette.  I think a lot has been said about, again, the patient‑centered medical home.  But really, it is about the team‑based approach, people working at what we call the top of their license.  So the physician, rather than seeing 12, 15, 20 patients and increasing what they are doing each day, it is using other extenders within the offices.  It is becoming creative, new delivery models.  It is about group appointments.  It is around social networking for care.  It is around using case manager support.  It is around using pharmacists to help them with their medications.  So it is not all on the physician’s desk.  And so we needed teams, a multidisciplinary approach to a different delivery system.

     *Mr. Buchanan.  Am I out of time?

     *Mr. Johnson.  You are out of time.

     *Mr. Buchanan.  Thank you.  I want to thank the witnesses and thank the chairman.  Thank you.

     *Mr. Johnson.  Yes, sir.

     I want to thank our witnesses for their testimony today.  Your organizations are doing promising work to improve the quality of patient care, and this work is of great interest as we seek to reform Medicare physician payments.  The fact that physician organizations have developed so many innovative clinical improvement activities gives me increasing hope that Medicare can build on these efforts and we can find the long‑term solution that has been so elusive.

     I appreciate the physician leadership exemplified by our witnesses because this reform effort cannot succeed without active participation by the physician community.  Together we must find a better way, and we are constantly reminded the current rate of growth in Medicare spending is unsustainable.

     While I, along with many of my colleagues on the Republican side, believe we ultimately need to bring greater competition and market forces into the Medicare program in order to reduce costs, we will also continue to move forward on finding the best way to eliminate the SGR and replace it with responsible reform that provides certainty for physicians and encourages optimal patient care and outcomes.

     As a reminder, any member who wishes to submit a question for the record will have 14 days to do so.  If any questions are submitted, I ask that the witnesses respond in a timely manner.

     And with that, this Committee stands adjourned.  Thank you all for being here.

     [Whereupon, at 11:41 a.m., the committee was adjourned.]

Submissions For The Record

Association of American Physicians and Surgeons
Gundersen Lutheran Health System 
The American College of Gastroenterology
The Center for Fiscal Equity