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Vital Signs

Coming to grips with the money-medicine mess

By Jennifer Durgin

The rising cost of health care in the U.S. has become a universal rallying point. Politicians, pundits, patients, and evenmany doctors agree that Americans spend too much on health care—and that the current payment system is largely to blame.

But no similar consensus exists on how to remedy the problem. That's why a group of 47 representatives from academia, private practice, patient advocacy groups, health plans, and large corporations gathered recently at Dartmouth to evaluate and rate the potential of alternative payment models.

Consensus: "We're actually not looking to say, 'Well, here's the one payment system we should move to for the entire United States,' " Robert Smoldt said at the start of the forum. Smoldt, executive director of the Mayo ClinicHealth Policy Center, and the other organizers of the session were instead looking for "a consensus on some assumptions and principles about how we pay for care."

One of a series of forums organized by the Mayo Health Policy Center, this meeting was cohosted by DMS's Dr. John Wennberg. He founded Dartmouth's Center for the Evaluative Clinical Sciences (recently renamed the Dartmouth Institute for Health Policy and Clinical Practice—see this article for more on that change), which cosponsored the forum.

First, the group identified and agreed on some major flaws of the current system: 1) physicians and other providers are paid

First, the group agreed on some major flaws of the current system.

more for performing expensive, invasive, high-tech procedures than for providing low-cost, lowtech, preventive care; 2) a huge amount of money is wasted on care at the end of life that does not extend lives and may even shorten them; 3) uncoordinated care is widespread and leads to poor outcomes and higher costs; and 4) patients are poorly informed about their health-care choices.

Then the group debated the pros and cons of several alternative payment models. Although no model received unanimous support, these three—which aren't mutually exclusive—were by far the most popular:

1) Certification of Shared Decision-Making for Major Surgery: Medical centers would be compensated for establishing formal programs that provide patients with unbiased information about their treatment options. Patients who are well informed often choose less-invasive, less-expensive options. (For more on shared decision-making, see "Making Choice an Option".)

2) Chronic Condition Coordination Payment: Patients with chronic conditions would belong to a "medical home" (a hospital, physician, and/or care network) that would receive a single periodic payment to cover all preventive care, management, and minor acute care associated with their condition. The

amount would be adjusted for the severity of each patient's situation.

3) Mini Capitations: Payments to hospitals and physicians for major acute episodes would be bundled together, which would require hospitals and physicians to better coordinate their services.

Models: Among the payment models that received lower scores fromthe attendees was the pay-for-performance model that Medicare is currently evaluating. (For more on a Medicare pay-for-performance demonstration project, see this article.) The group seemed to agree that the pay-forperformance model is better than the current fee-for-service system, but that it has major shortcomings.

In addition, DMS participants in the forum—including Dr. Elliott Fisher, a health-policy physician-researcher, and Dr. JamesWeinstein, an orthopaedic surgeon and the new director of the Dartmouth Institute for Health Policy and Clinical Practice—put forth several principles to guide the design of any new payment systems. They proposed that incentives be directed toward improving health outcomes, coordinating care, and supporting patient education and decision-making.

Woes: The small but diverse group gathered at Dartmouth wasn't able to solve all of health care's woes, but the attendees did agree on some key strategies. So perhaps there's hope for building a national consensus on healthcare reform after all.

If you'd like to offer feedback about this article, we'd welcome getting your comments at DartMed@Dartmouth.edu.

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