“Thanks to Chairman Herger for holding this hearing today to explore how private sector payers are rewarding physicians who deliver high quality and efficient care. This hearing continues the discussion we began last May when we held a hearing to review innovative delivery and physician payment system reform efforts.
“I agree with Chairman Herger that it is important for us to hear from the private sector and collaborate with them if we are going to improve the way we pay physicians. However, I would also note that we are only three weeks away from a 27% cut in Medicare physician payments. It seems that our Committee continues to avoid the topic of the Sustainable Growth Rate formula in favor of these easier conversations about delivery system reforms -- around which we have much stronger agreement.
“The fact of the matter is that if we don’t fix Medicare’s physician payment formula, we are going to lose the ability to effectively collaborate with the private sector because America’s physicians will abandon Medicare.
“We all share the blame here. We’re more than a decade into the debacle known as SGR reform. We’ve known this formula hasn’t worked for many years, but neither side of the aisle has been able or willing to come together to enact a permanent solution. The biggest reason for failure is the cost of change. Because of the way the formula was designed, we now have a huge price tag -- surpassing $300 billion -- to correct the formula.
“On the cost front, we have a unique opportunity that has presented itself this year. Members of Congress on both sides of the aisle and both sides of the Capitol are -- in increasing numbers -- agreeing to the idea of using the Overseas Contingency Operations as a financing mechanism to essentially pay off the SGR problem. Without objection, I’d also like to make part of the record a letter signed by most of America’s physician professional societies in support of this.
“I am encouraged by this conversation and I hope it can come to fruition this year. I’ll be curious to hear from our witnesses today. I have a hunch that at least the physicians at the table will agree that SGR reform is the number one issue facing doctors.
“If we can get that issue behind us, then, I believe we will be able to better devote our attention to implementing reforms like those that are going to be discussed at today’s hearing.
“I’d also note that it is impossible to look at purely ‘private sector’ efforts to change payment. Len Nichols, in his testimony before us today, will highlight the synergy between government initiatives to change payments to promote quality and efficiency and their private sector counterparts. Though my Republican colleagues are loath to hear this, the new health reform law is promoting public-private initiatives to incentivize high quality, efficient care. Examples like the Challenge Grants through the new Center for Medicare and Medicaid Innovation, accountable care organizations, and bundled payment initiatives are all public-private partnerships that are moving forward. Their impact goes beyond Medicare. We’re testing models we want to spread across payers.
“I’m very excited about the synergy we are seeing between the private sector and government in health care delivery system reforms. I look forward to hearing from today’s witnesses and hope we can discover new opportunities for this collaboration."
