How to save $1 trillion in health costs while strengthening primary care

March 19, 2013

Most physicians agree that Medicare's sustainable growth rate (SGR) - the formula the program uses to determine health provider reimbursement - is broken, but what's less clear is how to fix it.

Most physicians agree that Medicare's sustainable growth rate (SGR)-the formula the program uses to determine health provider reimbursement-is broken, but what's less clear is how to fix it.

In a recent Commonwealth Fund report, three researchers lay out a plan for replacing the SGR with a "pay-for-value" approach that they also say would save $1.3 trillion in health costs nationwide over 10 years. The researchers say their proposal would strengthen primary care, in part by providing additional monthly per-patient payments to primary care providers, as well as additional payments to practices that qualify as Patient-Centered Medical Homes.

"As part of a new method of setting and updating physician payment rates, Medicare would raise payments for primary care services, which are currently undervalued relative to more specialized service," the report states. "Payments would also be used to support care teams (including nurses and other healthcare personnel) and the infrastructure needed to improve access and care, particularly for high-cost, complex patients."

The infographic below provides a brief overview of the researchers' proposal. To read the proposal, click here.

 

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