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





PROGRAMS THAT REWARD PHYSICIANS WHO DELIVER HIGH QUALITY AND EFFICIENT 
                                  CARE

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

                                HEARING

                               before the

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

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBRUARY 7, 2012

                               __________

                            SERIAL 112-HL07

                               __________

         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
DAVID G. REICHERT, Washington        EARL BLUMENAUER, Oregon
PETER J. ROSKAM, Illinois            BILL PASCRELL, JR., New Jersey
JIM GERLACH, Pennsylvania
TOM PRICE, Georgia
VERN BUCHANAN, Florida

                   Jennifer Safavian, Staff Director

                   Janice Mays, Minority Chief Cousel
















                            C O N T E N T S

                               __________

                                                                   Page

Advisory of February 7, 2012 announcing the hearing..............     2

                               WITNESSES

Lewis G. Sandy, MD, Senior Vice President, Clinical Advancement, 
  UnitedHealth Group.............................................     6
David Share, MD, MPH, Vice President, Value Partnerships, Blue 
  Cross Blue Shield Michigan (BCBSM).............................    21
Jack Lewin, MD, Chief Executive Officer, American College of 
  Cardiology.....................................................    38
John L. Bender, MD, President & CEO, Miramont Family Medicine....    67
Len Nichols, Director, Center for Health Policy Research and 
  Ethics.........................................................    77

 
                  PROGRAMS THAT REWARD PHYSICIANS WHO
                DELIVER HIGH QUALITY AND EFFICIENT CARE

                              ----------                              


                       TUESDAY, FEBRUARY 7, 2012

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

    The subcommittee met, pursuant to notice, at 10:01 a.m., in 
Room 1100, Longworth House Office Building, the Honorable Wally 
Herger [chairman of the subcommittee] presiding.
    [The advisory of the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                         SUBCOMMITTEE ON HEALTH

                                                CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE
February 7, 2012
112-HL07

                            Chairman Herger

 Announces Hearing on Programs that Reward Physicians Who Deliver High 
                       Quality and Efficient Care

    House Ways and Means Health Subcommittee Chairman Wally Herger (R-
CA) today announced that the Subcommittee on Health will hold a hearing 
to explore how private sector payers are rewarding physicians who 
deliver high quality and efficient care. With this hearing, the 
Subcommittee will continue to examine potential ways to reform 
Medicare's physician payment system. The Subcommittee will hear from 
witnesses who have developed, supported, and participated in quality 
and efficiency measurement programs. The hearing will take place on 
Tuesday, February 7, 2012, in 1100 Longworth House Office Building, 
beginning at 10:00 A.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:

      
    Medicare currently reimburses nearly every physician on a fee-for-
service (FFS) basis. While the physician fee schedule generally takes 
into account the work, time, and effort associated with each service, 
it does not account for the quality and efficiency of the care 
provided. Furthermore, the mechanism used to annually update the fee 
schedule--the Sustainable Growth Rate (SGR) formula--limits spending 
growth to growth in the economy but does not recognize value or 
quality. There is broad acknowledgement of the shortcomings of the 
current payment system, including the disruptive role of the SGR, and 
the growing importance of incentivizing patient-centered, high-quality, 
and outcomes-oriented care.
      
    In consultation with physicians, many private payers have developed 
programs to measure and reward the quality and efficiency of care 
provided. Some of these programs also recognize practice transformation 
activities. Preliminary results from these programs have shown 
reductions in unnecessary emergency room visits, surgical 
complications, and repeated procedures. Some physician organizations 
are also very active both in collecting data to enhance performance and 
in developing programs that recognize physician excellence. These 
organizations have encouraged widespread dissemination of clinical 
evidence, improved patient outcomes, and reduced unwarranted variations 
in care. Such physician-driven programs and activities may offer 
valuable lessons for reforming the Medicare physician payment system.
      
    In announcing the hearing, Chairman Herger stated, ``As we continue 
to seek a long-term solution to the Medicare physician payment system, 
this hearing will enable the Subcommittee to learn more about how 
programs developed by physicians and private payers are successfully 
rewarding quality and efficiency in care delivery while reducing 
complications and wasteful spending. The experience of those at the 
forefront of these innovative efforts will help the Subcommittee as it 
considers how to better reimburse physician services in Medicare.''

FOCUS OF THE HEARING:

      
    The hearing will focus on innovative quality and efficiency 
recognition and reward programs developed by physicians and private 
payers.

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 Tuesday, February 21, 2012. 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
      
    The subcommittee met, pursuant to notice, at 10:01 a.m., in Room 
1100, Longworth House Office Building, Hon. Wally Herger [chairman of 
the subcommittee] presiding.

                                 

    Chairman HERGER. The Subcommittee will come to order.
    We are meeting today to hear from individuals to have 
experience to share that will inform us as we continue our 
effort to reform Medicare payments to physicians. At our last 
hearing on this topic, we heard about different payment model 
options and efforts to test them in the private sector.
    This second hearing focuses on more incremental, private 
sector-driven approaches to reforming patients. We will hear 
shortly from private payers, a physician organization, and a 
practicing physician who are engaged in efforts that reward 
physicians who provide high-quality and efficient care to 
patients. A common theme will be how all of these key 
stakeholders are collaborating in private sector efforts to 
improve care while lowering the cost of providing it.
    All but one of our witnesses, even those representing 
health plans, are physicians who are leading efforts to achieve 
this shared goal. I fully expect you will find their stories 
compelling. Our Democrat colleagues have called an economist 
who talk about the need for collaboration but with the view 
that government, not those providing the care, should lead the 
way.
    Our end goal in all of this remains addressing the 
Sustainable Growth Rate formula through comprehensive physician 
payment reform done in a fiscally responsible manner. This past 
December, the House passed a bill that would have provided a 
two-year reprieve from SGR cuts. This would have provided the 
longest period of stability for Medicare physician payments in 
nearly a decade.
    It is worth noting that the last time that physicians knew 
what their payment updates would be for 24 months was when a 
Republican-led Congress enacted the Medicare Modernization Act 
in 2003. It would have also provided time to determine a 
payment reform policy that constitutes a true solution--it is 
important to remember that merely averting cuts is not a fix.
    The House bill would have facilitated the collection of 
information to assist in determining a sound policy 
prescription for paying physicians moving forward. The bill 
directed studies by the nonpartisan Medicare Payment Advisory 
Commission and the Government Accountability Office. It 
prompted this and other congressional committees with Medicare 
jurisdiction to consult with physician organizations. The focus 
of this information collection effort is, not coincidentally, 
the topic of today's hearing, how to reward physicians for 
providing quality, efficient care to beneficiaries.
    Unfortunately, the Democrat-controlled Senate continued its 
habit of providing patches a couple months at a time, which led 
us to our current situation, one that again sees us too close 
to an unsustainable physician payment cut. While I am concerned 
about my Northern California constituents and the other 
beneficiaries and physicians throughout the country, I trust 
that the Conference Committee will address this issue in a more 
responsible manner.
    In the meantime, this Committee is focusing on what it can 
do now to bring a permanent resolution to the SGR program. I am 
confident the experience that our witnesses will share today 
will assist us greatly as we continue down this path.
    Before I recognize Ranking Member Stark for the purpose of 
an opening statement, I ask unanimous consent that all Members' 
written statements be included in the record. Without 
objection, so ordered.
    I will now recognize Ranking Member Stark for five minutes 
for the purpose of his opening statement.
    Mr. STARK. Thank you, Mr. Chairman, for holding this 
hearing today to try and explore how the private sector payers 
are rewarding physicians who deliver high-quality and efficient 
care. This continues discussions we began, I guess, last May to 
review innovative delivery and payment system reform efforts.
    I agree with you, Mr. Chairman, that it is important to 
hear from the private sector. But I also would note that we are 
only three weeks away from a 27 percent cut in Medicare 
physician payments. We keep avoiding the topic of Sustainable 
Growth Rate formulas in favor of the easier conversations about 
delivery system reforms, around which we have much stronger 
agreement. If we don't fix Medicare's physician payment 
formula, we are going to lose the ability to collaborate with 
the private sector because the physicians will abandon 
Medicare.
    We all share the blame here. I would like to blame it all 
on the Republicans, but I can't. We are more than a decade away 
into the debacle known as SGR reform. We have known this hasn't 
worked for many years, but neither side has been able or 
willing to come together to enact a permanent solution. And the 
biggest reason is the cost.
    The way the formula was designed, we would have over $300 
billion to correct the formula. We have an opportunity. Members 
on both sides of the aisle and the capital are agreeing to--
more members are agreeing to the idea of using the war 
spending, overseas contingency operations, it is called, as a 
financing mechanism to pay off the SGR program.
    Without objection, I would like to make part of the record 
a letter signed by most of America's physician professional 
societies in support of this.
    **Information Not Provided**
    Chairman HERGER. Without objection.
    Mr. STARK. Thank you, Mr. Chairman.
    I am encouraged by this conversation and I am curious to 
hear from our witnesses today. And I think most of them will 
agree that SGR reform is the number one issue facing 
physicians. We have got to get this issue behind us, and then 
we will be able better to devote our attention to implementing 
reforms, as discussed at today's hearing.
    I would like to note also that to look at purely private 
sector efforts is not exactly the answer. Mr. Nichols, I think, 
will highlight the synergy between government initiatives to 
change payments to promote quality efficiency in their private 
sector counterparts.
    Though many of my more conservative colleagues are loath to 
hear this, the new health reform law is promoting public-
private initiatives to incentivize high-quality, efficient 
care. Examples like the Challenge grants through the new Center 
for Medicare and Medicaid Innovation, accountable care 
organizations, bundled payment initiates, are all public-
private partnerships, and they are moving ahead.
    Their impact goes beyond Medicare, and we are testing 
models we want to spread across payers. So I am excited about 
the synergy that we are seeing between the private sector and 
government, and I look forward to hearing from today's 
witnesses and hope we can discover new opportunities for 
collaboration.
    Thanks very much.
    Chairman HERGER. Thank you.
    Today we are joined by five witnesses, who are in the order 
they will testify: Dr. Lewis Sandy, who is the senior vice 
president of Clinical Advancement at UnitedHealth Group; Dr. 
David Share, who is vice president of Value Partnerships at 
Blue Cross Blue Shield in Michigan; Dr. Jack Lewin, who is the 
chief executive officer of the American College of Cardiology; 
Dr. John Bender, who is the president and CEO of the Miramont 
Family Medicine in Fort Collins, Colorado; and Mr. Len Nichols, 
who is a professor of Health Policy at George Mason University 
and the director of the Center for Health Policy Research and 
Ethics.
    You will each have five minutes to present your oral 
testimony. Your entire written statement will be made a part of 
the record.
    Dr. Sandy, you are now recognized for 5 minutes.

   STATEMENT OF LEWIS G. SANDY, M.D., SENIOR VICE PRESIDENT, 
CLINICAL ADVANCEMENT, UNITEDHEALTH GROUP, MINNETONKA, MINNESOTA

    Dr. SANDY. Thank you, Mr. Chairman. Mr. Chairman, Ranking 
Member, and Members of the Committee, my name is Dr. Lewis 
Sandy, and I am senior vice president for Clinical Advancement 
at UnitedHealth Group, a diversified health and well-being 
company based in Minnetonka, Minnesota. Our mission is to help 
people live healthier lives.
    I would like to highlight some of our innovative programs 
in transparent physician performance assessment, practice 
transformation through payment and delivery reform, and the 
importance of aligned incentives, all of which help the 
millions of Americans we serve. I thank you for the opportunity 
to testify this morning.
    Private sector innovations can be applied to the 
modernization of public programs such as Medicare. Medicare 
need not start from scratch nor go it alone. By working with 
and learning from private sector innovations, public programs 
can more rapidly be modernized to meet the needs of those they 
serve.
    For example, we are implementing a large-scale transparent 
performance assessment program that provides feedback to both 
physicians and to consumers, the UnitedHealth Premium 
Designation Program. Anyone inside health care knows there are 
differences in quality. Just ask a doctor or a nurse. But how 
are doctors to know how their practices compare? How are 
patients to know? And how can more information help both?
    The premium program uses the extensive data we have from 
claims and other administrative data sources and analyzes care 
patterns using sophisticated analytics. We evaluate physician 
performance on quality and efficient across 21 different areas, 
including primary care and specialties such as cardiology and 
orthopedics. Quality is measured first, and only those 
physicians who meet or exceed quality benchmarks are then 
evaluated for cost efficiency.
    The measures we use are based on national standards, and 
incorporate feedback and guidance from specialty societies and 
practicing physicians. We display the results in summary form 
on our consumer websites to inform their health care decisions, 
and we provide physicians we detailed information to support 
their quality improvement.
    This program includes now nearly 250,000 physicians in 41 
states, and through this program we know that quality and 
efficiency variations are significant and that they matter. 
Cardiologists, for example, who earn our quality designation 
have 55 percent fewer redo procedures and 55 percent lower 
complication rates for stent placement procedures. Orthopedic 
surgeons who earn a quality designation have 46 percent fewer 
redo procedures and a 62 percent lower complication rate for 
knee arthroscopy. And the overall incremental savings between a 
premium-designated quality and efficient physician and a non-
designated physician is 14 percent.
    This program demonstrates that large-scale, transparent 
performance assessment can be done today, and that the 
information helps physicians and patients. But we have also 
learned that information alone will not achieve transformation 
and higher levels of system performance.
    Thus we have also launched practice transformation programs 
and payment and delivery reforms, working again in 
collaboration with physicians and hospitals, that combine 
support for delivery system improvement with aligned 
incentives.
    We currently are piloting patient-centered medical home 
programs in 13 states, and we are developing 8 to 12 
accountable care organization projects this year across diverse 
communities that help care providers modernize the way they 
deliver care.
    These are promising payment and delivery reforms, but even 
these are not enough. Another key component is consumer 
empowerment and activity, coupled with aligned incentives. For 
example, we developed an incentive-based diabetes health plan 
to help patients with diabetes stay healthy and adhere to their 
physician's recommended care plan.
    Many lessons from our experiences can be applied to public 
programs.
    First, expert physician and specialist society 
collaboration is critical in developing appropriate measures 
for quality, efficiency, patient safety, and other dimensions 
of performance, and these measures in the measurement program 
must be fully transparent.
    Second, this information must be presented in actionable 
format and with aligned incentives. Information alone, while 
helpful, is unlikely to move the needle.
    Third, financial incentives must be significant and must 
come from savings achieved from ongoing improvements in 
delivery system efficiency.
    Fourth, new models of care, new roles in information 
technology support, are needed for true transformation. For 
example, embedded nurse care managers in our patient-centered 
medical home programs provide vital support for care 
transitions, patient education, and coordination.
    And fifth, programs such as value-based benefit designs can 
help people become more activated and involved in their own 
care.
    In conclusion, stakeholders must work together to develop 
an integrated, comprehensive approach to transform care 
delivery.
    Thank you for the opportunity to share our experience with 
the committee. I look forward to your questions and comments.
    [The prepared statement of Dr. Sandy follows:]
    


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Chairman HERGER. Thank you.
    Dr. Share, you are now recognized.

  STATEMENT OF DAVID SHARE, M.D., MPH, VICE PRESIDENT, VALUE 
PARTNERSHIPS, BLUE CROSS BLUE SHIELD MICHIGAN (BCBSM), DETROIT, 
                            MICHIGAN

    Dr. SHARE. Thank you, Chairman Herger, Congressman Stark, 
and Members of the Subcommittee for inviting me to participate 
in your discussion about private payers' efforts to improve 
provider performance.
    I am Dr. David Share, vice president of Value Partnerships 
at Blue Cross Blue Shield of Michigan, which is a nonprofit 
insurer with 4.3 million members. It is one of the 38 Blue 
Cross Blue Shield plans covering nearly 100 million people in 
every county and zip code in the country.
    Decades of private payer and government efforts have fallen 
short of ensuring that people have ready access to affordable, 
effective, high-quality care. In 2004, BCBSM wiped the slate 
clean and began a dialogue with physician leaders aimed at 
creating a common vision of a high-performing health system and 
an incentive program to help realize it.
    A key learning was that imposing solutions on providers is 
an extrinsic motivation, with providers putting half of their 
creative energy into doing an end run around new expectations 
and resisting meaningful change. In contrast, harnessing 
intrinsic motivation and professionalism inspires physicians to 
devote the full measure of their creative energy to 
transforming the systems they use and the results they achieve.
    In 2004, the Physician Group Incentive Program, or PGIP, 
arose out of these discussions based on communities of 
caregivers with shared responsibility for an identified 
population of patients, with the aim of enhancing community 
well-being and, in doing so, relying on shared information 
systems, shared care processes, and shared responsibility for 
outcomes at a population level, all guided by the patient-
centered medical home model.
    Other requirements for success including physicians forming 
organizations with effective leadership, administrative and 
technical support, tools to help in reengineering systems of 
care, and having both latitude and autonomy. Nearly 15,000 
physicians in PGIP serve 2 million Blue members and 5 million 
Michigan residents.
    The participants include about 6,000 primary care 
physicians in over 90 physician organizations comprised of over 
4,000 physician practices, and only two of these are integrated 
delivery systems, with the vast majority being one to four 
physician practices, most of those being in private practice. 
There are 780 patient-centered medical home-designated 
practices, with another 3,000 actively working to achieve that 
status.
    In response to an organized system of care program aimed at 
aligning and integrating primary care physicians, specialists, 
and facilities, 40 nascent organized systems of care have been 
established. In contrast, the 700 pages of the ACO regulations 
have inspired three prospective Michigan pioneer ACO 
applicants.
    A culture of cooperation has emerged. At quarterly 
meetings, 350 physician organization leaders discuss best 
practices and common challenges; and between meetings, regional 
learning collaboratives delve more deeply. These collaborative 
relationships and physician's leadership role have generated 
palpable enthusiasm and a full sense of ownership of the 
program and its goals across the state.
    We have transformed fee-for-service payment into a fee-for-
value approach, with all fee increases for primary care and 
specialty physicians now dependent on system transformation and 
population performance. I want to emphasize: Payment is a tool, 
not a solution. Without full engagement of physicians, a focus 
on community, and an explicit vision and purpose, any payment 
method will fall short and can be misused.
    Fee for service isn't the problem, and global payment isn't 
necessarily the solution. We have established an annual 
incentive pool of $110 million, which rewards physician 
organizations for modernizing systems of care and optimizing 
performance. There are over 30 distinct initiatives available 
to these physician organizations, which keeps them constantly 
modernizing at the edges of their individual current 
capabilities. The more ambitious they are, the more resources 
are made available to them.
    Physicians in the patient-centered medical home-designated 
can earn up to a 20 percent increase in office visit fees, 
focusing on relationship-based care, not procedures. Physicians 
also can receive additional fee-for-service payments for 
chronic illness care management services. And starting in 2012, 
hospitals' payment will be tie-barred to population-level 
performance, effectively aligning their incentives with those 
of physicians.
    Early results are compelling, with a 22 percent lower rate 
of admission for potentially avoidable conditions, 10 percent 
lower ER use, 8 percent lower radiology use, and overall, a 2.2 
percent total cost trend or increase for the Blue PPO products.
    The physician group incentive program, with its focus on 
partnership, system transformation, population management, and 
fee-for-service payment, has moved Michigan from procedure-
based care to relationship-based care and from volume to value.
    I appreciate your interest and attention, and look forward 
to the discussion. Thank you.
    [The prepared statement of Dr. Share follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Chairman HERGER. Thank you.
    Dr. Lewin is recognized.

    STATEMENT OF JACK LEWIN, M.D., CHIEF EXECUTIVE OFFICER, 
        AMERICAN COLLEGE OF CARDIOLOGY, WASHINGTON, D.C.

    Dr. LEWIN. Thank you, Chairman Herger and Ranking Member 
Stark and----
    Chairman HERGER. If you can hit your mike button, please.
    Dr. LEWIN. Oh, yes. Thank you. There we go. Thank you, 
Chairman Herger, Ranking Member Stark, and committee members. I 
am Dr. Jack Lewin, representing the American College of 
Cardiology, 40,000 cardiologists, advanced practice nurses, 
pharmacists, and other clinicians.
    Our purpose is to transform cardiovascular care and improve 
heart health, and we are doing that. In the last 10 years we 
have had a 30 percent reduction in morbidity and mortality 
across cardiovascular care in the United States. And the 
science in the pipeline is amazing. We are soon going to be 
replacing aortic valves without cracking the chest. We have got 
stem cell programs coming, miracle drugs in the pipeline. But 
the costs are out of control.
    For 30 years, with the American Heart Association, the ACC 
has been developing guidelines and performance measures to 
bring better science to the point of care. Recently we have 
developed appropriate use criteria, new tools for diagnostic 
imaging, and for procedures that actually improve quality and 
lower cost at the same time.
    This isn't cookbook medicine. Clinical judgment is still 
important. But getting science to the point of care more 
effectively improves quality and improves care for patients, 
and lowers costs. That is what is important. And physicians 
need to lead these processes.
    Now, how does it work? Well, the clinical tools we have 
developed that actually bring science to the point of care 
include the national cardiovascular data registries. These are 
six hospital registries and one called Pinnacle, which is an 
outpatient register. Together, we have 20 million patient 
records, and we are providing outcomes results to hospitals and 
doctors all across America in cardiovascular care. And it is 
making a difference.
    We have also developed a tool called FOCUS, which helps at 
the point of care--and it can be a mobile app--that helps 
choose the right image among a bewildering array of new 
technologies in these regards that can get the right test the 
first time and save significant dollars.
    So going forward, we need payment reforms, with incentives, 
linked to these kinds of tools to make the kind of changes 
needed. In the testimony, you will see that in Wisconsin, we 
have a program called Safe Care, applying all these tools 
across a large number of medical groups and hospitals to really 
achieve some of these results. A similar program is going to 
happen in Florida under Safe Care.
    We have got a clinical decision support system using the 
FOCUS tool to improve the appropriateness of imaging that is 
now across the entire State of Delaware. Very exciting. And the 
Cardiovascular Performance Improvement Program, where we work 
with some of the insurance partners here like United, Blue 
Cross Blue Shield of Michigan, and others, actually rewards 
doctors for better outcomes and better performance. So we are 
moving in the right direction.
    Is there any evidence that this can work, that these kinds 
of things actually reduce cost and improve quality? Let me tell 
you about the Door to Balloon Program. This is a program to 
speed up the treatment of heart attack, ``Door'' being the door 
to the emergency room, ``Balloon'' being angioplasty and stents 
to relieve the obstructed coronary artery in a serious kind of 
heart attack called a STEMI.
    Using an educational program and our data in the United 
States, we have taken the time it took to treat a heart attack, 
averaging over two hours, down to what science tells us is 
necessary, under 90 minutes, or even better, under 60 minutes. 
Now, three years later, using this Door to Balloon Program, 
more than 90 percent of U.S. hospitals are under 90 minutes and 
half are under 60 minutes.
    Here is the point. We have reduced the length of stay from 
five to three days, on average. We have reduced the cost by 30 
percent. This is over 4- to $5 billion a year. This is 
important.
    So we have even talked about a big idea of actually putting 
a challenge out to hospitals and cardiologists across the 
country to say, if you can reduce Medicare costs by 10 percent 
over 10 years--by the way, that would be about $300 billion--
why don't we split the difference between the hospitals, 
doctors, and Medicare so that people can build these systems 
and make this happen. Imagine that kind of a win/win/win for 
patients and for doctors.
    The conclusion for me would be to say that providing 
physicians and other health care providers with data on their 
performance and tools to improve their performance is going to 
improve quality and lower costs. To do this, to get it done, 
Medicare and private payers have got to encourage new 
incentives through the development of widespread use of 
clinical data registries that allow tracking and improvement of 
care systemically, along with payment reforms and incentives. 
Put those two together and we are going to see costs go down, 
quality go up. And we have got examples of it today.
    Thanks for the opportunity to speak about several of these 
exciting improvement collaborations underway in cardiology, and 
we look forward to working with you to help solve America's 
problems in health care costs at the same time we improve 
patient care quality. Thank you.
    [The prepared statement of Dr. Lewin follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Chairman HERGER. Thank you.
    Dr. Bender is recognized for five minutes.

STATEMENT OF JOHN L. BENDER, M.D., PRESIDENT AND CEO, MIRAMONT 
            FAMILY MEDICINE, FORT COLLINS, COLORADO

    Dr. BENDER. Thank you, Chairman Herger and distinguished 
Members of the Subcommittee on Health. I am Dr. John Bender. I 
am a family physician in Fort Collins, Colorado, and I am CEO 
of Miramont Family Medicine, which is a network of patient-
centered medical homes.
    Now, in 2002, my wife Therese and I moved back to Larimer 
County, where we were from, and we purchased one of the oldest 
practices in Fort Collins, Colorado. They had been there for 
over 40 years, and were basically doing things the same as they 
had in the 1970s. They left me one computer and one employee. 
That was 10 years ago.
    Today we have over 50 employees, 14 providers, including 8 
physicians; we have over 80 computers and a centralized data 
center, serving four different parts of our state. And we have 
about 27,000 patients.
    Now, during this same period of time in Larimer County, 34 
primary care physicians closed their doors or stopped providing 
primary care services. Eight of these were actual bankruptcies. 
And yet at the same time, we saw a doubling in the number of 
emergency room beds and an increase by the number of emergency 
room physicians by 50 percent, suggesting that if patients 
didn't have a patient-centered medical home like myself, they 
were going to the emergency room at a later stage of their 
illness for a higher cost, increasing health care premiums for 
everyone across the state.
    Now, how is it that Miramont was able to double in size, 
grow at 34 percent per year to the size that we achieved, in 
this economy while other family physicians were saying, I give 
up, and walking away? Well, part of it was, in 2007, we made 
the conscious decision that we were no longer going to just 
focus on volume.
    We were going to make sure that we had a high-quality 
product that was safe and efficient, and believed that if we 
built the best product in the marketplace, that consumers would 
vote with their feet and we would be able to maintain our 
solvency--because, after all, I didn't want to be the 35th 
practice to close or the ninth physician to bankrupt.
    So we pursued NCQA patient-centered medical home 
recognition. That is the National Committee of Quality 
Assurance. We achieved level 3, which is the highest level of 
patient-centered medical home. It basically meant that we, 
after a six-month audit period, were able to show improvements 
in our work flow and the way we retooled things so that we 
could deliver team-approached care.
    We also had, for example, a patient portal, where patients 
could go online, look up their labs, see their clinic record. 
They could send me a HIPAA-compliant email, or they could 
schedule appointments. And we also conducted care coordination 
through the transitions of care, as people went from hospitals 
to nursing homes, et cetera.
    Our next big break came in 2008 with the multi-payer 
patient-centered medical home pilot. This was the brainchild of 
Dr. Paul Grundy and others at IBM, who had compelled the top 
payers in the United States, WellPoint, UnitedHealth Group, 
CIGNA, Aetna, and Humana, to test the patient-centered medical 
home model. It was based on some of the beliefs and work that 
Dr. Barbara Starfield had published 10 years earlier, 
suggesting that if we put an emphasis on primary care, we could 
bend the health cost curve.
    So 17 pilots were selected. Miramont was one of them. It 
was convened under a group called the Health TeamWorks, and it 
was basically an alliance of payers, including insurers, 
employers, and physicians. We agreed on the quality metrics 
that we were going to track to show improvement on, and we also 
agreed on a three-tiered payment system based on fee-for-
service, per-member-per-month fees, and pay for performance.
    Now, fee-for-service was included, and I will tell you why. 
There was an understanding that volumes in primary care were 
actually too low, and if we were going to pull people out of 
emergency rooms and urgent care and other high-cost centers, we 
would have to incentivize primary care physicians in order to 
help them to build the capacity to see the increased volumes.
    Per-member-per-month fees ensured that I was able to 
provide what was other non-revenue-generating activity such as 
having a diabetic nurse educator in-house, or a psychologist, 
and doing care coordination.
    Then finally, pay-for-performance bonuses made certain that 
we just didn't report our metrics to a centralized data 
registry, but we were actually working to try to reach certain 
target goals to help improve our delivery of evidence-based 
medicine.
    The results are in, and they are fabulous. UnitedHealth 
Group has told us that Miramont reduced hospital readmission 
rates by 83 percent compared with our peers. A year ago, the 
State Medicaid program joined the pilot, and they said that we 
have an ER utilization rate that is a negative 219 percent--
negative 219 percent--compared with our peers.
    So I call on the Subcommittee on Health of the Ways and 
Means Committee of the House of Representatives to compel the 
Department of Health and Human Services to immediately deploy 
the patient-centered medical home payment standard nationally 
in order to conserve the strength of the primary care 
workforce, in order to increase the quality of health care 
delivered to entitlement beneficiaries, and to also reverse the 
escalating costs that are burdening the American taxpayer by 
using a payment method, a payment standard, that has been 
proven and is now being adopted in the private sector.
    Thank you.
    [The prepared statement of Dr. Bender follows:]


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    Chairman HERGER. Thank you.
    Mr. Nichols is recognized for five minutes.

STATEMENT OF LEN M. NICHOLS, DIRECTOR, CENTER FOR HEALTH POLICY 
             RESEARCH AND ETHICS, FAIRFAX, VIRGINIA

    Mr. NICHOLS. Thank you, Chairman Herger. Thank you, Ranking 
Member Stark, and other Members of the Committee and 
subcommittee. I am honored to offer my thoughts on incentive 
realignment today.
    My name is Len Nichols. I am a health economist. I direct 
the Center for Health Policy Research and Ethics at George 
Mason University. I am also the editor-in-chief of a new online 
journal, the Community on Payment Innovation, jointly sponsored 
by the ACC and the American Journal of Managed Care, which, by 
the way, has already published a report by colleagues of Dr. 
Share on his innovative PGIP program. I am on the board of the 
NCQA, which devised the patient-centered medical home criteria 
Dr. Bender just spoke about. And I was recently selected as the 
innovation advisor to CMS.
    But I do want to make crystal clear at the outset my 
written testimony and spoken views are mine and mine alone. I 
do not speak for any organization, public or private, nor for 
any other person, living or dead.
    Let me start with some good news. Health care stakeholders 
around the country get it, and they are responding to the 
incentive realignment signals now embedded in the Affordable 
Care Act. They are devising private initiatives, some of which 
you have just heard about; but even more importantly, they are 
devising public-private partnerships that are our best hope for 
improving health, improving care, and lowering costs for all of 
us over time.
    It seems to me we face two broad alternative pathways to 
achieve our goals. One path entails severely reducing coverage, 
eligibility, and prices paid in public programs, or even 
eliminating them altogether. In other words, we could cut our 
way to fiscal balance, and in so doing, reduce access to care 
for millions of Americans. I fear this pathway would likely 
fail, for the ensuing cost shift to the private sector would 
drive up premiums and cost us yet more high-wage jobs in a 
never-ending cycle of decline.
    Alternatively, we could align incentives so thoroughly that 
we actually link the self-interest of clinicians with our 
common interest in cost growth reduction and quality 
improvement while covering all Americans. This is by far the 
most humane way to our shared objective. Quite simply, we need 
value-based payment systems where value has three dimensions: 
clinical quality, patient experience, and efficiency.
    I will emphasize three points. Number one: While fee-for-
service is part of the problem, in the real world fee-for-
service is also ubiquitous and therefore it cannot be 
jettisoned overnight. We must develop transition business 
models to enable clinician groups to move from fee-for-service 
alone to more sustainable incentive structures without going 
bankrupt.
    Point number two: The ACA has signaled to the country that 
business as usual is over, and business as usual is over 
because we can't afford it. Every one of the initiatives you 
have heard about today and that Karen Ignagni of AHIP reported 
on a fascinating conference in October, referenced in my 
written statement. Patient-centered medical homes, bundling, 
accountable care organizations, or organized systems of care in 
Dr. Share's terminology, all have a conceptual counterpart in 
the ACA.
    The growing private sector interest in care innovation 
emerging from the CMMI is the proof that ideas and efforts in 
the public and private sector are converging, which is 
extremely good news because every single clinician I have ever 
met, and I am old enough to have met quite a few, wants one set 
of incentives, one set of quality metrics from payers, one set 
of patient acuity adjusters, rather than the Byzantine plethora 
they labor under today.
    Number three: Neither private nor public sector payers can 
do this by themselves. Private payers sometimes need public 
payers to help with local provider market power, and as Dr. 
Sandy said, public payers can benefit from adopting the supple 
nuance with which private payers tailor incentives for 
different marketplaces.
    I will close with three observations that I think are 
relevant. As an editor-in-chief focused on payment innovation, 
I have learned that many practicing physicians are skeptical of 
new payment models that don't have quality or patient acuity 
components.
    Second, as an informal advisor to three different 
applications to the recent Innovation Challenge grant 
initiative from CMMI, I saw the immense value of having a 
vision of a community health system. In each case, leadership 
originated in a different place--a consumer-oriented health 
system agency in one case, a local nonprofit health plan with a 
history of collaboration in another, a forward-thinking single 
specialty group armed with data and a commitment to quality.
    But in each case, local employers, hospitals, plans, and of 
course, other clinicians and community voices we recruited, in 
two cases including the state Medicaid program, until by the 
end only Medicare had not yet joined these promising local 
incentive arrangements that are squarely aimed at a sustainable 
version of the three-part aim. The point of the applications 
and this initiative is to entice Medicare to join the party 
that the private sector devises, and others like it.
    Finally, as a participant in CMMI's new Innovation Advisors 
program, I recently spent two and a half days in a hotel near 
Baltimore with 72 of my new best friends. CMMI hopes to deepen 
our skills in innovation and quality improvement while we bring 
them new ideas from the real world outside the Beltway. But the 
best part of this was in seeing the energy and talent from 
across the country that is now committed to achieving the 
three-part aim in a wide array of institutions and settings.
    I would suggest to you that the Innovation Advisors program 
is proof that there is now broad recognition that top-down 
payment and delivery changes will not work, that frontline 
clinicians and managers and nurses and plans and patients all 
have to work out the details that will work for them where they 
live and work, and that we all need all the tools we can 
muster, from the public sector, the private sector, the recent 
reform law, and the God we worship in our own ways, to get this 
done in time for our health care system and our country.
    Thank you very much.
    [The prepared statement of Mr. Nichols follows:]


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    Chairman HERGER. Thank you.
    Dr. Sandy, I understand that your company's network 
includes approximately 650,000 physicians, a number nearly 
equal to the number of doctors who participate in Medicare. As 
your quality and efficiency program touches many of these 
physicians, and considering that other private payers have 
similar programs, would you say that a good number of Medicare 
participating physicians have exposure to a program such as 
yours?
    Dr. SANDY. Well, thank you, Mr. Chairman. We do have close 
to 650,000 physicians and other health care professionals, 
including nurses, chiropractors, mental health workers, and so 
on in our broad network across the country. The premium program 
that I mentioned in my testimony encompasses, at current scale 
and scope, close to 250,000 physicians across 21 different 
specialty areas of medicine.
    So given that scope, I don't know the exact answer, but I 
would venture to say that the vast majority of those 
physicians, aside from those that don't typically take care of 
Medicare patients such as pediatricians, have had exposure to 
our program and probably similar programs by others in the 
private sector, and those physicians also take care of Medicare 
beneficiaries.
    Chairman HERGER. Thank you.
    Dr. Share, the number of Michigan physicians participating 
in your program is very impressive, and that they group 
together in the physician organization is an interesting 
feature. As someone who represents a very rural district in 
Northern California, I know it has always been a difficult 
challenge to develop integrated delivery systems in rural 
areas. Can you describe the level of physician participation in 
the rural or more remote parts of Michigan as well as the size 
of organizations in those areas?
    Dr. SHARE. Certainly. The incentive program that we have is 
intentionally designed to be inclusive of both sophisticated, 
vertically integrated delivery systems and small one- and two-
physician practices, and also to get all of them, regardless of 
their size and structure, to come together collectively to 
share responsibility for a population in common.
    So there are physician organizations in nearly every county 
in the state, and there are many, many rural physicians who are 
involved in these physician organizations. Some of them, 
interestingly, have come together under an umbrella 
organization run by the state medical society that provides 
comprehensive administrative and technical structure to support 
the smaller practices who join in confederations of private 
practices, one? and two-person doctor offices, so that they 
don't have to create the analytic infrastructure and the 
information systems all by themselves.
    This has empowered them to be full partners in this 
program, equally engaged, equally exciting. There are 
individual physicians in one-person offices who have stunning 
stories to tell about how they have transformed their practice, 
including way up in the upper reaches, far reaches of the Upper 
Peninsula.
    So I think this program has touched nearly every community 
and every type of practice, including rural practices, 
absolutely.
    Chairman HERGER. Thank you. That is exciting.
    Dr. Bender, your story of transformation is remarkable. You 
note that your practice made these investments without regard 
to health care overhaul and without regard to SGR because these 
were things you couldn't control. You also note that it would 
take other small practices two years or less to complete such 
transformation.
    What advice would you offer to other physicians who 
struggle to make major practice changes, given the constant 
pressure placed on them by the reimbursement system?
    Dr. BENDER. Well, thank you, Chairman Herger. They need two 
things, leadership and courage. Leadership means, to get 
involved in a patient-centered medical home, they have to tell 
their staff, hey, we are going to do this. They have to believe 
in it. The group has to eat, sleep, and drink the model.
    This requires delegation. I couldn't have done this without 
the superior HR structure that we have at Miramont, with 
excellent employees who are committed to this process. Because 
it is brain damage. It is very difficult to go through change. 
People hate change, but they love progress, and to get to the 
point where we are excited about what is new at Miramont as 
opposed to, my goodness, we are doing thing differently.
    The other part, courage: Physicians are scared. They don't 
know what is going to happen with the health care overhaul. 
They are worried about regulations, malpractice, et cetera, et 
cetera, SGR threats. And really what I tell them is, the 
opposite of careless is not always--or, I am sorry, the 
opposite of cautious is not always careless, but sometimes the 
opposite of cautious is courage.
    Are they choosing not to do it just because they think that 
it is going to be careless? Or are they choosing not to do it 
because they are afraid?
    Chairman HERGER. Thank you.
    Mr. Stark is recognized.
    Mr. STARK. Thank you, Mr. Chairman. I thank the witnesses 
for participating with us today.
    Mr. Nichols, you talked about why public and private payers 
must work together to align incentives. So while this hearing 
has been informative, it seems to me that the focus just on 
private sector initiatives misses a larger picture. Could you 
talk some more about the need to combine the public and private 
sectors to see if we can get those stars in alignment?
    Mr. NICHOLS. Be glad to, Congressman Stark. Basically, the 
simple reason they have to cooperate is because most clinicians 
treat all kinds of patients. And it turns out in lots of 
specialty cases and in some locales, a majority of a 
clinician's patients might be public, so they are the biggest 
market share. They are typically the biggest market share for 
hospitals, and they are often also so for specialists, 
including cardiology, I might point out.
    So if you don't get the sectors aligned, if you don't get 
the incentives aligned, clinicians are going to be both 
confused and, as Dr. Bender might say, unhappy about it. And so 
the best way to transform patient care is to get them aligned.
    That does not mean they all have to pay the exact same 
level. I certainly believe in the private enterprise system. I 
certainly believe in competition. But I also think it makes 
sense for the clinicians to face the very same set of 
incentives, the very same set of feedback loops, the very same 
set of metrics.
    The very idea that United would have one set of metrics and 
Aetna a different one and CIGNA a third and Medicare a fourth 
and Medicaid and yada yada yada--by the end of the day, what is 
the clinician going to do? What they think is best independent 
of what they are being paid by.
    So the smartest thing to do is to get the incentives 
aligned. Now, there are lots of reasons that is difficult to 
do, but there are about 300 million reasons it is a good idea 
to do as soon as possible.
    Mr. STARK. Thank you. Also, it is my understanding that we 
are probably the only industrialized nation that does not use a 
comparative effectiveness measure. And I hasten to point out 
that all the comparative effectiveness programs, whether they 
are for pharmaceuticals or medical procedures, don't include 
cost. And of course, there is this--for some reason; I think it 
is mostly political fodder, but people are suggesting that 
using comparative effectiveness would lead to rationing.
    I wondered, both Dr. Sandy and Dr. Share, what is your 
reaction to that? Comparative effectiveness, if you had that 
available to you across the board--some professions or 
segments, thoracic surgeons, for instance, have done their own. 
For about five or seven years, they have collected data on 
every procedure that every member of the club or college, 
whatever you call it, has provided to a patient, and the 
outcome, and they have tracked the patients. But that is a 
small group in the firmament of medical providers.
    What do you think about the rationing issue?
    Dr. SANDY. Well, thank you, Congressman Stark. The comment 
I would say around comparative effectiveness research is, it is 
absolutely essential that there be investments in understanding 
of the differences in clinical effectiveness between different 
treatments so that physicians can have the best science and 
information to help inform the choices in their care, and that 
patients then can have that information as well so that they 
can make their informed choices.
    I think what I really would underscore and echo and support 
is the phrase that Dr. Lewin laid out. He used the term 
bringing science to the point of care, and I would strongly 
support that. And I think organizations such as the American 
College of Cardiology, the Society for Thoracic Surgery that 
you mentioned, these medical specialty societies are really at 
the forefront of doing that.
    One of the things that in my opinion would be helpful is 
that these societies are at the forefront, but there are other 
societies that would like to move in this direction to develop 
detailed clinical registry information, to help inform the 
physicians that are part of that specialty area to collect that 
information. That has been a challenge.
    It is gratifying--there is a fledgling effort, by the way, 
called the NQRN, the National Quality Registry Network, a 
multi-stakeholder coalition, to advance this frontier. And we 
think that would be a very important development to support.
    Mr. STARK. If I may just have another second, Mr. Chairman, 
wouldn't the requirement for keeping electronic records, which 
now everybody is supposed to do, help toward building this 
comparative effectiveness study?
    Dr. SANDY. Well, again, one of the things that your 
question points out is the issue of the challenges of 
administrative simplification and the fact that many physicians 
do not have electronic health records. While electronic health 
records sometimes aren't architected to collect detailed 
information, it is an important start to help promote that kind 
of data collection for the purposes that I have outlined.
    Mr. STARK. Thank you.
    Dr. SHARE. Mr. Chairman, could I just add a brief note in 
response to Mr. Stark's question?
    Chairman HERGER. Very quickly.
    Dr. SHARE. Yes. So we have actually embarked on a very 
ambitious approach to empowering the provider community, in the 
spirit of our partnership approach, with the workings of 
comparative effectiveness research, putting them into the hands 
of the provider community.
    We have 17 distinct hospital-based, multi-institutional, 
data registry-driven, collaborative quality improvement 
programs that have dramatically decreased the rate of mortality 
and morbidity, and saved money while doing so. And we are now 
in the process of linking claims data to the quality data 
across the state to empower CFOs, CEOs, and physician leaders 
to use that integrated data set to improve value in hospital 
care.
    Mr. STARK. Thank you.
    Chairman HERGER. Mr. Johnson is recognized for five 
minutes.
    Mr. JOHNSON. Thank you, Mr. Chairman.
    Dr. Share, it is interesting to learn the improvements you 
are making in Michigan. Do you ever talk to Blue Cross in 
Dallas?
    Dr. SHARE. Do we talk to Blue Cross in Dallas? We talk to 
the Health Care Service Corporation, which I believe is a 
nonprofit. It is a Blue licensee, so it is a Blue plan. And it 
is multi-state. It is in Texas, Illinois, and I am not sure 
where else.
    We have talked to them a good bit about this collaborative 
quality improvement approach using comparative effectiveness 
research in daily practice across an entire state, and they are 
beginning to adopt that model. We haven't talked to them about 
our physician group incentive program yet.
    Mr. JOHNSON. So the Blues aren't united across the country?
    Dr. SHARE. The Blues are united across the country in terms 
of having really rich relationships at the local and regional 
level with the provider community, and each developing payment 
transformation and practice transformation approaches that fit 
the needs and the circumstances of those communities. And we 
share experience and knowledge about what works across the Blue 
association.
    We are now actually working towards developing a set of 
tiered incentive programs, tiered in the sense of benefits 
being--the out-of-pocket costs for members being lower if you 
are using a medical home doctor, for example, to try and bring 
our approaches into more alignment while still respecting local 
circumstances.
    Mr. JOHNSON. And what are your ideas? Do you all have some 
innovations that you are trying to share with Medicare?
    Dr. SHARE. We are actually partnering with Medicare in the 
context of the advanced medical home demonstration project. And 
in keeping with Mr. Nichols' comments, we have aligned 
incentives where we have 480 of our patient-centered medical 
home-designated practices involved in an incentive program that 
includes Medicare and Medicaid funding as well as Blue Cross 
funding.
    It has actually significantly enhanced the focus on a 
common set of quality measures, a common set of efficiency 
measures, and a common approach to care management across all 
of these 480 practices. So working with CMS in this way, 
bringing them into our regional innovative approach, has 
amplified what we are able to do.
    As an example, though, of how sometimes CMS has a bit of a 
hard time fully embracing and trusting a local or regional 
effort, one of our approaches is to provide the incentive 
payments to the physician organization, as I mentioned, for 
their collective success at achieving value for a population of 
patients. The physician organization can then invest the money 
in better care management systems, information systems, et 
cetera. CMS has required that its incentive money must be paid 
80 percent to the individual medical home practices. That makes 
it harder for them to band together and create common systems 
with aggregated resources.
    So tremendous opportunities to partner with CMS. More 
opportunity, I think, to do so in ways that aren't 
constraining, that free the local community to do its best.
    Mr. JOHNSON. Yes. But what I am hearing you saying is CMS 
isn't listening to you.
    Dr. SHARE. No, they listen. They are an active partner, and 
they are trying to think through the best way to do it also. 
And as a partner, they naturally have an instinct to say, well, 
we really think it will be best if we tested an incentive 
models, where the doctors get reimbursement or an incentive 
payment made directly to them. So that is important to us. We 
didn't come to yes on exactly how approach that.
    Mr. JOHNSON. Thank you.
    Dr. Lewin, you know, as we explore new systems for Medicare 
physician payment, in your experience what are some of the key 
points we need to keep in mind? And what does Congress need to 
do to apply these programs to Medicare?
    Dr. LEWIN. Well, the faster Congress really moves forward 
with payment incentives, I think we will see progress. We know 
that we have to be able to measure our way to success, so we do 
need registries. And registries work with electronic health 
records.
    So you have the electronic health record; a registry tracks 
a whole set of conditions and gives feedback to the hospitals 
and the doctors in terms of how they are doing so that they can 
begin to compete with themselves and with their peers on 
producing better and better results. Ultimately that is going 
to get reported back to consumers so that people will be able 
to choose where they get their health care based on improved 
outcomes.
    The extent to which Medicare can move more swiftly to 
payment reforms, I think we would see progress there. I love 
the CMMI grant program, but we will probably take three years 
or four years before we can see the results of those programs 
and apply them. Meanwhile, our deficit keeps increasing as a 
nation.
    I would hope that we would begin to do some national 
demonstration projects coming right up in 2013 that would split 
the difference of savings between Medicare and the hospital and 
physician partners. So if we end up ferreting out unnecessary 
stents and unnecessary defibrillators, or choosing the right 
image and reducing the cost of imaging, and reducing the number 
of admissions and readmissions to hospitals by improving the 
treatment of heart failure--that is going to reduce the income 
to the hospitals. Right? Because they won't have as many 
admissions. They won't have as many procedures and images.
    So to help offset that, splitting the savings between 
Medicare and the provider community of doctors and hospitals is 
a way you could get people to move much faster. But we would 
need to require that while they are doing that, they are 
measuring how much progress they are making in a way that is 
effective and scientifically valid, and report that back so 
that we can see what we are doing.
    Chairman HERGER. The gentleman's time has expired.
    Mr. JOHNSON. Thank you, sir.
    Chairman HERGER. Mr. Thompson from California is recognized 
for five minutes.
    Mr. THOMPSON. Thank you, Mr. Chairman, and thank you for 
holding the hearing.
    I would like to just piggyback on something that the 
chairman and the ranking member both spoke on, and that is the 
importance of fixing the SGR program. I have got to tell you, 
in my district that is what I hear about most--from the medical 
profession, from patients, people on Medicare.
    They have long forgotten all the manufactured crisis that 
was sent out on the talking points for the health care reform 
stuff. They want to make sure that they are going to get paid 
for the medical services that they provide, and Medicare 
patients want to make sure they are going to have a doctor to 
go to. And it stops right about there.
    I have not had one Medicare person stop me on the street 
and say, hey, I think electronic records are good, bad, or 
otherwise; the Affordable Care Act is doing this, that, or the 
other thing. But the SGR is critically important, and I don't 
think it is enough to say if the Senate Democrats didn't do 
this or the House Republicans didn't do that. We have dropped 
the ball on this thing.
    I think Mr. Stark nailed it when he said that it is the 
cost, $300 billion to fix this thing. Well, the bad news is if 
we wait another five years, it is over $600 billion. And I 
applaud my colleague and ranking member for raising a proposal 
as to how it can be paid for.
    We need to come together as Members of Congress, party 
stripe notwithstanding, and figure out how we come up with the 
dollars to fix this because right now--Mr. Nichols talked about 
the importance of partnerships. This is not a partnership. It 
is not happening. The Congress is not doing its fair share. If 
you use the breakfast analogy, we are bringing the eggs. And 
that is just not good enough, and I think we need to move 
quickly on that.
    Mr. Nichols, on the Affordable Care Act, this has in fact 
moved towards--some of these programs have moved towards 
payment reforms. And I think that is an important part of this 
bill on the part of a lot of us, and so I am glad to see this 
happening.
    Can you talk about how the ACA reforms are moving private 
sector providers to develop and explore new forms of health 
care delivery that encourage efficient delivery and quality 
care?
    Mr. NICHOLS. I would be glad to, Congressman Thompson, and 
let me start with the program which I think is the most 
comprehensive, and that is the Comprehensive Primary Care 
Initiative, which you may know was actually offered to health 
plans so that they would indeed apply for the grant.
    Then, once selected, what they are looking for is five to 
seven markets around the country where they have a sufficient 
market share to really reach a large number of practices. And 
they will go back and jointly recruit physician practices to 
join the program, to join the party, and to devise payment 
arrangements that will work for those local communities.
    As every member of this panel has said to you, America is a 
big old diverse country. The idea that we can make one set of 
rules apply everywhere is just a little bit, well, last 
century. So here we are, and what is great about CPCI is indeed 
you are getting the plans and the government to work together 
to find a way to get to exactly what Dr. Share was talking 
about, what makes it work in Michigan versus Virginia versus 
California. That is among the more interesting ones.
    But I also want to emphasize the most recent innovation 
challenge grant, which basically was an open-ended invitation 
to provider groups, plans, people around the country. And while 
CMMI has not released the final numbers that have come in on 
applications because the grants have not been made, I know, 
from the people that I know who applied, very large numbers of 
people were very interested in this program--I mean thousands 
around the country. And we know this because when you apply, 
you get an email back that says, you are the 400-whatever.
    So over 6,000 people exhibited letters of interest. Over 
2,000, we think, actually submitted proposals. That tells you 
something about the scale of people around the country who are 
hungry to do exactly what Dr. Bender talked about, and that is, 
how do you make incentives work where we are? And they are 
trying to tell the government, this is the best way to work for 
us. I can think of no better way to encourage the kind of 
partnership we all agree on.
    Mr. THOMPSON. Thank you.
    Dr. Share, one of the programs, the multi-payer advanced 
primary care initiative--and I think Blue Cross Blue Shield in 
Michigan is part of that--do you agree with CMS that CMS can be 
a catalyst in increased innovation in a health care system? And 
does this participation in this program lend to that?
    Dr. SHARE. Yes, I do agree. As it happens, in Michigan--and 
by the way, I mentioned earlier, we have 480 medical home 
practices in the demonstration project, which represent over 
half of the medical home practices in the eight states in the 
demo nationally--we actually had our physician group incentive 
program several years before in place, so we had a structure. 
We had engagement. We had made tremendous strides in developing 
medical homes and improving performance.
    So in our context, CMS came in and actively partnered with 
us, piggybacking on the work, building on the foundation we had 
laid. In other communities, they are beginning. They are 
starting with 10 medical home practices, with intention to grow 
that number. And the influx of support and focused attention 
and commonality of measurement approach by CMS has really jump-
started their effort, has amplified their interest and their 
ability.
    So I think in different communities it will play out 
differently. But there is no question the answer is yes.
    Mr. THOMPSON. Thank you.
    Chairman HERGER. The gentleman's time is expired.
    Mr. Kind is recognized for five minutes.
    Mr. KIND. Thank you, Mr. Chairman, and thank you for 
holding this very important hearing. Again, we have an 
excellent panel and your testimony here today is very 
appreciate and quite inspirational.
    I mean, what I have heard you in your testimony, reading 
through your written submission as well, it is hard to find any 
inconsistency in what is happening in the private world versus 
what reforms are being advocated in the Affordable Care Act. 
And Dr. Nichols, I couldn't agree with you more. There has to 
be a convergence or harmony in delivery system and essentially 
payment reform between both the private and the public spheres 
or it is not going to work very well.
    I am proud that I hail from a state, Wisconsin, that seems 
to be out ahead of the cost curve. And Dr. Lewin, I am going to 
go to you shortly here to talk about the Smart Care project 
that you have submitted to CMMI for an update on that.
    But you look at certain models of care that are proving 
very effective, from the Mayo system to Gundersen, to 
Marshfield, to Aurora, to Dean, to Theta Care--highly 
integrated, coordinated, patient-focused, which provide models 
of where we need to drive the health care delivery system, and 
hopefully, ultimately--and I think this is going to be the 
verdict on any type of health care reform in this country--the 
payment reform that is desperately needed.
    We have got direct control over Medicare, and I would love 
to see fee-for-service die as quickly as possible so we can get 
to a value- or quality-based reimbursement system, which sounds 
to me what you guys are all working on right now with the type 
of initiatives and the type of projects and demonstrations that 
you are involved in.
    Dr. Lewin mentioned the Smart Care project in Wisconsin. 
You are teaming up with the Mayo System of La Crosse, my 
hometown, but also UW Health Systems in Aurora in the state. 
Could you explain a little bit more what the goal is, how it is 
going to assist physicians, how it is going to lead to better 
quality outcomes for the patients, and how you see that 
working?
    Dr. Lewin. Great. Well, it really is a physician-mediated 
approach, and it uses really all the tools that we have 
developed in cardiovascular medicine to achieve a result of 
better outcomes, better patient care at a lower cost.
    So a good example will be the use of the Pinnacle registry 
in the outpatient setting to better and more consistently 
manage high blood pressure, dyslipidemia--you know, cholesterol 
and so forth--anticoagulation, and heart failure, to reduce the 
number of heart attack admissions, strokes, and heart failure 
admissions.
    Now, this is billions of dollars nationally, billions and 
billions. And in Wisconsin, it is going to be a lot of money. 
And even with the integration that you have got there, there is 
still a lot of progress that we know can be made.
    In addition to that, we are going to be applying the FOCUS 
tool on the inpatient side as well to choose the right image. 
There is a bewildering array of images now. There are dozen 
kinds of echo tests, a dozen kinds of nuclear tests, CT, MR, 
positron emission, and the science just keeps growing faster 
and faster.
    How do you choose the right test for the right patient? Or 
does the patient even need the test? Well, staying up with that 
science is awfully difficult. So using the FOCUS tool helps 
you, with six clicks at the point of care, make sure that 
either you are ordering a test or you don't need to order a 
test, figuring it out right away, far better than a radiology 
benefit manager approach, where you are calling a number and 
asking for permission.
    They are going to apply that across Wisconsin; also going 
to apply appropriate use with shared decision-making to help 
prepare patients who have coronary artery disease, determine 
whether in their future which pathway they are likely to go 
down--medical therapy, angioplasty and stents, or bypass 
surgery.
    Now, a lot of times people end up in the cath lab on the 
table, partly sedated, where they are going to make a decision 
about whether they need a stent or not. That is not when you 
want to ask that question. You need the shared decision-making 
early on. You need to explain to the patient what the options 
are, what the complications might be of procedures, and then, 
if the anatomy finally says it is a grey zone, you would have 
prepared the patient who would have said, I would rather go the 
stent in that circumstance, or I would rather take the medical 
therapy.
    That needs to be done early. And if we do that early, a lot 
of people will move toward less intense care. They would try 
the medicine, or they would try the stent rather than the 
surgery.
    So I think applying all these tools across the board and 
then using the registries, both inpatient and outpatient, to 
give the hospitals, the medical groups, feedback on their 
performance----
    Mr. KIND. I love your phrase, bring science to the point of 
care.
    Dr. Lewin. Yes.
    Mr. KIND. Another way of saying it is, let's find out what 
works and what doesn't and drive that information into the 
hands of our providers and patients through share decision-
making. So I don't know why there is all this angst and concern 
about comparative effectiveness research. That seems to be the 
whole point of driving science into the point of care and into 
the hands who need it the most.
    Dr. Lewin. Yes.
    Mr. KIND. And Dr. Sandy, this sounds very consistent, what 
UnitedHealth has been doing with imaging services and trying to 
use clinical studies and support tools for physicians in order 
to deal with it. We may not have time this round to get your 
response, but I would like to follow up a little bit more on 
what UnitedHealth has done in that area, too.
    Thank you, Mr. Chairman.
    Chairman HERGER. Thank you.
    Mr. Reichert from Washington is recognized for five 
minutes.
    Mr. REICHERT. Thank you, Mr. Chairman. Thank all of you for 
the hard work that you are doing in this field. I know it is 
not an easy answer, as we have been struggling with this as a 
nation for many, many years.
    We have some doctors on the Ways and Means Committee, as 
you know. Most of us are not doctors, so we are wading through 
the information that you have all given us. But I want to focus 
on coordinated care as it relates to chronic care and how that 
plays into the doctor reimbursement issue.
    We all agree that everyone's goal here is quality care, 
efficient care, access, and reduced cost. You have all talked 
about cooperation, the culture of cooperation, collecting data, 
information, and facts. You have talked about health IT and 
clinical data registry.
    Well, even in our own government system, the VA we know has 
a great health IT system, but the Department of Defense, pretty 
much nothing. So how do they even--they can't even communicate. 
How do we expect them to reach outside into the private sector? 
And it gets more complicated, I know.
    So all of this is tied together. It needs to be, I agree 
with all of you, a physician-driven, patient-driven solution to 
all this. And you are all making progress. But there are a 
couple of things that bother me.
    I think, first of all, I liked Mr. Nichols' comment about 
we need to have Medicare join the party that the private sector 
is throwing. I think that is a good point. And this leads me to 
my two questions, and I will ask them together.
    So we know that the average 75-year-old suffers pretty much 
from three chronic health conditions out of five chronic 
diseases that most of you have been dealing with--heart 
disease, cancer, stroke, COPD, and diabetes. In your opinion, 
does the original fee-for-service model in Medicare work going 
forward? I am going to guess I know what the answer is on that. 
And how do we work together to build this coordinated care for 
these seniors who are trying to live with and manage these 
three chronic diseases?
    The second question, and more specific, is to the issue of 
a group that I met with not too long ago, and it is regarding 
the illness of lymphedema, sometimes brought on by cancer 
treatment, sometimes as a birth illness. Lymphedema is covered 
by some insurance companies. The treatments are sometimes long 
and drawn out, and you probably all know some of the side 
effects when the treatment is not given. And some of the 
compression garments, for example, are covered by some 
insurance companies but not covered by Medicare.
    How do you bring this together? These folks, if they are 
not treated correctly, they end up with these compression 
garments prematurely. It doesn't do the job. They need to have 
massage therapy. They need to have some followup. How do you 
tie in Medicare with the chronic diseases that I have talked to 
and follow up with those folks that are dealing with chronic 
illnesses? Because eventually, this lymphedema issue can result 
in infections and even death, as you know.
    Anyone who wishes to address the question. Dr. Share?
    Dr. SHARE. So you had two questions, the first being that I 
think it is essential to align the incentives of the physicians 
so that a meaningful proportion of their reimbursement becomes 
dependent upon them doing the right thing, not just with an 
individual patient but at the population level; also, dependent 
with patients with common chronic or multiple chronic 
illnesses, which are challenging to address.
    It is not as if we can simply successfully address that 
within the context of one physician's office because primary 
care doctors and specialists and doctors in hospitals tend to 
wind up seeing these same patients at different points in time. 
So we really need an organized system of care, the language we 
are using, where there are clinically integrated systems and 
also sophisticated, organized care management approaches that 
help providers across settings manage a group of patients. And 
it needs to be patient-centric.
    So while the work of the cardiologist is really seminal and 
important, patients with cardiac illness don't just get treated 
by cardiologists. So you have to have a system where the 
primary care folks have the same data and the same scientific 
evidence at the point of care. So that is one answer.
    The second question that you asked had to do with the 
frustration that patients and families experience when 
difficult medical illnesses have different types of coverage 
depending upon the insurer they have. And especially if you are 
switching insurers over time, the same person with the same 
problem may not have access to the same services.
    So I would just say there that the key is to define or 
really breathe life into the notion of medical necessity 
because most insurers say medically necessary care is covered, 
but then we don't have enough evidence to always define what is 
medically necessary.
    So that is where I think comparative effectiveness research 
comes in because it can help to really rigorously define 
answers to those key questions.
    Mr. REICHERT. Thank you.
    Chairman HERGER. The gentleman's time is expired.
    Mr. Blumenauer is recognized for five minutes.
    Mr. BLUMENAUER. Thank you very much, Mr. Chairman.
    Dr. Lewin, I want to go back to where you left off with my 
colleague, Congressman Kind. Your testimony spoke to shared 
decision-making, the reference here to giving everybody more 
choices and having conversations where they will be the most 
productive and useful.
    I would say, parenthetically, I have legislation based on 
what we had previously with the Ways and Means Committee; 
despite a little kerfuffle, it actually was unanimously 
supported by Members of the Committee and one of the few areas 
of broad agreement, that we need to strengthen not just the 
information for patients, but the guarantees that their wishes 
would be respected.
    You made a reference there that I think is important. Some 
people think of this as just end of life. But patients more 
frequently are subjected--the patient and the patient's family 
are subjected to very challenging circumstances, often when 
they are not perhaps in the frame of mind that is clear. They 
may be clouded with pain or medication, anxiety, and quick 
decision.
    I wondered if you could just elaborate on this notion of 
shared decision-making, how you envision it moving forward, and 
things that the Federal Government might be able to do either 
within the ambit of the legislation that is standing or changes 
that we should make.
    Dr. LEWIN. Thank you, Congressman Blumenauer. It is an 
incredibly good question.
    We feel like, with cardiologists and physicians in general, 
we have these guidelines and performance measures to help us 
guide the science. We still use clinical judgment. If patients 
had guidelines, I think what they would have is they would 
know--we would give them some ability to understand what 
questions they should be asking their clinician when they come 
in.
    So we have developed, at Cardiology, figuring we need the 
patients as partners in care with us if we are going to reduce 
costs, something called CardioSmart. It is a website, but it is 
interactive. It has mobile applications. It allows patients, 
when they come in to either their primary care doctor or their 
cardiologist, to know enough about their condition to ask the 
right questions, and to be able to ask whether, am I really a 
better candidate for medicines, or should I be thinking about 
angioplasty and stents, or do I need a defibrillator?
    Those kinds of questions are not things patients are 
typically challenged to think about ahead of time. So we would 
like the patient to come in with the questions they need to ask 
and work with their doctor, and then truly participate in 
deciding how that care is going to go in the future, whether 
they really need this test or whether they really need this 
procedure or how, in fact--whether they need a generic medicine 
or the most expensive medicine on the market.
    Those kinds of decisions, if we could get those to be 
shared, I think patients would engage in a positive way to 
reduce costs and improve outcomes. So we think that this is a 
critical part of the overall picture of improving quality and 
lowering costs.
    Mr. BLUMENAUER. Thank you very much. I appreciate that, 
Doctor, and I am hopeful that this is something that we can 
have a broader conversation. I will give to you a piece of 
legislation that we are working on, but would welcome an 
opportunity for further feedback.
    Mr. Chairman, I will just say, you recall that we were all 
concerned--when we were debating health care reform, we all 
were concerned to make sure that patients had the information, 
that they could make decisions, and those decisions would be 
respected.
    You will recall we had some actually touching testimony 
from committee members. I think of Geoff Davis from Kentucky, 
who talked about a problem that he had with his mother at a 
late stage. And I would like to see if this might be an area 
that the committee could review.
    I will share with each of you legislation to try and--we 
call it Personalize Your Health Care, to make sure that we do 
everything we can, whether it is Medicare or other mechanisms, 
that physicians are encouraged and maybe even paid to have a 
conversation like this.
    One of the problems that a number of people here have 
talked about is that physicians are usually paid when they do 
something to somebody. But to sit down and talk to them, to 
empower them and to learn, that is off the--that is kind of 
either a different code or it doesn't happen.
    Mr. Chairman, I would look forward with you and the 
subcommittee that maybe we could have a little conversation 
about this before our work is done.
    Chairman HERGER. I think the point is well made. I look 
forward to working with the gentleman and the committee on this 
very important issue.
    The gentleman from Washington, Mr. McDermott, is 
recognized.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    Willie Sutton was once asked, ``Why do you rob banks?'' And 
he said, ``Well, that is where the money is.'' And it seems to 
me that what I am listening to you talk and reading all of this 
is that chronic illness is where the money is spent.
    Playing off of what Mr. Blumenauer just said, several years 
ago, Sandy Levin and I put an amendment into the Medicare 
legislation requiring that everybody who applies be given a set 
of final directives that they can fill out so that they can 
decide a little bit about what will happen to them in the 
future. We went back a year later to find out how many had 
actually done so, and less than 20 percent had filled them out.
    One of the questions I have is, the issue of how an is 
going to ever control costs if we don't get the patient 
involved early on thinking about what the final process is. 
When you get to 65, the wheels are starting to fall off, so at 
that point at least you know that you have an end in sight. 
When you are 30, it is very hard to get anybody to think about 
this stuff at all.
    But I am interested, Mr. Nichols or Dr. Nichols. You have 
been at the Boeing Clinic and you have been at the Virginia 
Mason experience, in my state I know about, and we have heard 
about your experience with some other places.
    How do they deal with this whole question--and maybe, Dr. 
Lewin, you want to join in on this--how do you deal with the 
question of getting patients to think about this before they 
are in the cath lab, sedated, and then you ask them, do you 
want a stent? I mean, how are they doing this to make it work?
    Mr. NICHOLS. Well, I can tell you, Congressman, there are a 
couple of really fascinating examples around the world, 
actually. One class of things is getting people engaged in 
assessing their own health. I know of a program in South Africa 
where an insurance company actually pays people to do the 
health risk assessment. So you get rewarded for doing it.
    But then when you do it, you have to go take it to your 
primary care doc, and you work with that physician about what 
is right for you. And, you know, I have a pretty bad family 
history in heart, and my secretary does not, and she is a whole 
lot younger, so we have very different pathways. But the 
clinician will work out with us what is the best pathway for 
you to be healthy. That is the key, sir. How do you want to 
manage your trajectory in life?
    It turns out this program gets people incentivized. They 
start doing the things. They basically give them what you and I 
would call green stamps, rewards for doing the right stuff 
along the way. This program, they are filling up three 
airplanes a day with people taking vacations on the green 
stamps they have earned. They are spending 2 percent of the 
premium on the promotion. They are saving 5 percent off trend 
three years in a row.
    So it has to do with incentivizing the patient to begin to 
engage in managing their own health with a clinician. It has to 
do with hooking them up with a real live doc you know and trust 
and takes care of you, who lays out a pathway for you, and then 
you get incentivized.
    Now, at the end of one's lifespan, one might think about 
having that conversation in lots of different ways. But you 
probably know of Mt. Sinai in New York, Diane Meier, the person 
who invented the--I think it is called the Center for 
Advancement of Palliative Care.
    What she has is a team that basically--and I know you are a 
physician--teaches clinicians how to talk to families because, 
as you know, sir, we don't teach them that all that well in 
medical school. And most clinicians think about, what I am 
supposed to do is save, protect, keep them alive. In fact, what 
families and patients often want nearer the end are, what are 
my options? What are my choices? What is going to happen to me? 
What is it going to be like? What do I really have to choose 
among?
    That is where those conversations teaching the clinicians 
how to talk to families and the patients can often have a heck 
of a lot of what I would call effective shared decision-making 
down the road, where people tend to take the least invasive 
option because they want to spend as much quality time with 
their families as they can.
    I will turn it to Jack.
    Dr. LEWIN. I think that there are some people with heart 
failure, for example. We are trying to pull together videos to 
help people look on that CardioSmart site at somebody who is in 
the same circumstance that they are in and hear about their 
story over the next six months.
    For many people, the end stage, a class 4, New York Heart 
Association class 4 heart failure, the patient needs to know 
that they are limited to end stage here, and they can become 
comfortable and start doing things to make themselves feel 
better and be with their families rather than heading to the 
intensive care unit for multiple procedures.
    There is also another little element of this we shouldn't 
forget, and that is the medical malpractice piece. It is back 
to the patient laying in the cath lab. The physician is really 
worried there, if the patient hasn't clearly understood that 
they would rather go medical therapy if they could. They are 
very worried about not doing the procedure because they don't 
know whether the patient is going to take the meds.
    So I think that there are a bunch of elements there. But we 
can do so much better at helping people make their own better 
decisions and working with them.
    Mr. MCDERMOTT. Is there any evidence--Mr. Chairman, may I 
ask one question to follow that?
    Chairman HERGER. Maybe to be followed up in writing. Time 
is expired.
    Mr. MCDERMOTT. Okay. I want to ask you about how you get 
physicians to get patients to sit and talk about it.
    Chairman HERGER. I thank the gentleman.
    Now the gentleman from Florida, Mr. Buchanan, is recognized 
for five minutes.
    Mr. BUCHANAN. Thank you, Mr. Chairman. And I also want to 
thank our witnesses for taking the time today.
    In Florida, like my district, I have 180,000 seniors 65 and 
older. And I am very concerned about the quality of care our 
seniors are getting. In terms of the way doctors are being 
reimbursed, I hear it every single day, many of them that 
practice for 20 years--they are afraid to leave their practice 
because there might not be someone else to take their practice. 
There is not the enthusiasm.
    They said every year it gets more uncertain in terms of the 
payment plan or how they get reimbursed. It is a very big 
issue. I know our cardiologists in one of our big practices in 
our area just lost 30 percent. That came out of nowhere for 
them.
    So I guess, Dr. Lewin, why don't you give us your thoughts 
on what is happening with the reimbursement or the 
unpredictable pay that doctors are getting reimbursed all over 
the country, but especially in Florida, where you have heavy, 
heavy Medicare patients.
    Dr. LEWIN. Well, as you probably know, Congressman 
Buchanan, Medicare changed the payments for diagnostic services 
in the private practice setting for cardiologists in 2010, and 
they reduced by about 30 percent the modern day stethoscope 
tools of the cardiologist in the office, which are stress 
testing and nuclear testing and other ways that we use to 
diagnose patients.
    The result of that was we had almost a wildebeest migration 
of cardiologists moving from private practices to hospital 
employment. And in fact, five years ago when I first came to 
the American College of Cardiology, 70 percent of the 
cardiologists were in private practice, 30 percent were in 
academic or hospital practice.
    Today it has completely flipped. We now have 70 percent in 
hospital-based practice or employment and 30 percent in private 
practice, and those remaining 30 percent are struggling 
because--and it is difficult because we pay the hospital 
outpatient portion of that at a much higher rate than the 
private practice. And the patient, obviously, pays a higher 
copay.
    So what has happened to cardiology practices, really, is 
the economics--and it is largely Medicare economics--have 
forced them to move toward hospital employment.
    Mr. BUCHANAN. That is what I hear every day.
    Dr. Bender, let me ask you, I am just talking with a lot of 
doctors that we have in our area. But I don't know how--as a 
business person myself for 30 years, I don't know how people 
make decisions in terms of capital improvements however we have 
got one large firm looking at trying to add facilities or in 
terms of hiring. I got here in 2007 and there has been probably 
five or six times where we have had to adjust or deal with the 
SGR doc fix.
    As someone that has built a successful practice, and 
obviously you are also running a business, how does that affect 
you in terms of looking to the future, in terms of providing 
service to patients and everything?
    Dr. BENDER. Thank you, Congressman Buchanan. So I do not 
have a part-time patient-centered medical home, as you can 
imagine. We offer services regardless of payer source. So right 
now, maybe the good news is Medicare is getting my patient-
centered medical home for free because WellPoint, UnitedHealth 
Care, and the other groups that are funding it through the 
pilot are basically paying for it.
    Whether that is sustainable long-term, probably not, 
particularly since I am 40 percent Medicare. SGR threats are--
--
    Mr. BUCHANAN. In our case in Florida, we are 80, 90 percent 
Medicare for a lot of these doctors.
    Dr. BENDER. Yes. So it would be much more difficult to have 
a patient-centered medical home pilot. And so, for example, 
four years ago, when SGR did not get repealed on time and my 
Medicare patients were delayed for like 30 days, I called my 
bank and I took a $70,000 signature loan, and that is how I 
covered my payroll.
    Now, since that time we have had the derivative markets and 
the Wall Street excesses, and the banking regulations have 
changed. I can't call my banker now and ask for a $70,000 
signature loan. If SGR is not repealed, we would be bankrupt.
    Mr. BUCHANAN. Thank you, Mr. Chairman.
    Chairman HERGER. Thank you.
    Dr. Bender, you state that your practice is providing 
better quality to patients with diabetes and other common 
conditions. How big a role did embracing the concept of being 
measured on key accepted quality measures play in facilitating 
the quality improvements?
    Dr. BENDER. Thank you, Chairman Herger. It is huge. When I 
was in paper, I had no idea how many diabetics I had, much less 
how many of them were at goal. Now I get a report every month 
that basically tells me now just how my individual practice is 
doing but how I compare to others in my region.
    So, for example, if we are at 80 percent for a certain 
metric, that might be good, but it is in a vacuum. Once I learn 
that the others in the state are at 95 percent, then I realize, 
wow, I need to work on it. Or maybe everyone else is at 40 
percent and I am the thought leader. And then they are calling 
me, and we discuss in a way that is FTC-proof. You know, there 
is no price fixing; it is academic and collegial. But we all 
work together to improve our quality in the pilot.
    Chairman HERGER. Thank you.
    Dr. Lewin, did you have something to add to that?
    Dr. LEWIN. Well, I just want to say that it is measure to 
manage. You have got to give doctors and hospitals continuous 
feedback on outcomes and performance, and when you do, we just 
have it built into us. We want to improve.
    So making that part of what we do in the future as part of 
our whole system is going to make the whole difference in 
moving us toward higher-quality care. And if you put payment 
incentives with it, then you double the incentive and the 
progress.
    Chairman HERGER. Thank you.
    Mr. STARK. Mr. Chairman.
    Chairman HERGER. Yes?
    Mr. STARK. Just a moment for a----
    Chairman HERGER. Yes.
    Mr. STARK. I just wanted to ask Dr. Bender if he knows what 
tomorrow is.
    Dr. BENDER. Other than Wednesday, I am uncertain.
    [Laughter.]
    Mr. STARK. Uh-oh. Lewin, you are not doing your job. Do you 
know what tomorrow is? Tomorrow is National Heart Day, and my 
10-year-old is going to school in fifth grade to jump rope for 
Heart Day. Get with it, you guys. You have got to get your PR 
machine going here.
    Dr. LEWIN. We have got the whole month, sir.
    Mr. STARK. If you don't know that tomorrow is----
    Dr. LEWIN. It is National Heart Month and National Heart 
Week.
    Mr. STARK. I expect you all to jump rope.
    Thank you, Mr. Chairman.
    Chairman HERGER. You are welcome.
    Mr. STARK. Thank the witnesses for excellent----
    Chairman HERGER. Everyone in this room will know what 
tomorrow is now, so I thank you.
    I want to thank each of our witnesses for your testimony 
today. Your private sector experience with rewarding physicians 
for quality efficiency is of keen interest as we seek to reform 
Medicare physician payments. The fact that the different 
stakeholders are working together, in many cases, on this 
endeavor gives me increasing hope that Medicare can learn from 
these efforts so we can find a long-term solution that has been 
so elusive.
    I appreciate the physician leadership exemplified by our 
witnesses because we need the physician community to be active 
participants in our reform effort. Together we must find a 
better way. The stakes are high. The current rate of growth in 
Medicare spending is unsustainable. And the congressional habit 
of short-term fixes is creating a great deal of uncertainty for 
physicians and beneficiaries.
    Further, the program will go bankrupt if changes are not 
made. This is our reality. While I, along with many on the 
Republican side, believe we ultimately need to bring 
competition and market forces into the Medicare program in 
order to reduce costs, we will also continue to move forward on 
finding the best way to eliminate the SGR and replace it with 
responsible reform.
    Any member wishing to submit a question for the record will 
have 14 days to do so. If any questions are submitted, I ask 
the witnesses to respond in a timely manner.
    With that, the subcommittee is adjourned.
    [Whereupon, at 11:33 a.m., the subcommittee was adjourned.]

Public Submissions For The Record

                  American College of Gastroenterology


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                 American Society of Clinical Oncology


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                        Center for Fiscal Equity




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                    Gundersen Lutheran Health System


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                   Integrated Healthcare Association



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                    Pacific Business Group on Health


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




                   The Alliance of Specialty Medicine



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                                 
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