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Medicare’s Sustainable Growth Rate: Fix It or Fail

 , September 30, 2014

At a Capitol Hill briefing today, leaders of three medical societies representing primary care physicians called on Congress to take advantage of the upcoming lame-duck session to replace the Medicare physician reimbursement system with one that actually rewards better patient outcomes.

Citing from a report by the National Commission on Physician Payment Reform, the panel set out a roadmap for fixing a problem that threatens the health of seniors and drains the economy.

Members of the panel, which represented the Society of General Internal Medicine (SGIM), the American College of Physicians and the American Academy of Family Physicians, noted that spending 20 percent of U.S. gross domestic product only buys us the 37th –best health in the world. The physicians went on to cite projections that U.S. health care spending will grow an average of six percent over the next decade—with no sign that the nation’s collective health will get any better.

According to SGIM President William Moran, MD, “The current Medicare payment system challenges the rules of common sense,” noting that under the current Medicare system physicians are paid for each service they provide, regardless of the patient’s outcome, and that high cost, technology-intensive services, like surgery are valued at disproportionately higher rates than long-term management of chronic illness.

“We’re paying for more—and more expensive—medical procedures, and less to help seniors learn how to properly manage their diabetes or keep their congestive heart failure in check,” Dr. Moran added.

Over the past several years, Congress has failed to come up with a permanent fix to the payment formula, opting instead for temporary patches that thus far have cost more than $170 billion.

SGIM convened the National Commission on Physician Payment Reform to assess how Medicare reimburses physicians and how pay incentives are linked to patient outcomes. The blue-ribbon panel, co-chaired by former Senator Bill Frist MD and Steven Schroeder MD from the University of California, San Francisco, published a series of recommendations for transforming the U.S. healthcare system into one that actually rewards better outcomes and pays for quality, not just the number of patients a physician sees each day.  A copy of the report can be found at


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Read the Full Report

Read the September 24 Op-Ed by Senator Bill Frist and Steven Schroeder, MD