[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                     NEW MODELS FOR DELIVERING AND
                      PAYING FOR MEDICARE SERVICES

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 12, 2011

                               __________

                           Serial No. 112-HL3

                               __________

         Printed for the use of the Committee on Ways and Means




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                      COMMITTEE ON WAYS AND MEANS

                         SUBCOMMITTEE ON HEALTH

                   WALLY HERGER, California, Chairman

SAM JOHNSON, Texas                   FORTNEY PETE STARK, California
PAUL RYAN, Wisconsin                 MIKE THOMPSON, California
DEVIN NUNES, California              RON KIND, Wisconsin
DAVE REICHERT, Washington            EARL BLUMENAUER, Oregon
DEAN HELLER, Nevada                  BILL PASCRELL, Jr., New Jersey
PETER ROSKAM, Illinois
JIM GERLACH, Pennsylvania
TOM PRICE, Georgia

                       Jon Traub, Staff Director

                  Janice Mays, Minority Staff Director


                            C O N T E N T S

                               __________
                                                                   Page

Advisory of May 12, 2011 announcing the hearing..................     2

                               WITNESSES

Stuart Guterman, Vice President, Payment and System Reform, 
  Executive Director, Commission on a High Performance Health 
  System, The Commonwealth Fund..................................     5
Lisa Dulsky Watkins, MD, Associate Director, Vermont Blueprint 
  for Health, Department of Vermont Health Access................    26
Dana Gelb Safran, Sc.D, Sr. Vice President for Performance 
  Measurement and Improvement, Blue Cross Blue Shield of 
  Massachusetts..................................................    41
Keith Wilson, M.D., Chair, Governing Board and Executive 
  Committee, California Association of Physician Groups..........    52

                       SUBMISSIONS FOR THE RECORD

AARP.............................................................    89
American Chiropractic Association................................    93
American College of Cardiology...................................    95
American College of Rheumatology.................................    98
American Geriatrics Society......................................   105
American Occupational Therapy Association........................   111
American Physical Therapy Association Private Practice Section...   113
American Physical Therapy Association............................   117
Association of American Medical Colleges.........................   120
Coalition of State Medical and National Specialty Societies......   122
Garrison Bliss...................................................   129
PTPNSGR..........................................................   133


                     NEW MODELS FOR DELIVERING AND
                      PAYING FOR MEDICARE SERVICES

                              ----------                              


                         THURSDAY, MAY 12, 2011

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                    Subcommittee on Health,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 2:45 p.m., in 
Room 1100, Longworth House Office Building, Honorable Wally 
Herger [Chairman of the Subcommittee] presiding.
    [The advisory of the hearing follows:]
                                   HEARING ADVISORY

               FROM THE COMMITTEE ON WAYS AND MEANS

   Chairman Herger Announces Hearing on Reforming Medicare Physician 
                                Payments

Thursday, May 05, 2011

    House Ways and Means Health Subcommittee Chairman Wally Herger (R-
CA) today announced that the Subcommittee on Health will hold a hearing 
to explore new models for delivering and paying for services that 
physicians furnish to Medicare beneficiaries. In what will be the first 
in a series of hearings on this topic, the Subcommittee will focus on 
models that have the potential to improve quality and constrain the 
rate of cost growth. The Subcommittee will hear from witnesses who are 
participating in delivery reform models. The hearing will take place on 
Thursday, May 12, 2011, in 1100 Longworth House Office Building, 
beginning at 2:00 P.M.
      
    In view of the limited time available to hear from witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Committee and for 
inclusion in the printed record of the hearing. A list of witnesses 
will follow.
      

BACKGROUND:

      
    The Sustainable Growth Rate (SGR) formula was implemented in 1998 
as the mechanism that determines the rate by which Medicare fee-for-
service payments to physicians are updated on an annual basis. The SGR 
limits the growth in Medicare physician service spending to the rate of 
growth in the overall economy. The formula is cumulative in that the 
tally of actual and target expenditures is maintained on an on-going 
basis since the formula's inception. If expenditures are lower than the 
target, physician payments are increased. If expenditures are higher 
than the target, payments are decreased. As the rate of growth in 
expenditures on physician services has consistently exceeded the rate 
of growth in the economy in recent years, the SGR system has called for 
a cut in physician payments in each of the past ten years. Congress has 
intervened to avert the cuts each year since 2003 through numerous 
pieces of legislation. As a result of this legislation and the 
cumulative nature of the SGR, the magnitude of the projected cuts to 
physician reimbursements and the cost to override future cuts have 
grown. The Centers for Medicare and Medicaid Services (CMS) projects 
that physicians will receive a 29.5% rate cut next year, absent 
Congressional action. The nonpartisan Congressional Budget Office (CBO) 
estimates that freezing payment rates at their 2011 levels for the next 
10 years would increase Medicare spending by $298 billion.
      
    The Medicare fee-for-service payment system provides an inherent 
financial incentive for physicians to increase the number of services 
they provide. The SGR formula has failed to constrain fee-for-service 
expenditure growth, primarily because of increased utilization but also 
because Congress has repeatedly passed legislation to override the cuts 
called for by the SGR. In addition, Medicare payments to physicians are 
currently made without taking into account the quality of the services 
provided. There is broad acknowledgement of the shortcomings of the 
current payment system and the growing importance of moving to payment 
models that incentivize patient-centered, high-quality, and outcomes-
oriented care.
      
    In announcing the hearing, Chairman Herger stated, ``There is 
widespread agreement that Congress must abandon the practice of short-
term patches to avoid cuts to physician payment rates, which only make 
the problem larger and more expensive to fix. The SGR system creates 
tremendous uncertainty year after year forphysicians and Medicare 
beneficiaries alike. This hearing will enable the Subcommittee to hear 
details about other payment approaches that hold promise for driving 
high-quality, efficient care. The experience of those at the forefront 
of these innovative efforts will help the Subcommittee as it considers 
how to better reimburse physician services.''
      

FOCUS OF THE HEARING:

      
    The hearing will focus on innovative delivery and physician payment 
system reform efforts.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``Hearings.'' Select the hearing for which you would like to submit, 
and click on the link entitled, ``Click here to provide a submission 
for the record.'' Once you have followed the online instructions, 
submit all requested information. ATTACH your submission as a Word 
document, in compliance with the formatting requirements listed below, 
by the close of business on Thursday, May 26, 2011. Finally, please 
note that due to the change in House mail policy, the U.S. Capitol 
Police will refuse sealed-package deliveries to all House Office 
Buildings. For questions, or if you encounter technical problems, 
please call (202) 225-1721 or (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word format and MUST NOT exceed a total of 10 pages, including 
attachments. Witnesses and submitters are advised that the Committee 
relies on electronic submissions for printing the official hearing 
record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. All submissions must include a list of all clients, persons and/
or organizations on whose behalf the witness appears. A supplemental 
sheet must accompany each submission listing the name, company, 
address, telephone, and fax numbers of each witness.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      

    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.

    Chairman HERGER. The Subcommittee will come to order. We 
are meeting today to hear from four individuals who have 
experience to share that will inform us as we consider how to 
reform Medicare payments to physicians. This is a priority for 
the Subcommittee as Medicare physician payment rates will be 
cut by nearly 30 percent on January 1 unless Congress acts.
    The flaws of Medicare's sustainable growth rate are well 
known to members of this Subcommittee. Congress has repeatedly 
enacted legislation to avert scheduled rate cuts that have been 
called for under the SGR every year since 2003. This has 
created deeper holes for the following years, and next year, 
with the scheduled 30 percent cut, is no different.
    These cuts could be devastating for patients and 
physicians, especially in rural areas like my northern 
California district. Many physicians have warned they will have 
little choice but to stop participating in Medicare, leaving 
seniors without access to the medical care they need.
    Republicans and Democrats alike have kicked the can down 
the road long enough. We cannot continue to patch over this 
problem with short-term fixes of a few months or a year at a 
time. The uncertainty of Medicare payment policies is taking a 
toll on physicians, and with each passing year the cost of a 
long-term solution grows larger. It is time that we work 
together to find a fiscally responsible solution to this 
problem.
    In addition, we need the physician and provider community 
to be willing participants in this endeavor to reform the SGR. 
Medicare spending is on an unsustainable path, and we must find 
a better way.
    This is the first of what will be a series of hearings the 
Subcommittee will hold on physician payment reform. It is my 
hope that by starting early, we will arrive at a payment system 
overhaul that can pass the House.
    Today we will explore innovative delivery models that are 
taking place across the country. The testimony we will hear 
shares a common theme that coordinated care produces more 
efficient care with better outcomes at a lower cost, and that 
fee-for-service delivery systems encourage higher spending 
without regard to quality.
    I believe that the future of Medicare depends on a 
transition away from the fragmented fee-for-service system to a 
system where the incentives are aligned with better patient 
care, not just more patient care. I am also open to hearing 
other ideas as we continue to explore alternatives to the SGR.
    Chairman HERGER. Before I recognize Ranking Member Stark 
for the purposes of an opening statement, I ask unanimous 
consent that all Members' written statements be included in the 
record. Without objection, so ordered.
    Chairman HERGER. I now recognize Ranking Member Stark for 5 
minutes for the purpose of his opening statement.
    Mr. STARK. Thank you, Mr. Chairman, and I want to thank 
your staff for working with us to put together this first 
hearing on the SGR reform. It is not a partisan issue, it is a 
problem that has been around for more than a decade, and 
neither party has been able to enact a permanent solution.
    That said, it is not the Democrats that haven't tried, and 
last year we passed a permanent reform of the SGR system that 
would have gotten us out of this annual kick-the-can approach, 
but our legislation would have essentially reset the existing 
system and started over with a formula that divided physicians 
into two groups, primary care, including the preventive service 
and specialty care, and with different expenditure targets for 
each group. While the physicians would still be accountable for 
spending growth, access to primary-care services would have 
been promoted by getting an extra allowance for the primary 
care. Unfortunately, only one Member on your side of the aisle, 
Dr. Burgess, was willing to join with us in that legislation, 
but it was endorsed by virtually the entire physician 
community.
    Today's hearing is going to focus on a component of 
reforming the physician payment system, delivery system reform, 
and I think we will hear the witnesses say that we have no 
chance of reforming that until we change the way we pay for 
medical care, and that the existing fee-for-service system 
merely incentivizes the provision for additional care.
    So our witnesses today provide great examples of 
experimentation going on across the country. I want to thank 
them for taking the trouble to be here.
    I also want to tell them that as an incipient receiver of 
cataract surgery in the next week, I can't see you. I have your 
names down here, and you are kind of that nice blur, so if I 
misdirect a comment to you, please, please forgive me.
    Again, thank you, and I look forward to hearing our 
witnesses. I want to thank them for coming today and being so 
patient because of the voting schedule that necessitated our 
stretching this out into the late afternoon.
    Thank you, Mr. Chairman.
    Chairman HERGER. Thank you.
    Chairman HERGER. Today we are joined by four witnesses. The 
first witness will share ideas on how Medicare can encourage 
physicians to participate in care models supported by different 
payment systems. The following three witnesses will describe 
their efforts to promote high-quality care at a lower cost 
under these types of payment systems.
    Our witnesses are Stuart Guterman, who is vice president of 
payment and system reform at the Commonwealth Fund in 
Washington, DC; Dr. Lisa Dulsky Watkins, M.D., who is the 
associate director of the Vermont Blueprint for Health and an 
employee of Vermont Department of Health Access; Dana Gelb 
Safran, who is the senior vice president for performance 
measurements and improvement at Blue Cross Blue Shield of 
Massachusetts; and Dr. Keith Wilson, who is the chair of the 
governing board of the California Association of Physician 
Groups.
    You will each have 5 minutes to present your oral 
testimony. Your entire written statement will be made part of 
the record.
    Mr. Guterman, you are now recognized for 5 minutes.

   STATEMENT OF STUART GUTERMAN, VICE PRESIDENT, PAYMENT AND 
    SYSTEM REFORM, EXECUTIVE DIRECTOR, COMMISSION ON A HIGH 
 PERFORMANCE HEALTH SYSTEM, THE COMMONWEALTH FUND, WASHINGTON, 
                               DC

    Mr. GUTERMAN. Thank you, Chairman Herger, Congressman Stark 
and Members of the Subcommittee for this invitation to testify 
on Medicare physician payment.
    I am Stuart Guterman, vice president for payment and system 
reform at the Commonwealth Fund, which is a private foundation 
that aims to promote a high-performance health system that 
achieves better access, improved quality and greater 
efficiency, particularly for society's most vulnerable members, 
including those with low incomes, the uninsured, young children 
and elderly adults.
    The Congress faces a challenging dilemma in considering 
Medicare physician payment. On the one hand Medicare spending 
is rising at a rate that threatens the program's continued 
ability to fulfill its mission. On the other, the sustainable 
growth rate mechanism, which is intended to address that 
problem, produces annual reductions in physician fees that are 
equally difficult to accept. This dilemma arises from the 
underlying mismatch between the primary cause of rising 
spending, which is the volume and intensity of services 
provided, and the focus of the SGR, which is to set the fees 
that physicians receive for each service they provide.
    Determining how much to pay physicians certainly is an 
important issue, but what is critical is determining how to pay 
physicians so that the Medicare program gets the best care 
possible for its beneficiaries.
    We do get what we pay for in our health system, more volume 
and more intensity, with little reward for high performance 
either in terms of effectiveness or efficiency. We need to 
start paying for what we want; to reward providers for the kind 
of care they would like to be providing, but all too often are 
discouraged from or even penalized for under our current 
system.
    In changing how we pay for health care, we must recognize 
the diverse array of organizational models that make up the 
health care delivery system and the differences in the 
environments in which those organizations operate.
    Provider organizations vary widely in size, scope and 
degree of integration and in the extent to which they may be 
willing or able to assume broader clinical or financial 
accountability for their patients' care. One size will not fit 
all, which means that payment and health care delivery reform 
must provide an array of payment approaches that apply to 
providers in the context of their current organizational 
structure, while at the same time establishing rewards and 
requirements that both encourage high quality and value, and 
provide incentives for those organizations to evolve as 
necessary to meet the needs of their community.
    The availability of more sophisticated and more substantial 
rewards for high performance for organizations that can deliver 
more effective and efficient care can be used to provide an 
incentive to move toward more coordination and accountability 
and away from the fragmented delivery system that patients 
currently face. The right incentives can encourage providers to 
work together either in formal organizations or in less formal 
relationships in ways that enable them to take broader 
responsibilities for the patients they treat and the resources 
they use, and to benefit from doing so.
    As organizational arrangements evolve, payment methods can 
be adjusted to encourage and reward increasing levels of 
accountability with continuous development and improvement over 
time, but even over time different payment approaches and 
organizational models may be required in different areas and 
different circumstances to accomplish the goals of health 
reform.
    An important vehicle for developing an array of new 
approaches to payment, organization and delivery is the new 
Center for Medicare and Medicaid Innovation in the Centers for 
Medicare and Medicaid Services. The innovation center is 
mandated to pilot innovative payment and delivery system models 
that show significant promise for maintaining or improving the 
quality of care in Medicare, Medicaid and the Children's Health 
Insurance Program, while reducing program costs.
    These pilots provide a mechanism for identifying, 
developing, implementing, testing and spreading innovative 
approaches to health care financing and delivery that can help 
improve health system performance. The underlying philosophy 
should be one of rapid development and spread of innovative 
payment and delivery models with the ability to move quickly, 
learn as one proceeds, and try multiple strategies rather than 
focusing on a single model; in other words, for CMS and other 
payers, as well as providers, to move beyond business as usual.
    Medicare, by promoting an array of innovations in payment, 
organization and delivery, could lead the Nation to higher 
health system performance and yield great benefits for 
individuals, providers and society as a whole.
    I am honored to be here with representatives of three 
innovative organizations and interested to learn more about 
what they are doing. Thanks.
    Chairman HERGER. Thank you.
    [The prepared statement of Mr. Guterman follows:]

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    Chairman HERGER. Dr. Watkins, you are recognized for 5 
minutes.

  STATEMENT OF LISA DULSKY WATKINS, M.D., ASSOCIATE DIRECTOR, 
  VERMONT BLUEPRINT FOR HEALTH, DEPARTMENT OF VERMONT HEALTH 
                   ACCESS, WILLISTON, VERMONT

    Dr. WATKINS. Thank you very much. Chairman Herger, 
Congressman Stark, Members of the Subcommittee, thank you for 
this opportunity to address you today.
    I don't think there is any question that fee for service 
promotes volume and rushed care, as Mr. Guterman has pointed 
out. And the point of the Vermont Blueprint is to address that 
very issue with an emphasis on moving in a transition from 
episodic or acute care to planned and preventive care.
    The Vermont Blueprint for Health is leading system delivery 
reform in our State and nationwide. We have been successful in 
some ways largely due to strong bipartisan support from our 
legislature and from our Governor over the last 8 years.
    The 2003 launch of the blueprint, in response to the 
overwhelming, looming problems with the cost of chronic 
disease, as we look at the baby-boom generation aging and 
increasing obesity-related problems such as diabetes and heart 
disease, was a very specific chronic-care initiative. It has 
since transformed significantly into a true spectrum of 
prevention with health maintenance that is appropriate to age 
and gender, now moving into pediatrics and ``birth to earth,'' 
if you will.
    The overall goals are obviously to improve health care 
services both in terms of the outcomes that are able to be 
demonstrated clinically, as well as the experience with patient 
care; look at the health of the population as a whole; and 
control health care costs.
    Our innovations in terms of payment reform have been 
twofold and very specific. We are continuing with fee for 
service because that is the nature of payment in our country 
today. But, in addition, we have two new streams of funding 
specifically for primary care, which has been the emphasis of 
our work thus far.
    One, it revolves around true, enhanced payments on a per-
patient, per-month basis attributed to those practices that are 
recognized as Patient-Centered Medical Homes through the NCQA 
recognition process, a grade, if you will, from 0 to 100. The 
higher the grade, the higher payment per patient per month. 
That goes directly to the practice. And this is not a function 
of lab tests or cut-offs that are punitive; this is truly a 
function of communication and access to the practice.
    A second new stream of funding comes to the practice and 
the community through the hiring of individuals at a Community 
Health Team, a very novel approach to actually care 
coordination at the local level. These multidisciplinary, 
locally based care-coordination teams serve multiple practices 
and actually do the outreach and coordination that desperately 
needs to be done in primary care, but is not compensated for 
and, therefore, often falls between the cracks.
    As I said, these are two new funding streams, and the 
innovation in Vermont has required that all insurers who do 
business in the State of Vermont, our major commercial payers, 
Vermont Medicaid and now Medicare, will be joining us to 
actually pay for these innovations. So it is additional funding 
to the primary care practices to benefit the patients and their 
families. The Center for Medicare Innovation has made that 
possible through the Multipayer Advanced Primary Care Practice 
Demonstration, allowing Medicare to join with private insurers 
and Vermont Medicaid in these innovations.
    We do have trends that are very encouraging in terms of 
cost and decreased utilization. A lot of that detail obviously 
cannot be shared in 5 minutes, but we are actually seeing 
decreased utilization of emergency rooms and inpatient days, 
both of which are extraordinarily expensive. And this is very 
encouraging as we look at our trends.
    We have over 2 years of experience now in our first pilots. 
We are rolling out to the entire State because we have 
legislation that mandates that the insurers continue to allow 
us to do this work and actually support every primary care 
practice in the State of Vermont that chooses to be part of 
them.
    Our evaluation infrastructure is extraordinarily robust. We 
are very excited to have probably more data than we will know 
what to do with, hopefully within the next year or so, both in 
terms of clinical data, experience of care, as well as a 
return-on-investment model that is allowing us to look at the 
financial impact and examine the efficacy of our program.
    I don't have enough time to describe the anecdotes, but I 
think I can really very clearly state that in terms of the 
experience of this program, that both providers and patients 
are extremely happy with it. Patients will describe the sense 
of feeling someone cares about them, really wrapped around 
them, and getting services that fall far outside the normal 
traditional health care experience of going to the doctor's 
office. And the providers who have been involved in this 
process through these last couple of years have actually said 
in very clear terms and in public that the joy of the practice 
of medicine is back.
    Thank you.
    Chairman HERGER. Thank you.
    [The prepared statement of Dr. Watkins follows:]

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    Chairman HERGER. Ms. Safran, you are recognized for 5 
minutes.

STATEMENT OF DANA GELB SAFRAN, SC.D., SENIOR VICE PRESIDENT FOR 
PERFORMANCE MEASUREMENT AND IMPROVEMENT, BLUE CROSS BLUE SHIELD 
            OF MASSACHUSETTS, BOSTON, MASSACHUSETTS

    Ms. SAFRAN. Thank you, Mr. Chairman, Congressman Stark, 
Members of the Committee. I am Dana Gelb Safran, senior vice 
president for performance measurement and improvement at Blue 
Cross Blue Shield of Massachusetts, and I thank you for the 
opportunity to speak today about the work that we are doing on 
payment reform.
    As this committee considers the important issue of 
physician payment, and specifically the SGR, I am pleased to 
have this opportunity to share a model that has taken hold in 
Massachusetts.
    This work and its early results suggest that it may indeed 
be necessary to think beyond physician payment to consider 
overall system payment in order to realize the goal of 
sustainable growth. A holistic view of payment may also be 
necessary to reduce the fragmentation of care that we all 
recognize as a key failing of our current system.
    In 2007, Blue Cross of Massachusetts recognized that to 
address the unrelenting and unsustainable medical cost trends 
would require fundamental change in provider payment and 
incentives. With an annual medical spend of about $13 billion, 
we sought to develop a model that would do two things, 
significantly improve the quality, safety and outcomes of care, 
and significantly slow the rate of growth on that 13 billion. 
The alternative quality contract, or AQC, developed in 2007 and 
launched in 2009, was our effort to advance these twin goals.
    Approximately 40 percent of our provider network has now 
contracted under the AQC model. There are five features of the 
model that differ from our traditional contracts. First, a 
provider organization that enters an AQC contract agrees to 
accept accountability for the full continuum of care for their 
patients from prenatal care to end-of-life care and everything 
in between. This doesn't mean that the provider organization 
itself must be capable of providing every aspect of care, but 
they must agree to be accountable for both the cost and quality 
of care provided to their patients, regardless of where it is 
provided.
    Second, the AQC contract is a 5-year deal, which is 
considerably longer than our traditional contracts.
    Third, payment is based on a global budget for a defined 
patient population. The AQC thereby moves way from fee-for-
service incentives and establishes a model in which the 
provider assumes accountability for total medical spending on 
its patient population.
    Importantly, each AQC provider's budget is set based on 
that organization's historical rate of spending for its patient 
population. In this way providers are assured that their 
starting budgets contain sufficient funds to care for their 
patients, but have a strong incentive to spend those dollars 
prudently.
    A fourth distinguishing feature of the AQC is that the rate 
of inflation on total medical spending over the 5-year contract 
is negotiated up front and is designed to come down to rates 
approximating general inflation over the 5-year period.
    A fifth and very important feature of the AQC is that it 
includes financial incentives tied to performance on a broad 
set of quality and outcome measures. In total, the model 
includes 64 nationally accepted, clinically important measures 
of hospital and ambulatory quality.
    To our knowledge, the AQC is the first contract that 
requires providers to assume responsibility for the outcomes 
achieved through their care, not solely for the care delivered 
in the four walls of their setting. The importance of this 
feature cannot be overstated.
    Finally, let me highlight some early results of the AQC. 
With respect to medical spending, year 1 results show the AQC 
is on track to achieve its original goal of cutting spending 
growth rates in half over a 5-year contract period. Each and 
every AQC organization was successful in managing to their year 
1 budget and achieving savings, despite the fact that AQC 
groups vary enormously with respect to size, organizational 
structure, geography and, importantly, their prior experience 
with accountability for medical spending.
    With respect to quality, each and every AQC organization 
made significant improvements across a broad set of quality and 
outcome measures. By the end of year 1, quality of care in the 
AQC segment of our network was significantly higher than the 
non-AQC segment, and rates of improvement were several fold 
higher than prior improvement rates.
    These early findings hold several important lessons, but 
perhaps foremost among them is that the model provides evidence 
that a payment system that creates provider accountability for 
both medical spending and health care quality and outcomes 
appears to be a powerful vehicle for realizing the goal of a 
high-performance health care system with a sustainable spending 
growth rate.
    I thank you very much and look forward to your questions.
    Chairman HERGER. Thank you.
    [The prepared statement of Ms. Safran follows:]

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    Chairman HERGER. Dr. Wilson, you are recognized for 5 
minutes.

  STATEMENT OF KEITH WILSON, M.D., CHAIR, GOVERNING BOARD AND 
   EXECUTIVE COMMITTEE, CALIFORNIA ASSOCIATION OF PHYSICIAN 
                GROUPS, DIAMOND BAR, CALIFORNIA

    Dr. WILSON. Thank you, Chairman Herger, Ranking Member 
Stark and members of the Health Subcommittee for inviting me to 
testify on potential new models of health care delivery and 
physician payment models for Medicare beneficiaries.
    I am here representing the California Association of 
Physician Groups, also known as CAPG, and its over 150-member 
multispecialty and IPA groups. Together we care for over 15 
million Californians, or one-half of the insured population of 
California.
    I am also here as a practicing physician and regional 
medical director of HealthCare Partners, a large multispecialty 
medical group, and IPA serving much of greater Los Angeles 
Orange County area.
    I would like to speak to the virtues of capitation in 
contrast to the unsustainable nature of fee-for-service 
medicine. I would also like to highlight the value of 
capitation leading to a system of coordinated, integrated care 
that is not usually replicated in the fee-for-service model.
    In California we have over two decades of experience in 
making prepaid medicine work, and I would like to share with 
you some of the lessons learned.
    Capitation is great at creating an environment in which the 
at-risk provider groups are forced to focus on the total cost 
of health care and consequently figure out creative ways to 
impact the cost. This is usually best done by keeping patients 
as healthy as possible and out of the hospital.
    We have designed systems of care that treat the patient 
based on their individual need and disease burden so that we 
may improve and stabilize their condition. We do this through a 
patient-centric model, allocating resources in a targeted 
manner.
    My written testimony highlights a few of these creative 
interventions California groups have deployed, such as risk 
stratification and disease-specific care management programs.
    We have learned to protect the public from groups taking 
excessive risk and subsequent failure through the 
implementation of regulatory oversight by the Department of 
Managed Health Care. California groups are required to report 
quarterly on solvency metrics, such as tangible net equity, 
timely payments and cash-to-claim ratios, among others.
    We have also learned to avoid denial of care through public 
reporting of quality metrics and patient satisfaction scores 
deployed by the Integrated Healthcare Association.
    Health plans incentivize physician group performance 
through pay-for-performance quality metrics developed by 
multiple stakeholders.
    Capitation, if I might describe it a bit, consists of a 
fixed payment paid directly to the medical group, usually in 
the form of a PMPM, or per-member per-month payment. The 
physician group, or IPA, is then accountable for providing care 
for patients assigned to them within that budget. This payment 
methodology allows a predictable revenue stream that enables 
groups to plan for capital improvements and investment in 
infrastructure, like health information technologies. Indeed, 
some of the most sophisticated and advanced IT infrastructure 
exists in California groups as a direct by-product of 
capitation.
    CAPG has developed a Standards of Excellence program that 
allows groups to compare their internal processes and 
capabilities on a voluntary basis. This program also provides a 
roadmap to up-and-coming groups, identifying the tools and 
capabilities they will need to provide patient-centered care.
    We think the California model can be a model for the rest 
of the country as we seek an alternative to fee-for-service 
medicine and to promote the spread of ACOs. We see the ACO 
model, however, as being handicapped, as they will need similar 
infrastructure to California groups, but there is no source of 
revenue such as capitation to benefit from.
    We call for the deployment of capitation as the law allows 
for groups that are ready to take risk. We also suggest a means 
of front-loading revenue to groups and potential ACOs be sought 
and found so that they can develop the systems of care 
necessary to be responsible for a population of patients.
    In closing, I would like to emphasize the superior 
performance of capitated model in delivering better quality, 
superior outcomes with great cost savings. One example of this 
is the comparative bid days between capitated Medicare in 
California yielding bed days of 982 per 1,000 versus 
traditional fee-for-service Medicare yielding bed days of 1,664 
per 1,000. This relative value to overall system in terms of 
dollars and cents is astronomical.
    I would like to thank you for the opportunity to speak to 
the committee today. I hope this information has been useful, 
and I would be happy to answer questions as I can.
    Chairman HERGER. Thank you.
    [The statement of Dr. Wilson follows:]

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    Chairman HERGER. I want to thank each of our witnesses for 
describing their involvement and efforts that use payment 
models that encourage coordinated, efficient care. One goal of 
today's hearing is to understand the impact of Medicare paying 
physicians on a fee-for-service basis, including its 
contribution to the SGR problem.
    With that in mind, I would like to ask the three witnesses 
involved with different payment models to briefly state their 
view of the fee-for-service payment method.
    Dr. Watkins, if you could respond first, followed by Ms. 
Safran and then Dr. Wilson.
    Dr. WATKINS. I believe the fee-for-service model has been 
severely detrimental, especially to primary care. I believe 
that is true nationwide and not just in Vermont. The sense that 
primary care providers have of being on a hamster wheel, of 
having to see patient after patient and being rewarded for 
seeing more patients in a day, as opposed to the quality of the 
services they provide, is a never-ending negative cycle.
    Chairman HERGER. Ms. Safran.
    Ms. SAFRAN. I believe you summed it up well in your opening 
remarks, actually, that fee-for-service payment system has 
delivered to us really what it was designed to, which is a 
system that incentivizes more services.
    But now we realize that more services don't necessarily 
provide to us better quality or better outcomes for the patient 
population, and that, in fact, we will need a different system 
of payment if, in fact, what we are looking for out of our 
health care system is not simply a larger quantity of care, but 
better quality and outcomes of care. And also we will have to 
move away from a fee-for-service system if we look to resolve 
the fragmentation that we have today, because paying each for 
their own individual piece adds up to pieces not tied together 
as a whole.
    Thank you.
    Chairman HERGER. Thank you. Dr. Wilson.
    Dr. WILSON. Yes, sir. As a practicing provider, I have 
worked under both fee and payment methodologies, fee-for-
service as well as capitation, and I can say pretty 
unequivocally that I much enjoy the practice of medicine in a 
capitated environment than I do in a fee-for-service 
environment.
    And as I have shared, you know, physician locker rooms with 
docs who practice fee-for-service medicine, the motivation 
behind those doctors' behavior is vastly different than the 
doctors who practice under a capitated or a salary model. And I 
think patients oftentimes are harmed by fee-for-service models 
that are overly zealous, and they don't lead to coordination 
and integration of care.
    So in summary, I would just say that capitation and/or 
other means of payment, even if it is just a salary model, lead 
to a purer form of medicine being practiced than fee-for-
service, and I think patients benefit more in that model.
    Chairman HERGER. Ms. Safran, your health plans go by the 
Alternative Quality Contract Program of increased quality and a 
slower rate of growth as the one we share. I have a few 
questions related to your success in achieving these goals. How 
much has provider-spending come in under budget?
    Ms. SAFRAN. Well, in year 1 of the first 5-year contracts, 
every AQC provider organization came in under budget, and that 
ranged from 1 to 2 percent under their budget in what they were 
able to achieve in just the first year of savings.
    Chairman HERGER. Are you surprised that the AQC provider 
groups have fared so well on 64 quality measures of outpatient 
and inpatient care?
    Ms. SAFRAN. I was very surprised. I have spent my career as 
someone developing and implementing quality measures and have 
never seen anything like the magnitude of improvement on a very 
broad set of quality measures that we saw in year 1 of this 
contract. So it was really clear that not just the incentives 
that are in front of them that make a difference, though I will 
not say that they don't, they are a very important piece, but 
also important is the fact that they are receiving, on an 
ongoing basis, information over the course of the year about 
how they are doing on those measures so that they are able to 
manage to success. And every one of those organizations has put 
in place leadership that is very much dedicated to working with 
the front-line physicians on that broad set of quality and 
outcome measures.
    Chairman HERGER. How have the AQC participants been able to 
reduce costs through important improvements, such as decreased 
hospital infections, so quickly?
    Ms. SAFRAN. Well, in year 1 of the contract, the 
improvements on spending really came through--more through the 
work on thinking carefully about where those providers were 
referring patients for things like standard laboratory tests 
and imaging and other forms of care in which there are no 
relationships in place, where, roughly speaking, it is a 
commodity service. And the provider now was quite aware of the 
fees that we pay for those services in different areas, and it 
became important to them to refer their patients to lower-cost 
settings for services where it was a commodity like a lab test 
or imaging.
    The harder work of reducing readmissions, changing overall 
utilization of care, reducing non-urgent ED use, is work that 
some of the more mature AQC organizations did make progress in, 
and significant progress, in year 1. But those types of more 
difficult changes are things that we know we are going to see 
greater progress on in years 2 through 5 over the contract.
    Chairman HERGER. Thank you.
    Ranking Member Stark is recognized for 5 minutes.
    Mr. STARK. Thank you, Mr. Chairman, and I would like to 
again thank the witnesses for their very informative testimony.
    Dr. Wilson, you have huge numbers in your groups. Now, are 
the Kaiser physician groups part of your group?
    Dr. WILSON. Yes, they are.
    Mr. STARK. They are, I gather, I have been led to believe, 
the largest professional partnership and the largest 
professional corporation in the country; is that not correct?
    Dr. WILSON. To my understanding, they are the largest 
professional physician group in the country.
    Mr. STARK. I know that in my district, or in the county 
that I represent, there are 1.2 million people, and half of 
them belong to Kaiser. They always say if you are run over by 
somebody, you have a 50 percent if you take them to the Kaiser 
emergency room that you are going to the right place.
    Do you think that the Kaiser model, the staff model, could 
be used in other areas? Kaiser has worked here in the 
Washington area with not any great success, because they have 
been unable to hire physicians, they have had to contract with 
groups, and they have had to rent hospital rooms the same as 
any other managed-care plan.
    But if we could establish some type of staff model outline, 
do you think that we could transmit that success to other parts 
of the country?
    Dr. WILSON. The answer would be yes. I think, you know, 
there are obvious challenges in importing a new model of care 
to a delivery system, and, you know, often there is a 
requirement of critical mass before you can actually start to 
impact the culture of that environment.
    Kaiser, you are right, is the largest physician delivery 
system in the State of California. The company that I work for, 
HealthCare Partners, is the second largest physician 
organization in the State of California, with practices in 
Florida and Nevada.
    I know Kaiser has exported its model to other parts of the 
country successfully. Washington seems to be one of the 
exceptions in which it didn't quite succeed, and, I guess, 
Maryland as well.
    But I do think the model is transplantable. I think 
physicians coming out of training now are more likely to seek a 
Kaiser type of practice than they are to hang their own 
shingles. I think, you know, that the types of doctors 
graduating training have changed. They are different than the 
doctors that graduated with me.
    But so in short, yes, I do think that model can be 
explored.
    I do think there are other models in California, I think, 
that are potentially more easily exported than Kaiser, because 
Kaiser is a bricks-and-mortar kind of organization, and so it 
requires significant up-front cost. And so, you know, the 
ability to just sort of plant that in an environment in which, 
you know, the economics haven't been established is a little 
bit more challenging.
    But, you know, a large number of California physician 
groups, or IPAs, Independent Practice Associations, which don't 
have the overhead of a Kaiser model, but do bring the 
infrastructure, the coordination of care, the integration, the 
IT capabilities and the other things that capitation, as I 
spoke of, lends itself to, but it is probably more easily 
transplantable.
    Mr. STARK. Thank you.
    Ms. Safran, do you suppose that the recent Massachusetts 
universal care law, or whatever it is, adds to the performance 
that you noticed in the insurance plans, or adds to the 
participation, I guess I should say?
    Ms. SAFRAN. Well, without question, universal insurance has 
drawn our attention now in Massachusetts to the cost of health 
care and importantly to the rate of increase in that cost.
    And so without a doubt the providers in the Massachusetts 
market are aware that attention is on cost, that payment reform 
is happening. They are very active conversations, not just 
because of our model, but in the State as a whole. So 
absolutely, I think that uptake of providers into our AQC model 
happened much more quickly because of the attention to costs 
that came upon us as we had universal insurance.
    Mr. STARK. And in the great State of Vermont, is there 
something we can learn there that can be exported? You are the 
only single-payer State; is that right? Or the only single-
payer plan, I guess.
    Dr. WATKINS. We have legislation that was passed in this 
most recent session and will be signed into law by Governor 
Shumlin. That legislation could best be described as a first 
step towards an integrated payment system for the State of 
Vermont.
    Chairman HERGER. Excuse me. The gentleman's time has 
expired. Thank you very much.
    I recognize the gentleman from Washington Mr. Reichert for 
5 minutes.
    Mr. REICHERT. Thank you, Mr. Chairman. I will add my thanks 
to all of you for being so patient and waiting in our waiting 
room while we have been so busy voting.
    I have just jotted down some common themes here. I know 
that all of us--I think the good thing, as Mr. Stark has 
stated, we are all here, this is a bipartisan effort, 
recognizing that the patients are the focus of this effort, 
trying to provide high-quality health care, cost-effective and 
accessible, as we use those three descriptors.
    But the witnesses today have been pretty consistent in 
mentioning coordinated care, coordinated team, community care, 
overall system payment, holistic system, holistic approach, a 
full continuum of care, patient-centric model, coordinated, 
integrated. I think that is what everyone is hoping for and 
wishing for, and it looks like some of you on the panel today 
have at least begun to accomplish some of those goals in making 
the patient the center.
    I am really interested, of course, in the seniors in this 
discussion. And as we look forward to reforming the current 
formula, I think it is important that we ensure that our 
seniors continue to have access to quality and effective care 
and affordable care. So I think it is key--and this question is 
for Ms. Safran--it is key to communicate and educate our 
seniors. So under your AQC plan, is there an education 
component, you know, one where you would educate, especially 
seniors, or anyone under the plan for that matter, about their 
care provider now is an AQC plan member and, therefore, would 
deliver service in a different way?
    Ms. SAFRAN. The answer to your question is that we gave an 
enormous amount of thought to how and whether to do education 
for our members about the AQC, and in the end the plan has not 
done any kind of proactive outreach and education to our 
members about the AQC. And the reason for that is that the AQC 
has a contract with our physician network and, in some cases, 
with hospitals party to those contracts.
    Our members have bought products from us that still stand, 
that are unchanged by those contracts, and that in our 
experience, when we have a communication with our members, it 
won't surprise you to know members get confused and worried 
when they hear from their health plans. And so we really hold 
ourselves to a standard that we will communicate with our 
members when there is something that they need to do, when 
there is something that they need to pay attention to.
    And as we struggled with what exactly would we tell them 
about the AQC, it wasn't clear, in fact, that there is anything 
different that they need to do. And, in fact, when we had the 
impressive year 1 results, we thought again about communicating 
with them and saying--you know, congratulating them on how 
fortunate they are to be in practices like this. But in the end 
we have left it to the physicians to communicate if they want, 
but really there is nothing the plan needs to advise the 
members about.
    Mr. REICHERT. There is nothing in part of the contract that 
would require the doctors to communicate any difference. And 
wouldn't it be important for the patients to know that they are 
now in this holistic sort of preventive care arena, or they 
just, as they go through it, kind of realize that in 
communicating with their provider?
    Ms. SAFRAN. Well, I think they do realize it, and they 
realize it in a very positive way. That is to say, in order to 
be successful on the quality and outcome measures, these 
practices are interacting with their patients in a way that the 
patients, when they communicate with us, tell us that it feels 
like concierge care, but they never paid a concierge fee, 
because the practice is suddenly doing outreach to them between 
visits to let them know about care that they need, to find out 
how their management of their chronic condition is going and 
what barriers they are facing. So that is what the members and 
the patients are experiencing.
    Mr. REICHERT. I appreciate that.
    I notice that my time is getting short, and my next 
question is going to be a little bit longer, Mr. Chairman, and 
I will submit that question to Dr. Wilson in writing.
    [The information follows: Dr. Wilson]

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    Mr. REICHERT. Thank you. I yield back.
    Chairman HERGER. The gentleman yields back.
    The gentleman from Wisconsin Mr. Kind is recognized for 5 
minutes.
    Mr. KIND. Thank you, Mr. Chairman. Thank you for holding 
this very important hearing, and I want to thank our witnesses 
for your testimony here today.
    Listen, we have just gone through a very gut-wrenching 
health care reform debate ourselves here in Washington, and 
incorporated a lot of aspects of what is happening around the 
Nation. I assume, Ms. Safran, the Massachusetts model, too, is 
something that was under consideration.
    And I think the ultimate verdict on health care reform is 
going to be not only changing the way health care is delivered, 
but how we pay for it. I mean, it is replete with studies here 
that show that close to one out of every three health care 
dollars is spent on tests and procedures and things that don't 
work. They don't improve patient care. And oftentimes, because 
of the overtreatment patients are receiving, they are being 
left worse off rather than better off. That is close to $700 
billion a year in a 2.3-, $2.4 trillion system that we are not 
getting a good bang for the buck for.
    And I have been encouraged hearing the testimony here 
today, and perhaps there is an opportunity for some bipartisan 
cooperation to move forward on a lot of the reforms that you 
are all testifying about, a more integrated, coordinated, 
patient-focused care system.
    Now, for the sake of full disclosure, I come from a 
country, western Wisconsin, that has the Mayo system in it, 
Gundersen, Marshfield, Dean, that are doing this already and 
producing tremendous results. And it sounds like that is a 
model that we should be encouraging. And, in fact, it is 
something we incented in the Affordable Care Act, those types 
of models of care that are more coordinated and patient-
focused, which is really at the heart of the Affordable Care 
Act, including payment reform.
    And I am convinced that fee for service, as I am hearing 
from all of you today, is an unsustainable model of payment for 
our health care providers. It is not fair to them; it is not 
fair to the patient. We are not getting a good bang for the 
buck, and how do we get to a value- or quality-based 
reimbursement system, that is going to be crucial.
    And, Ms. Safran, you were talking about the quality 
measurements that Massachusetts was just establishing, I think 
64 criteria so--that you are using right now. My question to 
you is who is establishing those quality measurements, and what 
type of buy-in have you gotten from the practicing physicians 
and the care providers in Massachusetts for that type of 
criteria?
    Ms. SAFRAN. So, that was my job, to establish which 
measures. And we really drew from nationally accepted measures 
wherever we possibly could, so that means NQF endorsed almost 
every single one of those 64 measures. We then put the measures 
through some additional paces to be sure that we think they are 
ready for the high-stakes use involved, meaning attaching 
dollars to payment on, you know, a score. And it was important 
to us that that measure set include inventory and hospital 
measures, and that in both of those settings that the measures 
include clinical process, clinical outcome and patient care 
experience measures. So that is how we have--and they have been 
completely accepted because of the rigor that we paid attention 
to in the measures that we chose.
    Mr. KIND. Because some of the concern, I think, many of us 
had or shared in regards to what Massachusetts was moving 
forward on, so you are doing coverage before cost. And now it 
seems like you are trying to play catch up with the cost issue 
right now. And we are trying to get out ahead of that ourselves 
with the Affordable Care Act to not fall into a similar type of 
box as we move forward.
    I know it is very unfair to ask it, you know, because 
volumes and books can be written on each topic, but if I can 
get just a quick response from you on a couple of key issues, I 
think it is important as we move forward.
    The role of comparative effectiveness research. Important 
or not, Mr. Guterman?
    Mr. GUTERMAN. I think comparative effectiveness research is 
key, because if we are going to spend the vast amount of 
resources that we spend on health care, and if we are going to 
address the issue of the massive amount of waste in the health 
care system, we need to know how to spend that money more 
wisely so that we can get a better return on it for our 
patients. And comparative effectiveness research is intended to 
provide information to help decisionmakers, the physician and 
the patient, make the decision for the appropriate care.
    Mr. KIND. Dr. Watkins.
    Dr. WATKINS. I completely agree with my colleague that it 
is absolutely essential. We have the opportunity, because of 
our involvement in the Multipayer Advanced Primary Care 
Practice Demo through CMS Center for Innovation, to actually 
work closely with our colleagues in other States and have a 
multi-State collaborative that is actually beyond those States 
involved.
    Mr. KIND. Ms. Safran.
    Ms. SAFRAN. No question that we need a better evidence base 
to guide us. Less than 3 percent of medical decisions are made 
every day--every minute of every day are based on solid 
evidence. Comparative effectiveness is absolutely one important 
way to do that. I think there are others, but we absolutely 
need a better evidence base.
    Mr. KIND. Dr. Wilson.
    Dr. WILSON. I would agree with all that has been said 
before me. Yes, comparative effectiveness would be good, and I 
agree also that too little medicine is done through evidence-
based medicine.
    Mr. KIND. Now, another big role that we had here, 
unfortunately, under the Affordable Care Act was talking about 
reimbursing providers in regards to counseling for advanced 
directives. Good idea, Mr. Guterman.
    Mr. GUTERMAN. When decisions get made about medical care, 
having that decision be made between the patient and the 
physician is always a good idea. And the more information 
people have in making those decisions, the better it is.
    Mr. KIND. May I get a written response from the rest of the 
witnesses because I see my time has expired? Thank you, Mr. 
Chairman, for your indulgence.
    Chairman HERGER. Thank you.
    The gentleman from Pennsylvania Mr. Gerlach is recognized 
for 5 minutes.
    Mr. GERLACH. Thank you, Mr. Chairman.
    Thank you for coming today and being part of the panel.
    Let me ask, Ms. Safran, in Massachusetts, a State that has 
undergone tort reform relative to medical liability and medical 
malpractice cases, and are there protections, medical 
malpractice protections, for physicians in Massachusetts, like, 
say, Texas and California, where there are caps on noneconomic 
losses in medical malpractice cases?
    Ms. SAFRAN. I apologize. That is a question that is out of 
my area of expertise. I would be glad to get the answer, 
though. I don't believe there has been significant tort reform 
in Massachusetts that has been discussed.
    Mr. GERLACH. Yes, I don't think so either, but I don't know 
exactly if that is the case. But that really is the premise for 
my question, because I am thinking in the AQC model that you 
have, what has been the impact of an AQC contract with a group 
of physicians relative to how they otherwise may be practicing 
defensive medicine if their tort liability may still be just as 
high as it might be, say, in New York, Pennsylvania, other 
States where there are no tort reforms to protect them against 
the medical liability cases? What have you seen as the 
difference between a physician practicing in Massachusetts who 
is not in an AQC arrangement versus one that is relative to the 
types of defensive medicine costs that they produce?
    Ms. SAFRAN. Well, the answer is that it is early right now 
to know, to notice or see really any differences in the 
patterns of use. And so I think if we were to look at the 
data--and we have a formal external evaluation by Harvard 
Medical School that is looking at the data to see how things 
are changing--they would find that for the most part, the 
savings in year 1 were based on choosing lower-cost settings 
where that could be done, not by doing the hard work of 
changing use.
    However, there is a lot that these practices are doing to 
start to try to understand the vast practice pattern variation 
that exists even within a group of physicians who practice 
together, caring for the same condition, how differently they 
care for that. And we are helping to fuel that with data that 
we provide on a very regular basis to highlight these 
differences and what we hope is promote physicians discussing 
with each other what best practice would look like, and to form 
that consensus and reduce that variation.
    Mr. GERLACH. Assuming the American Medical Association is 
accurate in its estimate that in any given year there is 
approximately 100- to $150 billion in defensive medicine costs 
that are incurred around our Nation each year, and you could 
probably extrapolate out from that overall figure how much of 
that is out of Massachusetts, is this Harvard study that is 
being undertaken, is it going to compare and contrast the 
national experience relative to defensive medicine costs with 
what is happening in Massachusetts both within an AQC setting 
and a non-AQC setting?
    Ms. SAFRAN. Yes. I don't know that they will bring in 
national data specifically, but they absolutely have 
information and will be studying over a long period of time to 
see how practice patterns change in the AQC compared with how 
things change or don't change outside of the AQC.
    Mr. GERLACH. I would like to yield the balance of my time 
to Dr. Price, if I may.
    Chairman HERGER. The gentleman yields to Dr. Price.
    Mr. PRICE. I thank the gentleman for his time, and I 
appreciate his question because I think it is an interesting 
line. I just want to say that all of us agree that the status 
quo is unacceptable. It is just where we go from here.
    I was curious about the response of the panel to the 
question about comparative effectiveness research and the 
overwhelming support for it. And I assume that would be the 
same for the Independent Payment Advisory Board. Mr. Guterman, 
you are wholly in favor of the Independent Payment Advisory 
Board?
    Mr. GUTERMAN. The notion of having a mechanism to translate 
the best policy ideas into focusing on Medicare programs to try 
to slow down cost growth is an interesting one. I think there 
are----
    Mr. PRICE. You support the IPAB?
    Mr. GUTERMAN. Do I support the IPAB?
    Mr. PRICE. Yes.
    Mr. GUTERMAN. I would like to see, frankly, the IPAB have 
broader powers because I suspect that a lot of the issues that 
they will have to deal with in terms of Medicare cost growth 
are driven by the same factors that----
    Mr. PRICE. Dr. Watkins, do you support the IPAB?
    Dr. WATKINS. I don't feel qualified to answer your 
question.
    Mr. PRICE. As a physician running a large entity, you don't 
feel qualified to answer whether or not the IPAB you support or 
not?
    Dr. WATKINS. I am sorry.
    Mr. PRICE. Ms. Safran, do you support the IPAB?
    Ms. SAFRAN. I apologize. I don't have enough information.
    Mr. PRICE. Dr. Wilson, might you have an opinion on the 
Independent Payment Advisory Board?
    Dr. WILSON. Unfortunately I am not adequately familiar with 
the expectations of that Board to render an intelligent 
response.
    Mr. PRICE. I thank you.
    Chairman HERGER. The gentleman's time has expired.
    The gentleman from New Jersey Mr. Pascrell is recognized 
for 5 minutes.
    Mr. PASCRELL. Thank you, Mr. Chairman. Thanks for having 
the hearing, and thanks to the panelists. Excellent.
    We are sitting here talking about changing the way we pay 
providers, and I have listened to my friend from Wisconsin over 
the last 3 years talking about containing costs enough times to 
not only believe him, but listening to the specifics of where 
he is coming from, and I think that is very, very important, 
containing costs.
    We might start, I think, maybe the four of you could agree 
with me on this, by having patients look at their bills, if we 
are talking about containing costs. Nobody knows what--
particularly if they are covered--what do I have to worry about 
what is in the bill? My insurance covers, the Lord covers me, 
whoever covers them. And you don't look at the specifics of 
what is in that bill. And I think that that is a very dangerous 
practice that we have gotten into.
    The first words out of the patient is usually, don't worry 
about it, I am covered. And what we should be concerned about 
of what that means in the minutiae of the bill, how much things 
cost.
    And so we are moving away. I think both sides agree that we 
need to move away from paying physicians for a specific 
service. Fee for service, I think, is a dog that is not hunting 
anymore, and we need to look for other models, and that is one 
of the many of the questions that have gone in that direction 
today.
    I have said many times health care reform is entitlement 
reform. I think it has already started. It will help us to 
transform this health system. One-third of the entire new 
Health Care Act is devoted to Medicare and Medicaid and how we 
can contain those costs. Some of the ideas being discussed were 
included in the Health Care Reform Act.
    I am interested if these ideas are what you support, what 
is contained in the Health Care Act? One proposal I think we do 
have some bipartisan agreement on is the issue of the IPAB, the 
Independent Payment Advisory Board. At least I have gathered 
that from your written testimony.
    I think this committee already has the knowledge, the 
experience and the jurisdiction to determine appropriate 
payments to providers as opposed to an independent body, and we 
may debate that. We may debate that. But I think that this 
group has done a pretty good job. If we can agree on this, I 
think we can find other areas of agreement in terms of provider 
payments.
    We are here to specifically focus on physician payments, 
and I hope we don't have to have another patch. I think the 
chairman shares my view. We have had enough patches over the 
last several years, and we need a permanent solution. It 
reduces the anxiety in terms of the doctor, and we need to 
reduce the anxiety in the patient. Of course, there is a lot of 
questions out there as to what is a guaranteed benefit, what is 
not a guaranteed benefit. We want to reduce anxiety in all 
parties.
    On our side we passed a permanent fix for Medicare 
physician payment in H.R. 3961. We did that in 2009. The other 
side of the building, of the Capitol, they are still trying to 
clean out the offices, I think. I don't know what they are 
doing over there.
    So I have a couple of questions. On physician shortages, 
workforce, we spent a lot of time on that when we put this 
legislation together. Many of you know in the health care 
reform bill that we did change and try to provide incentives to 
respond to the shortage of physicians, of primary physicians, 
and also nurses. A National Health Care Workforce Commission 
was established and associated grants to help States improve 
their efforts to promote an adequate health care workforce. We 
can't ignore the growing shortages. Here we are changing, 
reforming health care. Will we have enough folks to deliver the 
service? That is not a good idea.
    My question is for the witnesses. In Massachusetts, Vermont 
and California, can you tell me how your models affect 
workforce shortages, and do they create more stability in the 
system for physicians? Who would like to take the first crack 
at that? Doctor.
    Dr. WILSON. I will take it.
    In California, yes, we are very concerned about physician 
shortage, especially in the primary care ranks. We anticipate, 
if you look at the numbers, 45,000 physician shortage in the 
next decade by 2020.
    We think our model--and there has been probably as much 
experience, if not more, in using midlevels as teams of care 
and using physicians to coordinate that care. And so that is 
one of the ways we anticipate mitigating this problem.
    I still have anxiety because I think that looming physician 
shortage is going to be a challenge for the Nation and not just 
for California.
    Chairman HERGER. The gentleman's time is expired. Perhaps 
the witnesses could respond in writing to the question, please.
    Chairman HERGER. The gentleman from Georgia Dr. Price is 
recognized on his own time, 5 minutes.
    Mr. PRICE. Thank you, Mr. Chairman.
    Let me just first say that I am astounded at the lack of 
responsiveness to my question about the Independent Payment 
Advisory Board by three of the witnesses. This is a major, 
major undertaking by this Federal Government to impose upon 
physicians what they may or may not do for their payments, and 
to have three supposed experts, individuals who lead large 
physician groups and health care groups, not be able to opine 
for this country about their stance on the Independent Payment 
Advisory Board is amazing. It is astounding to me, absolutely 
astounding.
    So let me go to the other extreme. Do you believe that fee-
for-service medicine ought to outlawed? Stu.
    Mr. GUTERMAN. No. We ought to look for different ways of 
paying. There are different ways, in fact, of modifying fee-
for-service medicine so it serves the purpose better than 
unfettered fee-for-service medicine that typifies most of the 
health care system.
    Mr. PRICE. And you believe one can have a coordinated care 
system in a fee-for-service model?
    Mr. GUTERMAN. I think it is more difficult unless you get 
ahold of some of the incentives that fee-for-service medicine 
provides.
    Mr. PRICE. Dr. Watkins, do you believe that fee-for-service 
medicine ought to be outlawed?
    Dr. WATKINS. I do not.
    Mr. PRICE. That is encouraging.
    Dr. WATKINS. I believe that in our program we have actually 
already demonstrated that with fee for service unchanged, we 
have improved the quality of care delivered, the perception of 
care on the part of the patients, and the perception on the 
working conditions, if you will----
    Mr. PRICE. That is within the fee-for-service model right 
now.
    Dr. WATKINS. That is true.
    Mr. PRICE. Thank you.
    Do you believe, Mr. Safran, fee for service ought to be 
outlawed?
    Ms. SAFRAN. I believe that we have to move our system away 
from fee-for-service medicine for all the reasons that we have 
talked about this afternoon. Whether we have to do that through 
the use of law, or whether through a demonstration that we have 
a way to do it that works better and provides better quality 
and outcomes, I couldn't say. I would hope that we can reform 
the system and move to another model of payment without 
necessarily legislating away the fee for service.
    Mr. PRICE. I think we need to move to another model as 
well, but what I hear you talking about is coordinated care and 
whether or not one can have a payment model for physicians that 
appropriately compensates them for the wonderful work that they 
do, and whether or not that needs to be in the kind of model 
that you describe, I think, is really open to question.
    Do you believe that one patient ought to be able to visit a 
single physician and contract for that service individually 
between those two individuals? Should that be legal?
    Ms. SAFRAN. I want to understand better how that would look 
and, for example, is that a physician----
    Mr. PRICE. I walk into a doctor's office. I say, I am 
feeling a little ill, I would like to have you evaluate me, 
will you do that for--what is the charge--50 bucks, okay? Is 
that all right? Should that be legal?
    Ms. SAFRAN. That should be legal.
    Mr. PRICE. Thank you very much.
    Dr. Wilson, do you believe that fee-for-service medicine 
ought to be outlawed?
    Dr. WILSON. No, I do not. If I were just to refer to our 
California model, we use fee-for-service medicine as well as 
capitated and sub-capitated medicine, and I think the sort of 
the overlying important issue here is how is care coordinated, 
and how is it managed.
    Mr. PRICE. Exactly. And that may be completely different 
than the cost of it or how it is paid for, correct?
    Dr. WATKINS. Correct.
    Mr. PRICE. Mr. Chairman, I was struck yesterday by an 
article from the Associated Press entitled ``Obama Plan for 
Health Care Quality Dealt a Setback,'' which highlights 
accountable-care organizations, and in it the article states 
that at the Mayo Clinic, the administrator of the Mayo Clinic 
wrote that 90 percent of their members, physician members, 
would not participate because the rules as written were so 
onerous, it would be nearly impossible for them to succeed. And 
the American Medical Group Association went on to say that 
their members, including the Cleveland Clinic, Intermountain 
Utah, Geisinger Health Systems in Pennsylvania, et cetera, 
would find that significant change to be much more difficult to 
provide care. And I ask unanimous consent that that be included 
in the record.
    Chairman HERGER. Without objection.
    [The information follows: The Honorable Mr. Price]

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    Mr. PRICE. I would just caution this panel and this 
committee and this Congress that the SGR system was this 
Congress' solution to how to pay physicians a few short years 
ago, and it has run amok, clearly. It doesn't work. What we 
ought to take from that, I believe, is that solutions imposed 
from Washington often times result in terrible consequences for 
patients, which is where we are right now with this system.
    And I yield back.
    Chairman HERGER. The gentleman's time has expired.
    The gentleman from Oregon Mr. Blumenauer is recognized for 
5 minutes.
    Mr. BLUMENAUER. Thank you, Mr. Chairman, and I really do 
appreciate your bringing before us people who are on the front 
lines of trying to squeeze more value out of the system and 
give us different approaches in how that can be accomplished.
    Half of us on the committee come from regions of the 
country that are low cost, high value. If they practice 
medicine the way they do in Congressman Kind's district; my 
district in Portland, Oregon; Seattle; and some parts of the 
bay area, we wouldn't have a Medicare funding crisis. We would 
have better outcomes. People would live longer. They would get 
sick less often. They would get well faster. And you have 
described ways--and I do, Ms. Safran, at some point like to get 
information about your notion that only 3 percent of the 
medical decisions were based on objective evidence. I want to 
get that right.
    I do agree with my friend from Georgia, the mess we have 
got is imposed by Congress. And one of the reasons why some of 
us supported the IPAB and, in fact, wanted it stronger is 
because Congress has proven itself incapable of being able to 
make some of the really difficult decisions with this fix and 
that fix, and the SGR is a perfect example, which I didn't vote 
for, was wishing away outcomes.
    We are on a path now where much of what you have talked 
about we attempted to incorporate in the reform legislation. It 
would have been better, but we had a complete collapse in the 
Senate, and we couldn't legislate it, but we have got embedded 
some pilot projects and whatnot. The approach is in some 
instances repeal it and start over. Part of it is to trim back 
the bill. For example, there is some bipartisan interest in 
reining in what powers we have given to the IPAB because people 
are afraid it might work.
    Another alternative is to actually accelerate the reforms 
that were envisioned, demonstration projects. Things that you 
are doing now appear to me to have been part of what at least 
some of us wanted to see, hope will happen, and, in fact, can 
occur under the framework, but it was made more complicated 
because we didn't have a particularly functional legislative 
arena.
    But it is the law of the land now. There are elements in 
place. I would like to know from each of you the extent to 
which elements that are there in the reform legislation now can 
incorporate your experience, build upon it, and perhaps be 
strengthened by it.
    Maybe we can talk to the three practitioners here who are 
representing the systems.
    Dr. Watkins.
    Dr. WATKINS.I would be glad to speak to that. The Community 
Health Teams, our multidisciplinary, locally based care 
coordination teams are actually clearly outlined in the ACA in 
Section 3502. And we are very clear that that level of 
coordination is essential to providing quality care regardless 
of what the structure is, where the payment is being made, 
whether that is fee-for-service, if it is single payer. It 
doesn't matter on some level. The need to do quality 
improvement and to push that side of the equation is going to 
be uniform regardless.
    Mr. BLUMENAUER. Ms. Safran.
    Ms. SAFRAN. I think that the proposed regs have within them 
a working excellent framework that, in fact, bears a lot of 
resemblance to what I have described to you about the AQC. But 
fortunately, there is this comment period that hopefully can 
provide feedback to CMS and create the changes that will enable 
those who currently perceive that the risk/reward threshold is 
such that they would be concerned to participate to change that 
sum, because we have seen in our model that it is possible to 
do that, as we have talked about, and have very quick uptake in 
even a two-sided model such as the one that we have. So I am 
optimistic that we can get it right.
    Mr. BLUMENAUER. Thank you.
    Dr. Wilson.
    Dr. WILSON. I think the ACL model holds a ton of promise 
and opportunity, and I think it would be a great benefit to 
this country if it could be rolled out and adopted.
    I have some concerns, as I mentioned in my testimony, about 
with the funding of it, and I think many of the groups that 
have spoken in that letter share those concerns. I think those 
groups also agree with the intent of the ACL model and the 
benefit it would bring to the American people. And so I think 
if some things can be fixed, it still has an opportunity to 
succeed.
    Mr. BLUMENAUER. Thank you very much, Mr. Chairman.
    Chairman HERGER. Thank you.
    The gentleman's time has expired.
    The gentleman from Washington Mr. McDermott is recognized 
for 5 minutes.
    Mr. MCDERMOTT. Thank you, Mr. Chairman. Thank you for 
having this hearing and having these witnesses.
    I was reading the material here, and I am a physician, and 
I am a general practitioner, and I would like to join, okay? So 
look at me as a somebody walking into the door in Vermont and 
Massachusetts and California.
    I saw in the California stuff Monarch Health in Irvine 
covers all of Orange County, 2,500 physicians, 200,000 
patients, and that is about 80 patients per doc if you just 
sort of divide it by 2,500.
    Two questions. Do I have to bring patients in to your 
system to join it, or can I walk in the door and you will 
assign me a panel? That is the first question.
    And the second question is how am I going to be paid for my 
patients? Because I have this general practice of kids and 
people between 18 and 50 or 65, and then I have got some 
seniors. Will I be capitated on all of them about the same way, 
or what Medicare pays and what the commercials pay? Or how does 
this work is what I want to hear from being a physician. 
Because Dr. Price has raised all the questions. People 
understand fee-for-service: Patient comes in, you do something, 
you put out your hand, they give you money, that is it. How 
does yours work? Please, the three of you, tell me what would 
happen to me.
    Dr. WATKINS. We are dealing exclusively at this point with 
primary care.
    Mr. MCDERMOTT. Yes.
    Dr. WATKINS. So for our practices, when the practice goes 
through the process of being recognized nationally for its 
quality through the NCQA recognition process, once they get 
that recognition, a fixed dollar amount per patient per month--
--
    Mr. MCDERMOTT. How much?
    Dr. WATKINS. It varies. Somewhere between $1.29 to $2.39, I 
believe, per patient per month, for every patient attributed to 
that practice covered by one of the three major commercial 
insurers in Vermont, Vermont Medicaid and soon to be Medicare.
    Mr. MCDERMOTT. So it doesn't make any difference whether 
they are commercial or Medicaid or Medicare, I still get the 
same $1.29 or $1.39.
    Dr. WATKINS. That is exactly right, and it is a function of 
what kind of score they got on that rubric.
    Mr. MCDERMOTT. Do I have to bring my own patients, or will 
you set me up in a practice somewhere and say, go to that 
practice, they have got a bunch of extra patients?
    Dr. WATKINS. Yeah, I wish we had a whole bunch of doctors 
coming into the State that we could have that problem. We are 
actually dealing with currently existing practices, and they 
get enrolled through a process, a queue, if you will, that we 
are rolling out through the State.
    The fee-for-service schedule still exists, so the patients 
who are seen in that practice are being--generating income for 
the practice because of having their normal visits. But in 
addition, if those patients are attributed to the practice by 
the insurers, then they generate that income for the practice. 
So that is additional money.
    On top of that, a Community Health Team is established in 
that area, also paid for by the insurers as a shared resource. 
They each split it approximately 25 percent of the cost.
    Mr. MCDERMOTT. This social worker and a visiting nurse----
    Dr. WATKINS. Exactly. It is multidisciplinary team that is 
locally based in contrast to the remote disease management 
programs that the insurers also still have. But they really do 
one-on-one counseling and interventions, outreach, panel 
management----
    Mr. MCDERMOTT. Let me stop you because I want to hear what 
happens in Massachusetts.
    Ms. SAFRAN. The answer is that your day-to-day existence as 
a physician under an AQC model and how you would see patients, 
who you would know who to see, and how you would get paid for 
that would be largely the same. What would be--that is to say 
there is still--as in Vermont, there is still a fee-for-service 
payment schedule, we still have a fee schedule with you, you 
still bill for that service. However, you are now part of an 
organization that has assumed accountability for the total cost 
of care for your population. So even while you are going about 
your day-to-day business of taking care of patients in much the 
same way, you are having a new level of information and support 
from your practice, however that is defined, about how you are 
doing, about how you are doing on your quality measures, about 
which of your patients need things that they haven't gotten 
yet, about which of your patient have blood pressures that are 
out of control and you need to adjust their medicines, about 
how your overall level of use of lab tests and high-cost 
imaging compares with other PCPs who practice in the same 
hallways that you do.
    Mr. MCDERMOTT. How do I get paid?
    Ms. SAFRAN. You get paid by us, by Blue Cross. You get paid 
for the claims that you submit.
    Mr. MCDERMOTT. Exactly the way they are talking about in 
Vermont; that is, a certain amount each month for every patient 
I got enrolled.
    Ms. SAFRAN. Yes--no. Just paid for your claims. For the 
visits that you have generated, you are still getting paid for 
that; however, there is now accountability in your practice for 
whether you are at the end of the day spending too much, and 
the practice as a whole will have its own way of dealing with 
the individual clinicians. It is not proscribed by Blue Cross 
for how they address that.
    Primary care physicians under the AQC have gotten enormous 
increases in revenue because of the quality dollars that we 
have put on the table that these organizations feed right back 
to primary care, because that is who is generating those 
quality dollars.
    Chairman HERGER. The gentleman's time is expired.
    The gentleman from Louisiana Dr. Boustany----
    Mr. MCDERMOTT. Mr. Chairman, can I ask the gentleman from 
California to submit in writing--I would appreciate knowing how 
you do it in California.
    Chairman HERGER. Yes. And all of our members, if we have 
questions, should be--I would like to request to be able to 
submit our witnesses in writing, and that within a reasonable 
amount of time they be responded to.
    Chairman HERGER. With that, again, the gentleman from 
Louisiana Dr. Boustany is recognized for 5 minutes.
    Mr. BOUSTANY. Thank you, Mr. Chairman.
    I am a cardiac surgeon, and my father was a physician, so I 
know a little bit about physician behavior. And I was involved 
very much in attempts to put different groups together back in 
the 1990s, and also initiated a number of quality initiatives 
at the hospitals where I practiced that allowed us to achieve 
top 100 status for heart surgery.
    I am kind of concerned that these ACO regulations as we 
have seen them appear to be a little bit overly proscriptive 
and burdensome. And, Mr. Guterman, I would be curious to know 
your opinion. I know it is a first impression based on what has 
just come out, but could you give me your opinion on that?
    Mr. GUTERMAN. We have heard some feedback, as Mr. Price 
cited, that some folks are feeling that way. And we have called 
for CMS to work with the provider community to be able to come 
up with a set of rules that is viewed as reasonable from both 
sides.
    Unfortunately, we can pay however we want, but we still--in 
order to really achieve improvement in the health care system, 
we need to have both sides kind of build up enough thrust to 
escape the gravity of business as usual, and that applies both 
to the government and to the providers of health care.
    Mr. BOUSTANY. Thank you.
    Do you think gainsharing might be a useful way to 
incentivize more integration and coordination of care?
    Mr. GUTERMAN. Before I was with Commonwealth Fund, I was at 
the Centers for Medicaid and Medicare Services, and we did 
develop a gainsharing demonstration. We think it can be 
promising. As with any innovation in payment approach, it needs 
to be monitored so that the right incentives get transmitted, 
but it certainly could be a promising way as a tool to achieve 
the kind of efficiencies and effectiveness that you want to 
achieve.
    Mr. BOUSTANY. I have had conversations with CMS, and it is 
felt there that no further statutory authority is needed to 
proceed with a gainsharing demonstration or model. But I have 
concerns that if we were to do so, physicians in hospitals that 
might be willing to do this would want statutory protection, 
because based on some of my previous experiences with this, 
oftentimes lawyers will say, well, we think you can do this, 
but it hasn't been to court yet; we think it will pass muster.
    Do you think if we are going to move forward, we need 
further statutory protections to allow this sort of model to go 
forward?
    Mr. GUTERMAN. I don't think I have the expertise to answer 
that question definitively, but I do remember when I was at 
CMS, we ran into difficulties in the court in getting the first 
attempts at gainsharing demonstrations to be put into place.
    Mr. BOUSTANY. Thank you, sir.
    And one other question for the panel, I know you have had 
success with your models, capitation and so forth. It seems to 
me a lot of what has been focused on here has been the primary 
care piece to this. And you have to bring in the specialties, 
and then you have got specialties like cardiac surgery and 
liver transplantation. Do you have surgeons, all those 
surgeons, in your plan, and are they on some salary? How does 
that work?
    Dr. Wilson.
    Dr. WILSON. Sure. Cardiac surgeons, neurosurgeons, surgeons 
that typically require a larger population base to fill out 
their practice typically don't sign on as employee docs in 
practices of any reasonable size. And so typically those 
relationships exist in one of several contracted methodologies.
    For some of our network, and I am now going to refer to my 
network specifically, we have sub-capitated contracts with our 
thoracic surgeons. They take on responsibility for a population 
of patients and provide that care and have their own quality 
metrics, and then they are responsible to us, and we hold them 
accountable for the care that they provide and the 
responsiveness they have to their patients.
    We also conduct patient satisfaction surveys and look at 
their performances. And in other parts of the network, we may 
have case rates that define the cost of an episode of care 
based on whatever intervention is needed, and even still in 
some other parts of our network, we may have just a strictly 
fee-for-service arrangement. And all of the above.
    Mr. BOUSTANY. Is it the same thing in Vermont with the 
specialties, the surgical specialties, the procedure-based 
specialties?
    Dr. WATKINS. We are a very small State, as I am sure you 
are aware. Our total population is just over 600,000. There are 
only a few people that actually practice medicine at that 
level. There is one academic medical center in the State and 
one in neighboring New Hampshire. The Blueprint for Health has, 
as I said--and we are in our early days still focused 
exclusively on primary care, but we do have ongoing discussions 
around a much broader view of what payment reform means, 
obviously having to loop in specialists. So that is in the 
future.
    Mr. BOUSTANY. Thank you.
    I see my time has expired, Mr. Chairman.
    I think we probably need to look at how specialties are 
reimbursed. That is one of the big drivers of cost, and it is 
going to be different than what would apply to primary care. At 
least that is what my instinct tells me on this. So thank you.
    Chairman HERGER. And thank you. I believe that is something 
that the committee should be looking into as well.
    With that, I want to thank each of our witnesses for your 
testimony today. Your experiences with delivery models that 
have shown to improve care and reduce spending would be of 
great benefit as the subcommittee seeks to reform Medicare 
physician payments.
    Our work in this area has perhaps never been more 
important. As the Medicare Board of Trustees will report 
tomorrow, the current rate of growth in Medicare spending is 
unsustainable. The program will soon go bankrupt if changes are 
not made.
    There has been a vigorous debate over the future of 
Medicare in recent weeks. I, along with many of my colleagues 
on the Republican side, believe we ultimately need to bring 
competition and market forces into the Medicare program in 
order to reduce costs, which is in sharp contrast to the 
approach the President has proposed.
    Regardless of the outcome of the debate over Medicare's 
long-term future, we will continue to focus our efforts to 
finding the best way to fix the SGR.
    As a reminder, any Member wishing to submit a question for 
the record will have 14 days to do so. If any questions are 
submitted, I ask that our witnesses respond in a timely manner.
    [Whereupon, at 4:10 p.m., the subcommittee was adjourned.]
    [Submissions for the Record follow:]
                                  AARP

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                   American Chiropractic Association

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                     American College of Cardiology

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                    American College of Rheumatology

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                      American Geriatrics Society

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               American Occupational Therapy Association

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    American Physical Therapy Association, Private Practice Section

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                 American Physical Therapy Association

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                Association of American Medical Colleges

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      Coalition of State Medical and National Specialty Societies

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                             Garrison Bliss

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                                PTPNSGR

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