Health Care Reform and Medical Imaging: The 10,000-foot View

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The Obama administration is pursuing an aggressive timetable to deliver on a campaign promise to make affordable health care available to all US residents. Though the task is daunting, the original timetable of late autumn is still achievable.

In a letter to Congress dated June 2, 2009, President Obama expressed his broad strokes for the new health care plan, and he asked that it include:

  • a public health-insurance option;
  • a health-insurance exchange;
  • a provision allowing individuals to keep their current coverage;
  • a measure promoting best practices to improve health quality; and
  • a mechanism that would pay for the full cost of health reform (estimated at $1.2 trillion to $1.5 trillion) through a combination of reducing Medicare and Medicaid spending and finding new sources of revenue.

The president also indicated a willingness to consider individual and employer mandates, as well as an enhanced role for the Medicare Payment Advisory Commission (MedPAC). Currently, there are separate plans in the House of Representatives backed by Republicans and by Democrats, as well plans in the Senate being developed by the Health Committee and the Finance Committee. As one would expect from such a large undertaking, where every aspect of the health sector will be affected, there will be many adjustments and compromises before an agreement is reached.

This is an optimal time for those in the health care industry to examine the legislative proposals closely and assess their impact; only then can they develop strategies to maintain or grow their enterprises as the climate continues to change.

Pay for Performance

The president’s budget proposal for fiscal year 2010 included a recommendation to implement a hospital quality-incentive payment program, with projected savings of $11 billion over 10 years. MedPAC continues to recommend that Medicare change payment-system incentives by basing a portion of provider payment on the quality of care provided, and to recommend that Congress establish a quality-incentive payment policy for hospitals, physicians, Medicare Advantage plans, home health agencies, skilled nursing facilities, and dialysis facilities.

The Senate Finance Committee’s April 29 description of policy options on transforming the health care delivery system included proposals to implement a hospital value-based purchasing (VBP) program; to require the HHS secretary to complete VBP-implementation plans for home health agencies and skilled nursing facilities by 2011 and 2012, respectively; to make improvements to the physician pay-for-reporting program; and to require the HHS secretary to establish quality-reporting programs for inpatient-rehabilitation and long-term–care hospital providers by 2012.

The House has not yet issued policies on VBP this year. In 2007, the House Children’s Health and Medicare Protection (CHAMP) bill included a provision on the development, reporting, and use of health care measures, but did not include any provisions on VBP.

The Advanced Medical Technology Association (AdvaMed), a nonprofit association representing medical-device manufacturers, has expressed support for a well-conceived and executed VBP program, and has provided the Senate Finance Committee with detailed comments on its proposals. AdvaMed has held meetings with key Senate and House committees and members’ staffs to discuss modifications to these proposals to preserve innovation by recognizing that measurement should not freeze medical practice in place; to require that all measures receive endorsement from an organization that has broad stakeholder representation, including representatives from the life sciences, and meets certain standards; and urge that efficiency measures consider both quality and cost, and for purposes of measuring efficiency, quality measures should be outcome measures.

Imaging Cuts

Despite their proven role in improving patient outcomes and providing value to the health care system, medical imaging services are frequent targets of cost-cutting efforts. The president’s budget proposal includes a recommendation to use radiology benefit managers (RBMs) to ensure appropriate use of diagnostic imaging. In addition, in its March 2009 report, MedPAC recommended that CMS increase its assumption about how often medical imaging equipment over $1 million is in use from the current 25 hours to 45 hours per week. This represents an increase in the equipment-use assumption from 50% to 90% and would reduce