Webb, Warner join effort to push redesign of Medicare

Sens. Jim Webb and Mark Warner this week joined 26 of their Senate colleagues in sending a letter to the White House emphasizing that the Medicare program be redesigned to incentivize quality and value, rather than quantity, of provider services. Virginia and a number of other states have been identified as “high efficiency areas” for providing Medicare beneficiaries with better value; and research shows that the delivery practices employed by these states have saved the Medicare program upwards of $100 billion a year. 

The current Medicare system penalizes health-care providers that provide efficient care, while rewarding those that order excessive, unnecessary tests and services.

“We write to emphasize the need to realign spending in the Medicare program to focus on providing more value to beneficiaries,” the senators wrote. “As the process of crafting health care reform legislation moves ahead, we look forward to working with you to ensure improvements to Medicare provide seniors with reliable, affordable health coverage.”

The U.S. spent $2.4 trillion in 2008 on health care alone—amounting to one out of six dollars in our economy spent on health care. Sens. Webb and Warner have said that health-care reform must address cost containment and affordability for more Americans. 

The letter to President Obama follows.

September 17, 2009

President Barack Obama

The White House

Dear Mr. President:

As you continue working with Congress to facilitate the passage of health care reform legislation, we write to emphasize the need to realign spending in the Medicare program to focus on providing more value to beneficiaries. We support many of the Medicare payment reforms that are included in current versions of health care reform legislation, but believe additional effort must be made to get better care at a lower cost.

In your September 9, 2009 address to Congress you correctly identified the need to improve Medicare’s efficiency in a way that will reduce costs and promote better quality throughout the health care industry. We believe that a fundamental way to achieve this goal is to realign the Medicare payment system to reward health care providers for the quality of care they deliver, not simply the quantity of services they provide.

We represent states and regions that have demonstrated true leadership in lowering costs to Medicare while increasing the quality of care patients receive. The “high efficiency” areas we represent are known for utilizing integrated health delivery systems and innovative quality measures to provide Medicare beneficiaries with better value. Research shows that these efficient delivery practices can save the Medicare program upwards of $100 billion a year, while also providing beneficiaries better access to the care they need.

Unfortunately, as you know, the current Medicare payment structure penalizes those who provide efficient care, while rewarding those who order unnecessary tests and services. To incentivize more efficient health care practices, Medicare needs to incorporate a payment system that factors in the quality of care provided relative to its cost. This new payment methodology needs to reward providers who achieve good quality outcomes at a low cost. Such a change is critical to reigning in costs and improving patient outcomes.

As the process of crafting health care reform legislation moves ahead, we look forward to working with you to ensure improvements to Medicare provide seniors with reliable, affordable health coverage.