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



 
                   PHYSICIAN ORGANIZATION EFFORTS TO

   PROMOTE HIGH QUALITY CARE AND IMPLICATIONS FOR MEDICARE PHYSICIAN

                             PAYMENT REFORM

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



                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                      COMMITTEE ON WAYS AND MEANS

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 24, 2012


                               __________

                          Serial No. 112-HL13

                               __________

         Printed for the use of the Committee on Ways and Means





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                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

WALLY HERGER, California             SANDER M. LEVIN, Michigan
SAM JOHNSON, Texas                   CHARLES B. RANGEL, New York
KEVIN BRADY, Texas                   FORTNEY PETE STARK, California
PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
GEOFF DAVIS, Kentucky                XAVIER BECERRA, California
DAVID G. REICHERT, Washington        LLOYD DOGGETT, Texas
CHARLES W. BOUSTANY, JR., Louisiana  MIKE THOMPSON, California
PETER J. ROSKAM, Illinois            JOHN B. LARSON, Connecticut
JIM GERLACH, Pennsylvania            EARL BLUMENAUER, Oregon
TOM PRICE, Georgia                   RON KIND, Wisconsin
VERN BUCHANAN, Florida               BILL PASCRELL, JR., New Jersey
ADRIAN SMITH, Nebraska               SHELLEY BERKLEY, Nevada
AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas
ERIK PAULSEN, Minnesota
KENNY MARCHANT, Texas
RICK BERG, North Dakota
DIANE BLACK, Tennessee
TOM REED, New York

        Jennifer M. Safavian, Staff Director and General Counsel

                  Janice Mays, Minority Chief Counsel

                         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


                            C O N T E N T S

                               __________
                                                                   Page

Advisory of July 24, 2012 announcing the hearing.................     2

                               WITNESSES

Colonel (Retired) Lawrence Riddles, M.D., President of the Board, 
  American College of Physician Executives, Testimony............     9
David L. Bronson, M.D., President, American College of 
  Physicians, Testimony..........................................    22
Michael L. Weinstein, M.D., Chair, Registry Board, American 
  Gastroenterological Association, Testimony.....................    38
Peter J. Mandell, M.D., Chair, American Academy of Orthopaedic 
  Surgeons Council on Advocacy, Testimony........................    49
Aric R. Sharp, FACHE, CMPE, CEO, Quincy Medical Group, Testimony.    64
John Jenrette, M.D., CEO, Sharp Community Medical Group, 
  Testimony......................................................    76

                       SUBMISSIONS FOR THE RECORD

Association of American Physicians and Surgeons, statement.......   110
Gundersen Lutheran Health System, statement......................   115
The American College of Gastroenterology, statement..............   119
The Center for Fiscal Equity, statement..........................   124


                   HEARING ON PHYSICIAN ORGANIZATION

                  EFFORTS TO PROMOTE HIGH QUALITY CARE

                     AND IMPLICATIONS FOR MEDICARE


                        PHYSICIAN PAYMENT REFORM

                              ----------                              


                         TUESDAY, JULY 24, 2012

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

    The Subcommittee met, pursuant to notice, at 10:02 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

                  Chairman Herger Announces Hearing on

             Physician Organization Efforts to Promote High

               Quality Care and Implications for Medicare

                        Physician Payment Reform

Washington, July 24, 2012

    House Ways and Means Health Subcommittee Chairman Wally Herger (R-
CA) today announced that the Subcommittee on Health will hold a hearing 
to explore physician organization efforts to promote high quality 
patient care. Understanding these initiatives will inform the 
Subcommittee as it continues to examine how to reform the Medicare 
physician payment system. The Subcommittee will hear from organizations 
representing the physicians who are at the forefront of patient care 
and therefore most knowledgeable about what may be needed to optimize 
care for Medicare quality and beneficiary health outcomes. The hearing 
will take place on Tuesday, July 24, 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.
      
    Physician organizations generally support the notion of 
incorporating quality, efficiency, and patient outcomes into the 
Medicare physician payment system. Many physician organizations, 
especially those representing the various specialty disciplines, are 
involved in a range of activities that increase the likelihood that 
these aims can be accomplished in a meaningful way. Examples of these 
physician-led activities include establishing evidence-based guidelines 
for treating common conditions, using information on actual patient 
encounters to measure health outcomes, and helping physicians organize 
their practices to be more responsive to patient needs.
      
    In this third in a series of hearings on Medicare physician payment 
reform, the Subcommittee will learn more about physician-led quality 
initiatives such as those described above. In previous hearings, the 
Subcommittee heard about innovative private sector delivery models and 
payment reform initiatives payers are using to reward high quality and 
efficient care. Specialty-specific initiatives designed to support 
practices that are testing different payment models in the private 
sector can also provide a foundation from which to reform Medicare FFS 
payments. Recognizing that physician input is key to successfully 
incorporating quality and efficiency, the Subcommittee seeks to 
understand what physicians believe is meaningful to measure, what 
constitutes good practice in the care of patients, and what changes are 
needed to improve their practice environment.
      
    In announcing the hearing, Chairman Herger stated ``The 
Subcommittee is committed to reforming the Medicare payment system so 
that it brings more value to beneficiaries while remaining viable for 
physicians. I am pleased that many organizations representing different 
physician specialties are far along in establishing quality improvement 
programs including measures of quality that are important to 
beneficiaries and fair to physicians. Understanding what physicians 
have already accomplished in this area, what is underway, and what is 
on the near horizon will be helpful as we explore how to ensure the 
Medicare physician payment system incentivizes and rewards the care 
that results in optimal beneficiary outcomes.''
      

FOCUS OF THE HEARING:

      
    The hearing will focus on how physician organization efforts to 
promote quality and efficiency can inform Medicare physician payment 
reform.
      

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 Wednesday, August 8, 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://www.waysandmeans.house.gov/.

                                 

    Chairman HERGER. The Subcommittee will come to order. We 
are meeting today to hear from physician organizations who are 
working to improve the quality of care delivered to patients.
    These initiatives have been shown to be successful and may 
hold promise as we seek to reform and update the Medicare 
Physician Payment Formula.
    For the past 18 months, we have been seeking both formal 
and informal input on physician payment reform from the 
physician community and other relevant stakeholders.
    At our last hearing on this topic, we heard about private 
sector approaches to reforming payments.
    Today's hearing is a third in a series on reforming the 
flawed SGR and focuses on quality improvement activities 
developed by medical societies and the practical implications 
of these activities across physician practice settings.
    We will hear shortly from physician executives, physician 
organizations representing both primary and procedural care, 
and the leaders of two group practices, all of whom are engaged 
in efforts that focus on improving the quality of care 
delivered to patients.
    A common theme will be that providing optimal quality and 
outcomes requires setting appropriate standards, building the 
right infrastructure, and using the right data to measure 
performance.
    Our intent is to hear from the physician community about 
how to reform the Physician Payment System so that quality, 
efficiency, and patient outcomes are accounted for in a fair 
and fiscally responsible manner.
    As I have noted before, merely averting sustainable growth 
rate cuts each year is not a fix. A permanent solution has been 
elusive in large part because of the substantial costs 
associated with repealing SGR, currently estimated at nearly 
$300 billion over ten years.
    However, this Committee must do more than just simply 
repeal the SGR. We must also determine how to improve the 
existing Medicare payment system and work with physicians to 
develop other payment models that preserve and promote the 
physician-patient relationship and reward physicians who 
provide high quality and efficient care.
    Many are concerned about the lack of alignment among 
Medicare's current incentive programs to enhance quality, such 
as e-prescribing, meaningful use of electronic health records, 
and the so-called ``value based modifier.''
    Such programs were not developed nor led by the physician 
community. While some feel these programs are a step in the 
right direction, I am concerned about taking a top down 
Government centered approach to defining and rewarding quality 
of care.
    Physician organizations have been working with their 
members for many years to build a solid foundation for defining 
and operationalizing high quality care.
    For example, many groups are actively developing evidence 
based guidelines, quality performance measures, data collection 
tools, and clinical improvement activities.
    It is my hope we can learn from and build upon these 
efforts as we work with the physician community to develop a 
21st Century payment system.
    Before I recognize Ranking Member Stark for the purposes of 
an opening statement, I ask unanimous consent that all members' 
written statements be included in the record. Without 
objection, so ordered.
    Chairman HERGER. I now recognize Ranking Member Stark for 
five minutes for the purpose of his opening statement.
    Mr. STARK. Thank you, Mr. Chairman, for holding this 
hearing today and exploring ways that we can promote high 
quality patient care.
    As we try to replace the SGR Medicare Formula, it is 
important that we understand what is happening in the private 
sector and learn how to incorporate that into any Medicare 
Formula change.
    I look forward to hearing the suggestions of our witnesses 
today.
    We have avoided replacing the SGR in favor of easier 
reforms, and if we do not fix it, we are going to find that 
many of our outstanding physicians will begin to turn away from 
Medicare.
    We have tried to reform SGR for over a decade. You are 
quite right, 200 to $300 billion to pay for it is tough. We do 
have an opportunity to pay for it, the Overseas Contingency 
Operations Fund, basically war spending, could be used this 
year for a permanent SGR fix.
    There is a good deal of bipartisan support for the idea, 
and I would like to insert without objection a letter signed by 
America's physician professional societies supporting the use 
of these OCO funds to permanently resolve the SGR problem.
    Three of the organizations are represented by today's 
witnesses, the American College of Physicians, the American 
Gastroenterological Association, the American Association of 
Orthopedic Surgeons, who have joined in signing this letter.
    [The information referred to follows: The Honorable Pete 
Stark]

[GRAPHIC] [TIFF OMITTED] 



    Mr. STARK. I look forward to hearing from our witnesses, 
and the discussion that follows, and I yield back.
    Chairman HERGER. Thank you, Mr. Stark. Today we are joined 
by six witnesses.
    Dr. Lawrence Riddles, who is a recently retired Command 
Surgeon for the U.S. Air Force and current President of the 
Board for the American College of Physician Executives.
    Dr. David Bronson is President of Cleveland Clinic Regional 
Hospitals, and serves as the President of the American College 
of Physicians.
    Dr. Michael Weinstein, a practicing gastroenterologist in 
the D.C. metro area, and Chair of the American 
Gastroenterological Association's Registry Board.
    Dr. Peter Mandell, who is a practicing orthopedic surgeon, 
and Chair of the American Academy of Orthopedic Surgeons 
Council on Advocacy.
    Mr. Aric Sharp, CEO of Quincy Medical Group in Quincy, 
Illinois.
    Dr. John Jenrette, the CEO of Sharp Community Medical Group 
in San Diego, California.
    You will each have five minutes to present your oral 
testimony. Your entire written statement will be made a part of 
the record.
    Dr. Riddles, you are now recognized for five minutes.

  STATEMENT OF DR. LAWRENCE RIDDLES, PRESIDENT OF THE BOARD, 
            AMERICAN COLLEGE OF PHYSICIAN EXECUTIVES

    Dr. RIDDLES. Good morning, Chairman Herger, Ranking Member 
Stark, and members of the House Ways and Means Subcommittee on 
Health.
    I am Dr. Larry Riddles, a retired military surgeon and 
President for the American College of Physician Executives, 
commonly known as ACPE, the nation's largest health care 
organization for educating physician leaders.
    It is my privilege to share some of ACPE's thoughts on 
Medicare physician reimbursement challenges which you and your 
colleagues are wrestling with.
    We are not here to make an argument to preserve physician 
income, rather, we are here to move towards a desired end point 
that must to achieve timely and equitable access to high 
quality health care that is physician led and reimbursed 
fairly.
    Thousands of ACPE physician leaders are implementing 
innovative cost saving initiatives. Based on these experiences, 
ACPE proposes nine essential elements that we believe must be 
part of any successful future physician payment system.
    First, the reimbursement system must be quality centered. 
Any new reimbursement system must include compensation 
strategies providing high quality care.
    ACPE believes that there should be ongoing efforts to drive 
quality improvement that occurs in part through physician 
reimbursement reform.
    Current fee for service systems are based primarily on 
volumes of patients seen and number of procedures completed. 
This prevents achieving higher quality health care.
    Second, health care must be safe for all. ACPE believes 
physicians should be rewarded for making safety a priority. 
Examples of safety improvements led by physicians can be found 
in many hospitals and health systems. These initiatives, 
however, have largely been un-reimbursed.
    A new payment system should take into account reductions in 
adverse events and reward for successes with a range of other 
relevant patient safety indicators and clinical measures.
    Third, a streamlined system, strive for simplicity. We 
frequently hear from the ACPE members about the burden of 
reporting requirements for Medicare payments.
    Efforts toward common measures, common data elements, and 
common reporting requirements are underway and should be 
encouraged.
    Simplified measurements and reporting allows for 
transferability and scalability of information so that local, 
state, and national data collection analysis can occur more 
rapidly.
    Four, the system must be measurement based. As a science, 
health care measurement is immature. Measures endorsed by the 
National Quality Forum should be refined and publicly reported.
    Measurements directly related to physicians is highly 
complex, but ACPE encourages ongoing development of physician 
focused measurement and public reporting.
    Efforts to interpret outcomes must be clinically relevant, 
balanced, and realistic, and must not create unfounded negative 
connotations.
    Five, the system must be based on evidence based medicine. 
Physicians are much more likely to comply with guidelines if 
strong data are available. Many professional societies are 
generating evidence based guidelines and there is a Federal 
clearinghouse of guidelines, but utilization remains low.
    While evidence based medicine is an emerging field, 
physicians should be rewarded for improving and following 
guidelines and clinical pathways that are proven to provide 
safe and reliable care.
    Six, value based care. Value equals quality over cost. 
Reimbursements must be focused on value based care. The Centers 
for Medicare and Medicaid Services have already established 
pilot projects exploring value based purchasing and other 
public and private entities also have projects underway.
    ACPE believes any new reimbursement system should 
compliment these programs.
    Seven, innovation. Instilling a culture of innovation not 
creative billing within physician practices should be a 
priority. The payment system should encourage physicians to 
implement processes that save money and contribute to safer 
care.
    There are a variety of successful innovative programs in 
hospitals and health care systems at the local level. There 
needs to be a mechanism to raise them up to the national level 
so that innovative ideas can become best practices.
    Number eight, the system should be fair and equitable. The 
payment system must not create conflict between the primary 
care physicians and cognitive and procedural specialists. Each 
member of the health care team must be fairly remunerated for 
their overall long term care of patients and not just focused 
on individual episodes of care.
    Finally, the ninth element is the system should be 
physician led. Physicians are much more likely to accept a 
revised reimbursement plan if it is developed with physician 
input.
    The most progressive health care organizations tend to be 
physician led and physician leaders not only have a strong 
understanding of the health care on the clinical side but they 
also know how to lead and run successful enterprises.
    ACPE recommends the creation of a new independent 
commission composed of physicians, health care providers, 
experts in finance and quality, business leaders and patient 
representatives to study Medicare's funding dilemma and analyze 
the best practices and bring them to you for consideration.
    ACPE strongly believes that our nine essential elements in 
the next payment system will be critical to a successful 
outcome.
    Thank you for inviting us here today to provide testimony.

    [The statement of Dr. Lawrence Riddles follows:]

    [GRAPHIC] [TIFF OMITTED] 


    Chairman HERGER. Thank you.
    Dr. Bronson, you are recognized for five minutes.

STATEMENT OF DR. DAVID BRONSON, PRESIDENT, AMERICAN COLLEGE OF 
                           PHYSICIANS

    Dr. BRONSON. I am President of the American College of 
Physicians, the nation's largest medical specialty organization 
representing 133,000 internists, internal medicine 
subspecialists, and medical students pursuing careers in 
internal medicine.
    I am a Board certified practicing internist, a Professor of 
Medicine at the Lerner College of Medicine at Case Western 
Reserve University, and President of the Cleveland Clinic 
Regional Hospitals.
    Repeal of Medicare's sustainable growth rate is essential, 
but repeal by itself will not move Medicare to better ways to 
deliver care. We need to transition from a fundamentally broken 
payment system to one that is based on value of services to 
patients.
    We recommend the following steps to start such a 
transition. First, Congress should establish a transitional 
value based payment initiative where physicians who voluntarily 
participate in physician led programs to improve quality and 
value will be eligible for higher Medicare updates.
    Second, this transitional initiative specifically should 
provide higher updates to physicians and recognize patient 
centered medical homes and patient centered medical home 
neighborhood practices.
    The patient centered medical home, or PCMH, has several 
important features described in the joint principles of the 
patient centered medical home adopted by ACP, the American 
Academy of Family Physicians, the American Academy of 
Pediatrics, and the American Osteopathic Association.
    These features include a personal physician for each 
patient who is leading a team of individuals trained to provide 
comprehensive care that work together to ensure quality, 
safety, and enhanced access to care, while arranging all the 
patient's health care needs and coordinating care across all 
elements of a complex health system.
    Many insurers are now offering PCMH practices to tens of 
millions of patients, achieving major quality improvements and 
cost savings. It is time to make them more available to 
Medicare patients by providing higher updates to physicians, 
independently certified practices that are PCMH practices.
    Third, Medicare should support the contributions of 
subspecialists and ensure high quality coordinated care through 
collaborative arrangements with PCMH practices.
    This concept called the PCMH neighborhood, offers financial 
and non-financial support to specialty practices that have 
demonstrated that they have the information systems, formal 
arrangements, and other practice capabilities needed to share 
information and coordinate treatment decisions with their 
primary care medical home.
    Congress should facilitate rapid expansion of this model by 
providing higher updates to recognize PCMH neighborhood 
practices.
    At least one major health care accreditation group is now 
in the process of establishing a PCMH neighborhood recognition 
program.
    Fourth, Medicare payment policies should support efforts by 
the medical profession to encourage high value cost conscious 
care.
    For example, ACP's high value cost conscious care 
initiatives help physicians and patients understand the 
benefits, harms and costs of intervention and whether it 
provides good value to patients.
    Through this program, ACP has released clinical advice 
focused on three areas, low back pain, oral pharmacologic 
treatments of Type II diabetes, and colorectal cancer.
    Using a consensus based process, ACP has also identified 37 
common clinical situations in which screening and diagnostic 
tests are used in ways that do not reflect high value care.
    To get the information to patients, ACP and Consumer 
Reports have agreed to a series of high value care resources to 
help patients understand the benefits, harms and costs of tests 
and treatments for common clinical issues.
    Medicare payment policies could support the professional 
societies' efforts to educate and engage clinicians in high 
value cost conscious care by number one, reimbursing physicians 
appropriately for spending time with patients, to engage them 
in shared decision making, and number two, develop ways to 
recognize with higher payment updates physicians who can 
demonstrate they are incorporating advice from their 
professional societies' programs into their practices and 
engaging in the shared decision making with their patients.
    Fifth, Congress should improve Medicare's existing quality 
improvement programs, including the meaningful use standards, 
physician quality reporting system, and e-prescribing.
    The measures, incentives and reporting requirements for 
these programs should be harmonized to the extent possible.
    CMS needs to do a better job in providing timely 
performance data to physicians participating in these programs.
    In addition, these programs should be aligned with the 
regular practice assessment, reporting, and quality improvement 
activities required by a physician specialty board's 
Maintenance of Certification process.
    In conclusion, ACP believes that fundamental reform of the 
Medicare payment system should build upon effective, physician 
led efforts to improve quality.
    The PCMH and PCMH neighborhood practices exemplify this 
approach.
    I would be pleased to answer your questions.

    [The statement of Dr. David Bronson follows:]

    [GRAPHIC] [TIFF OMITTED] 

    Chairman HERGER. Thank you.
    Dr. Weinstein, you are recognized for five minutes.

  STATEMENT OF DR. MICHAEL WEINSTEIN, CHAIR, REGISTRY BOARD, 
            AMERICAN GASTROENTEROLOGICAL ASSOCIATION

    Dr. WEINSTEIN. Chairman Herger, Ranking Member Stark, and 
distinguished Members of the Subcommittee, thank you for 
soliciting input from the physician community as you craft the 
Medicare physician payment reform proposal.
    Reforming the broken Medicare physician reimbursement 
system and giving gastroenterologists the tools to help them to 
provide high quality patient care are top priorities of the 
American Gastroenterological Association.
    My name is Dr. Michael Weinstein. I am here today as 
representative of the 16,000 physicians and scientists who are 
members of AGA, the largest organization representing 
gastroenterologists.
    AGA helped found the Alliance of Specialty Medicine, which 
shares our goals of delivering high quality patient care.
    My medical training is as a gastroenterologist. I am the 
Vice President of Capital Digestive Care, a 56 physician 
practice here in the D.C. area. I have also received on-the-job 
training as a businessman and it seems in recent years as a 
health policy analyst.
    In my brief remarks, I will focus on AGA programs and 
partnerships that could be instructive as Government considers 
how to reform the Medicare physician reimbursement system.
    I must first note that any quality based reimbursement 
system must be based on clinical guidelines and patient outcome 
measures that are developed with physician input and based on 
scientific evidence.
    I refer you to AGA's written testimony for more on our 
approach.
    In 2010, AGA created the Digestive Health Outcomes 
Registry. I currently chair its Management Board. The AGA 
Registry helps users optimize quality of care by giving them a 
secure and scientifically valid way to collect, analyze and 
report clinically relevant data related to inflammatory bowel 
disease and colorectal cancer prevention.
    Payers have shown an interest in using the AGA Registry and 
our newly launched Digestive Health Recognition Program to 
acknowledge and possibly financially reward high quality 
providers.
    We recently launched a program with United Healthcare and 
expect other payers to follow suit.
    AGA advocates that a reformed Medicare reimbursement system 
provide incentives for physicians who report on quality 
measures through outcomes based registries.
    As the health system changes, we see that quality and 
efficiency go hand in hand. Patients and physicians need to be 
wise stewards of health care dollars and ensure that care is 
given to the right patient at the right time.
    To that end, AGA is part of the Choosing Wisely campaign, 
and has identified five common G.I. tests, medications and 
procedures whose necessity should be questioned and discussed 
between physician and patient.
    This program will help physicians be better stewards of 
finite health care resources.
    AGA recognizes that private payers are moving toward 
population based reimbursement. In response, we are developing 
alternative payment models.
    For instance, AGA is working with a claims case logic 
company to develop a colonoscopy bundled fee. AGA physicians 
are developing components of the bundle including screening, 
diagnostic and therapeutic colonoscopy, time frames, 
complications, and associated carve out's.
    This will help physicians to demonstrate value and 
negotiate for the services they provide to a population of 
patients.
    AGA is also developing clinical service lines to help 
physicians with population management. Our vision is to collect 
guidelines, measures, payment bundles, and other resources to 
create a ``how-to manual'' for common G.I. diseases.
    Bundles will sync with electronic medical records, 
registries, PQRS, and other systems, providing physicians tools 
to show how coordinated care can be delivered, measured and 
improved.
    In closing, AGA applauds your efforts to move physicians to 
a more viable reimbursement system that rewards physicians for 
improving the quality of care they provide to their patients.
    AGA shares this goal and stands ready to work with you. 
Thank you.

    [The statement of Dr. Michael Weinstein follows:]

    [GRAPHIC] [TIFF OMITTED] 

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

  STATEMENT OF DR. PETER MANDELL, CHAIR, AMERICAN ACADEMY OF 
                ORTHOPAEDIC SURGEONS COUNCIL ON
                            ADVOCACY

    Dr. MANDELL. Good morning, Chairman Herger and Ranking 
Member Stark. Nice seeing both of you again, and good morning 
to the rest of the distinguished panel.
    Thank you for the opportunity to testify on behalf of the 
American Association of Orthopaedic Surgeons, which represents 
over 18,000 actively practicing Board certified orthopaedic 
surgeons nationwide.
    I am Pete Mandell, Chair of the AAOS Council on Advocacy, 
and our organization is very much appreciative of the 
opportunity to offer our ideas on how Medicare physician 
payment reform can be carried out.
    As the Committee knows very well, finding a long term 
sustainable solution for the Medicare physician payment system 
is a huge undertaking. We believe that a commitment to the 
development and adoption of best practices that provide high 
quality care for musculoskeletal patients while remaining cost 
effective is the best way to achieve that solution.
    We are already involved in several quality initiatives that 
can be used by Congress as a model for future payment reforms.
    These initiatives include the development of clinical 
practice guidelines, appropriate use criteria, a joint registry 
program, greater patient participation in their own health care 
decisions.
    We believe the current fee for service system, although 
appropriate for certain types of health care services, is not 
the most efficient system for many services and procedures.
    We also believe that policy reforms that provide incentives 
for the delivery of high quality health care should be coupled 
with payment reforms that include greater patient involvement.
    There is no one size fits all when it comes to creating new 
payment models for Medicare. Each of the following types of 
payment systems has merit: capitation, episodes of care, tier 
based payment systems, and the traditional fee for service 
model.
    Whatever methods Congress chooses, we strongly support 
efforts to incorporate quality, efficiency, and payment 
outcomes into the Medicare physician payment system.
    Congress should provide financial incentives that reward 
higher quality care based on appropriately risk adjusted 
patient centered measures of health care outcomes. Risk 
adjustment is essential to account for medical and social 
problems, other patient co-morbidities, that are beyond the 
provider's control.
    These would include obesity, non-compliance with treatment 
recommendations, tobacco and alcohol use, to name just a few.
    Also, quality measures should be utilized to develop a new 
physician payment model but only if it is developed with the 
advice of specialty specific input from all physician 
specialties who are impacted by the payment system.
    The payment system should reward physicians for developing 
medically innovative treatments that increase quality and 
reduce costs.
    An orthopaedic example is orthoscopic surgery, which in the 
past had required open procedures and several days in the 
hospital. Tying payment to quality and to the savings generated 
by medical innovation will reduce overall Medicare costs and 
drive the innovation.
    Coordinated care models offer another approach for payment 
and delivery reform. An example is the episode of care where a 
single payment covers all involved providers, but such 
arrangements may carry unintended consequences including 
denying care to higher risk patients.
    The AOS helped form the American Joint Replacement Registry 
for total hip and knee data collection and quality improvement. 
Its goals include collecting device information and monitoring 
outcomes of total joint replacements throughout the U.S., 
creating real time survivorship curves to serve as trip wires 
that detect poorly performing implants and providing regular 
feedback to surgeons, hospitals, and implant manufacturers 
concerning their relative performance compared to peers.
    All of the above quality improvement activities have been 
developed and/or supported by the AOS, and are changing the 
face of orthopaedic practice nationwide.
    Patients can become more involved with seeking out 
appropriate high value care. First, in the absence of true SGR 
reform, Congress should permit the private contracting between 
patients and providers. This will help providers close the gap 
between inadequate Medicare payments and the ever increasing 
costs of providing services to seniors.
    Second, Congress should consider enabling Medicare 
beneficiaries to assume greater responsibility by cost sharing 
for the Medicare program with protections for low income 
beneficiaries.
    There is a broad range of options that policy makers can 
use and consider for enhancing benefit sharing.
    We believe the Medicare system needs to be transformed from 
its current emphasis on paying for services regardless of 
quality or cost to a system that provides meaningful and 
sustained incentives for high quality, innovative and cost 
effective care.
    Accomplishing this goal will require the cooperation of 
Congress, CMS, physicians, and patients.
    However, we believe that it can be accomplished and that 
now more than ever is the right time to concentrate our efforts 
in this direction.
    Thank you for allowing me to participate in the hearing 
today, and we look forward to working with all of you in the 
future.
    [The statement of Dr. Peter Mandell follows:]

    [GRAPHIC] [TIFF OMITTED] 

    Chairman HERGER. Thank you.
    Mr. Sharp, you are recognized.

       STATEMENT OF ARIC SHARP, CEO, QUINCY MEDICAL GROUP

    Mr. SHARP. Thank you, Chairman Herger, Ranking Member 
Stark, and Members of the Committee.
    My name is Aric Sharp, Chief Executive Officer at Quincy 
Medical Group.
    The need for an SGR solution cannot be stressed enough. 
Every year physicians face uncertainty, an inability to budget, 
and at times having to spend significant resources to address 
retrospective patches.
    As the Committee works on the SGR issue, we believe 
incentivizing high performance can and should be a part of the 
solution. At a minimum this would include measuring and 
improving quality, improving care coordination, utilizing 
information technology, and demonstrating the efficient 
provision of services.
    These four attributes guide much of the activity at Quincy 
Medical Group and other multi-specialty groups and systems 
throughout the country.
    In Quincy, we participate in the PQRS program and the e-
prescribing incentive program. We actively measure patient 
satisfaction through a standardized CG cap survey, as well as 
through opinion metered Kiosk devices in our offices.
    However, we are not just measuring quality. We are also 
aligning it with our revenue streams. We work with Humana on a 
Medicare Advantage product that provides reimbursement for our 
patient centered medical home, for 12 quality metrics, and for 
shared savings.
    Through the Iowa Health System, Quincy participates in the 
Medicare shared savings program. That program's 32 quality 
measures introduce an even higher level of rigor.
    We are also nearing completion of an intensive medical home 
contract with Blue Cross and Blue Shield of Illinois.
    Altogether our combined efforts across all payers will link 
over 75 percent of our revenues to both quality and cost 
savings.
    Quincy's medical multi-specialty medical group model 
utilizes physician led committees and work groups so that we 
can leverage good care coordination into quality.
    For example, Quincy holds the highest patient centered 
medical home recognition from NCQA, Level 3. We also have the 
largest number of patient centered medical home providers in 
the State of Illinois.
    We believe there is strong merit to follow the lead of 
commercial insurers by incentivizing this type of care 
coordination.
    Quincy is also on track to meet EHR meaningful use criteria 
for all of its physicians. However, only half of our physicians 
are even able to receive the intended meaningful use incentive 
as well as PQRS and e-prescribing incentives due to a technical 
oversight.
    H.R. 3458 would fix that issue, and it would end that type 
of discrimination in quality programs against rural physicians. 
That bill has bipartisan support, and is strongly supported 
from medical and hospital associations, providers, and leaders 
across the country.
    Therefore, we respectfully urge swift passage of H.R. 3458.
    You see, the reason it is so critical to have all 
physicians in both urban and rural areas on EHRs is because it 
is a prerequisite to advanced solutions, like patient 
registries, patient portals, tele-health solutions, and 
predictive analytics, through products like Explorus and 
Anseta.
    At Quincy, we are already using or preparing to launch 
initiatives in each of those advanced areas.
    Finally, we believe high performance includes demonstrating 
the efficient provision of services through cost reduction. 
However, it is important to keep in mind there are geographic 
differences in measuring baseline cost efficiency across our 
country, and that fact cannot be overlooked within any 
successful SGR solution.
    In conclusion, solutions must work for all physicians and 
all specialties and in all parts of the country. We believe 
taking an approach of shaping the path could be the most 
successful, and that shaping can begin with appropriate 
incentives centered around quality and technology for high 
performing multi-specialty groups and systems.
    Thank you.
    [The statement of Mr. Aric Sharp follows:]

    [GRAPHIC] [TIFF OMITTED] 



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

 STATEMENT OF DR. JOHN JENRETTE, CEO, SHARP COMMUNITY MEDICAL 
                             GROUP

    Dr. JENRETTE. Thank you, Chairman Herger, Ranking Member 
Stark, and members of the Health Subcommittee for inviting me 
today to testify regarding physician organizations' efforts to 
promote high quality care.
    I am pleased to testify today as Chief Executive Officer of 
Sharp Community Medical Group and as a physician myself trained 
in family medicine and geriatrics.
    By the way of background, Sharp Community Medical Group is 
the largest IPA in San Diego County. We have a network of more 
than 200 primary care physicians and over 500 specialists, and 
we care for more than 170,000 patients, both HMO and Medicare 
Advantage, as well as commercial HMO, our new commercial ACO 
products, and we are one of the six pioneer ACOs in the State 
of California.
    I also address you today as Chairman of the Board of 
Directors for the California Association of Physician Groups, 
CAPG, that represents over 150 physician multi-specialty 
medical groups and independent practice associations.
    Our members serve over 15 million Californians, 
approximately one-half of the state's insured population.
    What are the most important efforts to promote high quality 
care for the patients we serve at Sharp Community Medical Group 
as well as the 150 medical groups and IPAs at CAPG?
    I must begin as many of the other speakers have with the 
certainly known to you, move away from payment systems that 
reward volume rather than value, and that is much of the fee 
for service system that we currently live under.
    Groups like Sharp Community Medical Group have moved to 
global payment methods that allow services and systems of care 
to be established and built so that we are accountable for a 
population of patients, for quality, outcome, and excellence in 
care.
    We have learned that taking care of patients at the right 
time and at the right setting and utilizing team based 
approaches to care, examples of which I could offer you now and 
later, results in better health and prevention, improved 
management of chronic disease, and also ultimately lowers 
costs.
    Payment methodologies that incentivize physicians and other 
health care workers to provide the coordinated, accountable 
care should be forward in your thinking.
    The second effort to promote quality is the alignment of 
incentives at the physician level that results in the quality 
outcomes or value that we are seeking.
    Sharp Community Medical Group has developed programs and 
incentives to support and improve quality for our patients for 
over 20 years, and it has not always been easy.
    We are focused through efforts like the California 
Integrated Healthcare Association, IHA, which is a 
collaborative pay for performance program in California, multi-
stakeholders, including plans and medical groups, that promotes 
quality improvement, accountability, and affordability of 
health care in the state.
    Sharp Community Medical Group is also focused on the five 
star quality metrics of our Medicare Advantage patients, the 33 
quality measurements of our pioneer ACOs, and similar metrics 
and goals of our commercial ACOs.
    Over the years, Sharp Community Medical Group has expanded, 
evolved and gained sophistication in data collection and 
aggregation to create useful reports and registries that assist 
our physicians in improvement efforts in prevention, management 
of chronic disease, recognizing gaps in care, and in 
controlling overall costs.
    In addition, our doctors have supported transparency and 
sharing their results with each other on physician specific 
report cards. How do they compare with each other on 
prevention, like mammography or colon cancer screening, or how 
well they manage their patients with diabetes.
    This has enhanced their work together, to learn from each 
other, and to continue to improve their performance.
    Physicians value accurate, comparable and reliable 
information to help them improve. The final effort to promote 
high quality care, on which I will close, is that of health 
information technology.
    Electronic health records, health information exchanges, 
HIEs, meaningful use are all steps in the right direction to 
collect, aggregate and share information across and among 
providers of care. They are, however, only beginning to reach a 
level of usefulness for physicians to be better and to care for 
patients.
    Many physicians still see EHR as fancy paper records 
containing volumes of information that is hard to digest and 
use successfully.
    They will continue to struggle with this until such time as 
we can easily share information across a common platform and 
the electronic systems develop the intelligence or active 
clinical decision support that helps doctors, nurses, 
pharmacists and other health care providers use the information 
wisely.
    Again, I thank you for the opportunity to weigh in on this 
very important topic this morning and look forward to your 
further questions and dialogue. Thank you.


    [The statement of Dr. John Jenrette follows:]

    [GRAPHIC] [TIFF OMITTED] 

    Chairman HERGER. Thank you, Dr. Jenrette. I want to thank 
each of our panelists for your testimony.
    My first question is for the entire panel. The efforts of 
each of your organizations to use the evidence as to what works 
to develop and disseminate quality standards that physicians 
can put into practice is commendable.
    Do you believe that it is appropriate to incorporate 
quality and efficiency into the Medicare payment system if 
physicians play an integral role in determining the metrics and 
the process?
    Dr. Riddles.
    Dr. RIDDLES. Yes, sir, I certainly do. That is the only way 
that we are going to be able to incent and work towards value, 
that the whole system has to move that way.
    As we talked about initially, coming up with common data 
elements, common information, and a way to process that and tie 
that together, as my colleagues here have mentioned, is 
critical, so that it is going to be seen at not only the local 
and regional but national level so we can understand the 
patients and how best to apply the medical knowledge that we 
have in the way of evidence based things to help that out. Yes, 
sir.
    Dr. BRONSON. Again, yes, sir, I agree with Dr. Riddles, but 
would add the importance of physician leadership and the 
leadership of the professional organizations in helping the 
penetration of these ideas out to the medical community in an 
effective manner.
    Chairman HERGER. Thank you.
    Dr. WEINSTEIN. As well, certainly agree. The AGA has worked 
closely with NQF and the other AQA in developing scientifically 
based, evidence based guidelines. I think it certainly helps 
with physician acceptance of guidelines, and physician 
acceptance of measures to control costs and improve quality are 
far more accepted when they are developed by their colleagues 
and peers using a process that involves evidence based 
medicine.
    Chairman HERGER. Thank you.
    Dr. MANDELL. Mr. Chairman, the answer is definitely yes. In 
addition to clinical practice guidelines, we do not have a lot 
of information and it is certainly very important sometimes in 
very expensive areas, so we are also developing appropriate use 
criteria for that. They take the data that is there and then 
combine that with what is called an ``expert opinion'' to come 
up with the best available recommendations, and that would go a 
long way towards increasing value as well.
    Chairman HERGER. Thank you.
    Mr. SHARP. I would simply echo the ``yes'' with all of 
these folks for the same reasons. I think it needs to be 
physician led.
    Dr. JENRETTE. It sounds like you have consensus here, as I 
would also support and as I have mentioned, I think physicians 
when they have an opportunity to weigh in on the data, on the 
guidelines, and have input, you will get the buy in that we are 
all looking for and move us in the right direction.
    Chairman HERGER. Thank you. Dr. Mandell, your organization 
supports tier payments so that physicians who provide higher 
quality care receive higher payments.
    Do you believe the evidence and methods exist to make 
determinations that condition payments on outcomes?
    Dr. MANDELL. In certain areas, there is a lot of good 
evidence to that, to support that concept. As I mentioned a 
minute ago, in areas where we do not have high quality evidence 
to provide clinical practice guidelines, the use of appropriate 
use criteria could be used for the tiering process, and 
basically as I am sure you understand, the tiering process 
would say for example, if you did not report to the registry, 
if you did not follow the appropriate use criteria for whatever 
reason, you get paid at a certain level. If you do support and 
utilize these things, you get paid at a higher level.
    There may be reasons why individual physicians would not 
want to do that at first. I would suspect that over time 
everybody would follow all the guidelines and go to the higher 
payment level.
    Chairman HERGER. Thank you. Dr. Weinstein, your 
organization generally supports incorporating quality and 
outcomes into the Medicare payment system. To that end, you 
have developed robust quality measures.
    Should these measures differentiate among physicians based 
on their geographical location?
    Dr. WEINSTEIN. I think at the beginning of the development 
of guidelines, the issues that we are tackling are relatively 
universal and do not really depend upon the geography.
    If you get deeper into nuances, that might change, but I 
think in general, the quality guidelines that are established 
should be applied throughout all areas, rural, urban, whatever.
    To that end, development of a registry allows small groups 
and large groups to participate with any web access, either 
entering information in manually or through electronic data 
interchanges.
    We do not really see any difference in the geography, 
particularly if the guidelines are developed with input from a 
wide range of physicians.
    Chairman HERGER. Thank you. Mr. Stark is recognized for 
five minutes.
    Mr. STARK. Thank you, Mr. Chairman. I thank the panel for 
participating with us today.
    Dr. Bronson, you mentioned medical home, and I think that 
is an interesting concept that people are talking about. What I 
am wondering, I am aware that the thoracic surgeons over the 
past five or ten years have collected information on virtually 
every thoracic surgical procedure done by the members of that 
organization.
    It has resulted in a best practices recommendation 
generated by the specialty so that if somebody has to have a 
heart transplant or something else, they can look up and see 
what all their colleagues feel are the best practices.
    Do any of you represent a specialty that does a similar 
collection of data?
    Dr. MANDELL. We are talking about the joint registry, and 
in that sense, we are collecting data for total joint 
replacements.
    Mr. STARK. We think it would be a good idea that every 
physician be required to keep electronic medical records. 
Arguably, they will have to be reimbursed for the cost of the 
equipment, programming and learning.
    New medical students will not have that problem. It will be 
taught to them.
    We would then probably end up hopefully with a program like 
VISTA, which I think is universally acclaimed as the finest 
existing medical record program in the country.
    It is astounding to me, and we are trying, Dr. Riddles, to 
see if we can straighten this out, but VISTA cannot talk to the 
Department of Defense. You go figure. If you are on active 
duty, you cannot get the information, but as soon as you 
retire, it is plugged in.
    Maybe that is just bureaucracy that does not want to do it. 
It does not make any sense at least to me that these records 
cannot be incorporated, and further, that any of us ending up 
in an emergency room 1,000 miles from home, if we have our 
password or some way of identifying ourselves, it would seem to 
me it would be valuable in terms of outcome and costs for the 
emergency room people to punch in and get medical records as we 
get in VISTA.
    Is there anybody who thinks we should not have a system 
like that?
    Dr. RIDDLES. If I could offer just a comment, sir. I think 
you are spot on, there is nothing magic with electronic things, 
and that would really disappoint my children, but there is not.
    The big piece is how you use it. It is a tool. If it is not 
interconnected and it is not integrated, it is not of any value 
to you. That is again part of what we and I think all the 
members here have been saying, we have to have the registers, 
we have to have the common databases, so we have the ability to 
use it. It is huge when you have that capability.
    Mr. STARK. We are the only industrialization in the world 
that does not have it, I might add. I look to Canada, for 
instance, and let's use pharmaceuticals. That is pretty easy. 
Aspirin is aspirin. Tylenol is Tylenol. You do not get into a 
question of professional differences.
    Would it not be helpful, it certainly would to me when I go 
to see my ortho whether I get a needle in the back or Tylenol, 
I know what I want, but it would be helpful to see what the 
results were without regard to cost and without cost to 
recommendation, but to see what happens to a group of people 
with problems or any other specialties that you all may 
represent. I just hope we can get there.
    Dr. Weinstein.
    Dr. WEINSTEIN. I will make a point. We practice different 
medicine. The way we record data, the efficiency of our medical 
records obviously very much depends on what specialty we are 
in, the amount of information we want to record.
    The important thing that would help us is the glue that 
allows all of our systems to talk to each other. That is where 
the standards have not been set and should be part of----
    Mr. STARK. It is one of the areas that some of you, more 
than just a couple of you is out of medical school, are going 
to have to re-learn. Kids in medical school will learn it. That 
will be the inconvenience. You are going to have to figure out 
if there is an universal system how to enter my weight and 
blood pressure, what line you put it on, a pain in the 
sacroiliac, but a pain.
    Eventually, it would seem to me, and I think in less than 
ten years, we will have those records for you all to use at 
your convenience.
    I appreciate the interest that many of you have in that 
field and letting us know about anything we can do to promote 
that.
    Thank you, Mr. Chairman.
    Chairman HERGER. Mr. Johnson is recognized.
    Mr. JOHNSON. Thank you, Mr. Chairman. Drs. Riddles, 
Bronson, Weinstein and Mandell, although we have discussed the 
fact that reforming the current payment system cannot be an one 
size fits all endeavor, we still have to ensure that reform 
payment systems work in various physician's practice 
arrangements and in geographic regions.
    It seems to me there are a lot of differences just among 
you guys, notwithstanding all over the country.
    What are your organizations doing to support small 
practices including those in rural areas?
    Dr. BRONSON. The College is very active in working to 
support small practices. Almost 50 percent of our members 
practice in small practices. We have developed programs to help 
small practices become patient centered medical homes, to go 
through that process, and the tools and other products to help 
them with the HR choice and utilization.
    We have a wide variety of educational programs to help 
staffs get better at supporting the practices.
    Mr. JOHNSON. Have you seen any improvement? I know a couple 
of doc's in our area that do not want to use the system. They 
would rather use handwritten records.
    Dr. BRONSON. Certainly, there is a generation of physicians 
that will probably--I am probably one of them--I have been 
using electronic medical records for ten years. I learned how 
to do it.
    As Congressman Stark mentioned, the younger generation will 
be using electronic medical records. We have to prepare for the 
transition over that time and increasingly practices will 
become electronic, and the electronic systems will become more 
user friendly as well.
    Dr. WEINSTEIN. I would add one of the main reasons that our 
group got together, 56 physicians, was the cost of information 
technology, to be able to share the cost of the start up of 
information technology. That is a hindrance for a small group.
    The high tech stimulus money may be fine for a group of 56, 
but it does not work for a group of two or three. The cost 
certainly of implementing IT far surpassed the stimulus dollars 
for small groups.
    Mr. JOHNSON. I have seen it not work in hospital systems 
either. Right in our area, Methodist and Baylor do not talk to 
each other. Their machines do not talk to each other. They have 
different systems.
    Dr. WEINSTEIN. That is the standards I was talking about, 
the standards that allow different systems to talk. Where there 
are no standards, then systems are not required to----
    Mr. JOHNSON. Are you saying the United States Government 
ought to demand that they all have the same standards?
    Dr. WEINSTEIN. That the communication standards between 
information systems should be defined by the United States 
Government so any provider of IT services, be it a hospital, 
office or whatever, have to be required to have the standard to 
talk to each other. If they cannot talk to each other, they 
should not receive certification.
    Mr. JOHNSON. You like Government control of your practice?
    Dr. WEINSTEIN. I did not say Government control. I said----
    Mr. JOHNSON. That is what it is if we advance something 
like that.
    Dr. WEINSTEIN. I do not want to argue. We all submit claims 
the same way. The way we submit claims to Medicare has been 
defined by CMS. The only way we can all submit claims to one 
entity is if somebody defines the way the data is transmitted.
    Mr. JOHNSON. Dr. Mandell.
    Dr. MANDELL. I just wanted to point out that the market so 
far has sort of decided what the basic electronic medical 
record was going to look like, and because there are not too 
many orthopaedic surgeons, I mentioned 18,000, a little more 
than that, to practice, the systems out there now are not very 
friendly to what we do.
    We do not take blood pressures very often. We do not check 
for blood glucose and things like that, which are some of the 
things that may be required.
    Standards would be a nice idea but hopefully when they are 
developed, they should be developed, they will take into 
account the input of all the specialty societies as well, and 
to that end, we have our own committee at the American Academy 
of Orthopaedic Surgeons that has been working with the 
regulators to try to get them to understand all this.
    Mr. JOHNSON. You guys are making a lot of progress. You 
still going to use Titanium in knees and hips?
    Dr. MANDELL. When it is appropriate, yes, sir.
    Mr. JOHNSON. I have a couple. Thank you. Dr. Weinstein and 
Dr. Mandell, it is encouraging that both your groups recognize 
the need to address all types of practices in developing your 
clinical registries.
    Given the value of such data and quality improvement and 
performance, how can we incentivize more physicians to 
participate in these efforts?
    Dr. WEINSTEIN. I think as we talk about reforming the 
payment system, basing payment on larger and larger amounts of 
the payment on participating in quality measures and achieving 
levels of value and quality, we will get more and more people 
to participate.
    Dr. MANDELL. I mentioned earlier the tier payment model, 
which is one of the possibilities here, requiring folks to do 
that, to report to registries in order to get the higher levels 
would be appropriate.
    I think as time goes on, as some of these websites that 
rate doctors in the Internet now become more popular, patients 
will ask their doctors, are you reporting your results to the 
registry, can I see those results, all that sort of thing. It 
is just going to be what the market wants.
    Mr. JOHNSON. Thank you, sir. Thank you, Mr. Chairman.
    Chairman HERGER. Mr. Pascrell is recognized.
    Mr. PASCRELL. Thank you, Mr. Chairman. We talk about 
rewarding physicians who deliver high quality care. The health 
care reform bill is already actually testing new payment and 
delivery systems. I think each of you are aware of that.
    I have said many times health care reform is entitlement 
reform, and it will help us to transform the health care 
system.
    Today we are here to specifically focus on physician led 
quality initiatives.
    My first question is to you, Dr. Mandell. Many of you may 
know that in the last Congress we introduced legislation to 
create a national knee and hip registry. The intention of the 
legislation was not only to focus on improving patient 
outcomes, but to address issues within the industry itself.
    In 2007, five of the nation's biggest makers of artificial 
hips and knees agreed to pay $311 million in penalties to 
settle Federal accusations that they used so-called 
``consulting agreements,'' better known as ``bribery,'' and 
other tactics to get surgeons to use their products, regardless 
of their effectiveness.
    It was part of a deferred agreement with the U.S. 
Attorneys, not unlike the deferred prosecution agreements with 
the Wall Street folks, Enron, and all those people, AIG. Nobody 
ever brought to trial. No charges ever made. The cost of doing 
business, the penalty they paid. That is it.
    Let me be clear. These five companies make a majority of 
the artificial hips and limbs here in America. Obviously, when 
a majority industry is accused of wrong doing, we need to hold 
that industry accountable.
    Right, Mr. Chairman?
    Dr. Mandell, I understand that the American Academy of 
Orthopaedic Surgeons is currently launching a joint replacement 
registry to promote patient safety and hold the industry 
accountable.
    Originally, the goal of your organization was to recruit 90 
percent of all the hospitals conducting knee and hip implant 
procedures to participate in the registry by the end of 2015, 
if I am not mistaken.
    Dr. Mandell, can you speak to the development of the 
registry, tell me if it is on track to meet its current 
registration goals, and then can you expand on the importance 
of registries for our health outcomes that most of you talked 
about today?
    Dr. MANDELL. Let me take the second part first. It is very 
important for health care outcomes to have registries. The rest 
of the industrialized world has such registries. They have 
proven very useful in finding products that were not working as 
well as originally designed or hoped.
    We have been a little bit slow in this country to get on 
that band wagon. It took us something like ten years to get to 
the point where we are now with the American Joint Replacement 
Registry.
    We have gotten the infrastructure in place. We have gotten 
some hospitals signed up. I am not on the Board of the AJR, so 
I do not know exactly what their projections were as to when 
they would get to 90 percent of the hospitals. I am sure 
eventually they would like to get 100 percent of the hospitals.
    We are working towards that. We have not detected any 
problems, if that is one of the questions you are asking so far 
with the products that have been registered.
    We had some difficulty getting some hospitals to put some 
of the data in, things as simple as laterality. You might ask 
why it matters whether it is a left total hip replacement or 
right total hip replacement that is done.
    And the answer is, when you look at the data, that a second 
surgery has been done. If it is done on the same hip that the 
first surgery was on, that is a completely different issue than 
if it was done on the opposite hip, obviously. Folks often have 
bilateral hip replacements.
    So little things like that that you think would be fairly 
easy to enter in the data bank are proving somewhat difficult. 
We also had a problem with getting folks to agree on bar coding 
of various devices so that it could be scanned into the 
electronic records.
    For reasons that I do not understand, the folks here in 
D.C. who were supposed to come up with those guidelines for 
using the bar codes had a lot of trouble doing it. I think they 
just recently came out with at least some proposals along those 
lines, so that is going to help out a lot as well.
    So we are working hard. We may be a little bit behind in 
achieving our goals. But we believe we can get there.
    Mr. PASCRELL. Thank you, Mr. Chairman.
    Chairman HERGER. Thank you.
    Mr. Reichert is recognized.
    Mr. REICHERT. Thank you, Mr. Chairman.
    I have heard a lot of phrases and words used--physician-
led, patient-centered, quality care, streamlined, values-based, 
performance-based, performance measures. All of these things, I 
think, everyone on the committee agrees with, and everyone on 
the panel. This should be easy. It is certainly not.
    I have only been on this Committee four years, and we have 
been talking about this, and I know you have been involved and 
engaged in this in your entire career, most likely. These are 
things that the patients out there--all of us at some time or 
another are a patient--understand, grab onto, all agree with, 
and want to hear the discussion on. But the devil is in the 
details, as they always say.
    So from the world I come from, trying to evaluate--I was a 
police officer for 33 years; trying to evaluate cops is like 
trying to evaluate doctors and teachers--when you are dealing 
with people, it is not widgets and medical devices and those 
sorts of things. I hear you saying that. Hard to put 
performance measures on cops. But some of the things that we 
would look at is kids going back to school. Are they staying in 
school? Are the streets clean? Graffiti? You know, those sorts 
of things.
    And Dr. Weinstein, in your testimony you mentioned that 
physicians are more comfortable being measured on things they 
know are important to their patients. And you mentioned that 
your organization is developing a quality measure set that 
currently includes 24 measures.
    Would it be beneficial for Medicare and other payors, if 
they use this uniform set of measures established by the 
professionals providing the care, would they include some of 
those hard-to-grab-onto sort of things that I described in 
other worlds when you are trying to evaluate people working 
with people?
    Dr. WEINSTEIN. The AGA's measures that we have worked on, 
the guidelines that we have worked on, have tended to be in 
those areas where there are large amounts of scientific data 
and agreement about what is best practices. Obviously, we 
cannot tackle everything. But if you look at where most of the 
dollars are spent, we can define in colorectal cancer care 
within inflammatory bowel disease those high-dollar, high-
volume areas where there is a sufficient amount of scientific 
data and agreement amongst everybody as to what would be best 
practices and what would be a good outcome.
    I can get you other information about the other measures we 
are developing.
    Mr. REICHERT. So is your answer yes? Would it be beneficial 
to Medicare?
    Dr. WEINSTEIN. I think it would be very beneficial to 
Medicare, yes.
    Mr. REICHERT. Thank you. Well, there are some terms that I 
have heard for the first time in this testimony, and one of 
them particularly caught my attention, by Dr. Mandell. It is a 
phrased you used, ``appropriately risk-adjusted.'' What does 
that really mean, appropriately risk-adjusted? I think that if 
you use your imagination a little bit, that can be sort of a 
scary thought in some minds of some patients.
    Dr. MANDELL. Well, patients come in all sizes and shapes 
and statuses of health. And the treatment is different for each 
of these groups. We talk about clinical practice guidelines 
based on high-quality evidence. To get the high-quality 
evidence, you have to control for everything except a 
particular variable that you are looking at.
    So let's say if you are studying hip replacements and 
comparing two different types, you want to know whether 
everybody is a smoker or is not a smoker; otherwise, that could 
be a variable. You want to know whether or not everybody has 
diabetes or does not have diabetes; that could be another 
variable.
    Mr. REICHERT. I think one of the things that sort of, 
maybe, is the kind of scary thought here is the older you get, 
how does that play into adjusting risk?
    Dr. MANDELL. Well, if you are on the mean, this big bell-
shaped curve that most biological systems, including human 
beings, usually fit on, we take that into account when we 
develop our processes in the first place. If you are out at the 
tail ends of the bell-shaped curve, at the margin, so to speak, 
that is where we get into trouble in terms of trying to cost 
out, let's say, and resource out how we can treat those folks.
    If you are old and you have heart disease and you have 
cancer, it is a different surgical procedure than if you are 
just old, things of that sort. So trying to risk-adjust for all 
of this is an important thing to do if you are going to give a 
certain amount of money for a certain procedure.
    Dr. WEINSTEIN. I will make a point that the danger in not 
risk-adjusting is the feeling that if you pay the same amount 
for every patient, there will be cherry-picking. Why would a 
physician want to take care of a patient who is more sick when 
he can get paid the same amount for taking care of a patient 
who is less sick? So the need for some sort of risk adjustment 
has to be down to the individual basis.
    Mr. REICHERT. Thank you, Mr. Chairman.
    Chairman HERGER. Thank you.
    Mr. Gerlach is recognized.
    Mr. GERLACH. Thank you, Mr. Chairman.
    Dr. Riddles, in your written testimony, page 8, under the 
category of innovative approaches to dealing with these issues, 
you state that the payment system should take innovative 
practice strategies into account and encourage physicians and 
health care organizations to implement new processes and 
procedures that create cost savings while simultaneously 
improving quality and keeping patients safe.
    One of the things that the Government Accounting Office, 
GAO, put forward about a year ago was that in the Medicare 
program, which is about, what, $540 billion a year in 
expenditure, in that year of 2010 there were $48 billion of 
improper patients in the system.
    Could be erroneous and mistaken payments. Could be phantom 
billing. Could be identity theft of UPIN numbers for physicians 
and Social Security numbers of patients. Could be fraudulent 
durable medical equipment billing, et cetera, et cetera. But 48 
billion, almost 50 billion a year, in improper payments times 
10 is 500, half a trillion dollars, over a 10-year period, 
money that could obviously be used for much better purposes, 
including dealing with physician reimbursements.
    So my question to you, as representatives of different 
physicians' groups, have you thought about other approaches 
from a technological standpoint to deal effectively with 
phantom billing, identity theft of physicians and patients? And 
in particular, have you thought about utilizing what in the 
Department of Defense they are using, a common access card, a 
smart card, that from a technological standpoint better 
identifies the provider and the user or the purchaser of a 
certain kind of service to cut down on these kinds of 
fraudulent or improper patients within the system?
    Are you, individually or collectively, looking specifically 
at technologies that can help do that so that, in turn, the 
savings generated from that can certainly be utilized to make 
sure physicians get the kind of reimbursements they deserve to 
care for our Medicare seniors?
    So I will start with Dr. Riddles, but would then like to 
have any of the other gentlemen provide input as well on that 
question.
    Dr. RIDDLES. Sir, the simple answer is yes. And that all 
lies in innovation. We have to come up with things that we do 
not do today that are possible and apply those to the system 
because, as you quite rightly point out, there is a lot of 
opportunity to save cost and expense here.
    So those type of things is what we are talking about, to 
support innovation, doing things differently, not just doing a 
little more or a little less of what we are doing now. We have 
to considerably change it, whether it be smart cards or it 
could be something DNA-based identification.
    I think we have talked a little bit here about the need for 
information management systems that not only exist in 
individual little islands, if you will, but are tied together 
so that you see that if somebody billed for a certain 
procedure, that that patient was in fact seen at that location 
and those diagnoses matched--so that yes, sir, the answer is 
yes.
    Mr. GERLACH. Okay. Great. Any other gentlemen on that 
question? Nobody?
    Dr. BRONSON. I would answer. We are very supportive of 
using innovation to make sure that payments are appropriate and 
payments are fair and payments are actually honest. And we have 
no disagreement with that. We do not have a robust program to 
get there, but we would be supportive of looking at that.
    Mr. GERLACH. Okay. Thank you.
    Sir?
    Dr. MANDELL. Yes. I do not think we have thought about this 
very much. It sounds like a very interesting idea. I think if 
we did consider this concept, it was probably in the context of 
electronic medical records, with the thought that having 
everything in the system, so to speak, would make it easier to 
tell who was doing what.
    Mr. GERLACH. Well, right now, as you know, we have a pay-
and-chase kind of system. A payment is made, a reimbursement is 
made, and then go back and chase after that payment if CMS 
decides that somehow it was improperly issued.
    Whereas you can, through a smart card or common access card 
system, prevent that kind of thing very significantly by 
verifying the appropriateness of that physician providing the 
care up front through a biometric component to a card as well 
as the proper identification of the senior through that access 
card, particularly where the senior does not have his or her 
Social Security number on the card, which is then subject to 
identity theft, which then complicates and creates all sorts of 
problems, too.
    So it is technology being used in many other places around 
the world, including even here in the United States with the 
Department of Defense. And yet we cannot seem to take what is 
out there from a technological standpoint and employ it in a 
very realistic way to cut down on very significant loss of 
expenditures in the program.
    Anybody else on the point?
    [No response.]
    Mr. GERLACH. If not, thank you very much, Mr. Chairman.
    Chairman HERGER. Thank you.
    Mr. Kind is recognized for five minutes.
    Mr. KIND. Thank you, Mr. Chairman. And I want to thank our 
panelists for your testimony here today. I really think this is 
the Holy Grail of what we need to be focused on when it comes 
to health care reform and how successful we ultimately are in 
reforming the system that has been in desperate need. So we 
appreciate your insight and help with this matter. I think it 
is going to require a true partnership to make this work well.
    I, along with Senators Klobuchar and Cantwell, got included 
under the Affordable Care Act the value-based payment modifier 
that many of you may be aware of. It is going to start being 
implemented in 2015 for physician payments, fully implemented 
in 2017. CMS came out with a proposed rule in early July of 
this year.
    So any ideas or thoughts or concerns that you might have or 
your membership might have in regards to that value payment 
modifier, my office will certainly be interested in hearing 
back from you. We do not have to get into it in any detail 
today. But it is out there, and it is happening, and it is 
going to have an effect as far as driving to a more value-based 
reimbursement system.
    Obviously, the Institute of Medicine, the National Academy, 
again under the Affordable Care Act, has been tasked to change 
the fee-for-service system in Medicare to a fee-for-value 
payment system. This is meant to build upon the seminal work 
that they did, especially in 2004 and 2005, on how best to do 
that.
    But they are being asked this time to produce an actionable 
plan of what that would look like. So I would certainly 
encourage your groups, too, to be in touch with the Institute 
of Medicine panel. It is a very distinguished panel that has 
been comprised to do this, to give them some feedback. And I 
know some of you have already.
    But I think there are three great revolutions happening in 
health care reform that need to be sustained and that momentum 
carried forward. One is the build-out of the HIT system that 
many of you have talked about to increase the efficiency of 
care, reduce medical errors, and, most importantly, start 
collecting the data that our doctors and patients need to make 
good decisions with.
    Secondly, the transformation on how health care is 
delivered, so it is more integrated, coordinated, patient-
centered. I have got models of care in my back yard in 
Wisconsin that are showing the way, from the Mayo system to 
Gundersen to Marshfield to Aurora to Theta Care. I mean, you go 
right through the list throughout the Upper Midwest, and they 
have shown very good models that do work.
    And then finally is the payment reform so we are rewarding 
good value, quality care. And what I want to ask you today, and 
anyone can take this up, and I want you to think about it for a 
second, is we are asking your members to do more, get better 
results, but for a lower cost. Can we do that without 
jeopardizing the compensation system that physicians are 
receiving today? That is going to be my question.
    But I also want to share a story with you because I spoke 
to a CEO of one of my major health care providers back home who 
invested in the Epic system, software system, a couple of years 
ago, the HIT system. And when he did, he was warned at the time 
by Judy Faulkner, the owner of Epic, that what will probably 
happen is you are going to end up ordering less tests, doing 
less imaging, less scanning, as a result of implementing this 
system.
    Two years later, I asked him what he found out. And he 
said, she was exactly right. We are doing less. We are not 
ordering as many scans. We are not ordering as much imaging as 
we did in the past. But that is affecting our bottom line 
because the incentives are not created to reward those types of 
decision-making to get better results; in fact, you are 
penalized by doing less.
    And I asked him, well, what are you going to do as a 
consequence? He says, we are going to continue to do the right 
thing. I mean, if the data does not show that we should be 
doing certain things or ordering certain scans or imaging, we 
are not going to do it, even though it is affecting the line.
    And I guess that is what you guys are all testifying about 
today is can we ask you to produce better results, good quality 
outcomes, and save money in the process, but without it 
jeopardizing the compensation system and therefore the 
incentives that exist in the system today?
    Dr. JENRETTE. I really appreciate your comments about both 
the HIT and the care coordination because I think that really 
is the key effort or direction in order to preserve, as you 
say, the compensation but do the right thing at the right time.
    And so there are going to be winners and losers as we 
control costs. But many of the costly elements--and hospitals 
are one of those areas of high cost; some of the use of 
technology, and you have already mentioned now we are using 
them more appropriately in the right setting for the right 
patient, are really the direction we need to go.
    The coordination of care, as you are referring to the 
ability to keep patients from being admitted in the first place 
or readmitted to the hospital--in our organizations in 
California, our bed-day performance is half of what it is in 
the hospital as compared to the rest of the country because of 
the efforts that are being made to manage the patients at home, 
to coordinate services with case management, pharmaceutical, 
medication reconciliation at discharge, those things that 
create the readmission and the cost of care.
    Our physicians being under a global payment system actually 
see better reimbursement than they do on their fee-for-service 
because they are able to use that money correctly and wisely to 
create the programs that are really necessary to really make a 
difference to the patients' lives and the amount of dollars 
that we spend. So yes, I believe it can be done.
    Mr. KIND. Mr. Chairman, I see we have run out of time. So 
if anyone else wants to, they can do it outside of this 
hearing, I guess. Thank you.
    Chairman HERGER. Anyone else that would like to respond by 
letter, we would appreciate it. The gentleman's time is 
expired.
    Dr. Price is recognized for five minutes.
    Mr. PRICE. Thank you, Mr. Chairman. And I want to thank you 
for holding this hearing on this remarkably important issue 
that, when you get right down to it, is all about patients. And 
sometimes we lose sight of that. This is about individual 
patients and the care that they receive.
    For at least five of the six of you, I understand that we 
make your job more difficult here in Washington in caring for 
patients. And for that, I think we all ought to take note and 
try to figure out a system that allows patients and families 
and physicians to be making medical decisions and not well-
intentioned, wonderful people here in this town who cannot know 
the individual aspects of one patient's care. It is impossible.
    That is what risk adjustment is all about. We try to figure 
out how one patient is different than another, even with the 
same diagnosis. For example, Dr. Mandell, a 65-year-old woman 
who is out playing tennis falls and breaks her hip is 
different, is she not, in terms of the treatment that she 
requires from an individual in your specialty than the 85-year-
old gentleman who is bedridden who rolls over and breaks his 
hip. Yet the code is exactly the same, is it not?
    Dr. MANDELL. That is correct.
    Mr. PRICE. And so how do we get to the recognition under a 
payment system that recognizes those two different patients 
with exactly the same diagnosis?
    Dr. MANDELL. Well, there are a number of different options, 
as you know, Congressman Price. My thought, off the top of my 
head here, would be to have some additional codes to document 
the fact that the 85-year-old had advanced osteoporosis and 
perhaps other diagnoses which qualified for additional 
resources in order to treat all the other conditions that would 
be concomitant to treating his or her hip fracture.
    Mr. PRICE. Would you not agree that the quality that we 
talk about for those two individuals, the quality result, are 
two different things, are they not?
    Dr. MANDELL. Yes. You are not going to get the 85-year-old 
to perform like a 65-year-old any more, especially after a 
fractured hip. That is true.
    Mr. PRICE. And so the quality definition that we seek--
people have tossed around this value equals quality over cost 
equation all the time--the quality that we seek is defined by a 
patient. Right?
    Dr. MANDELL. Yes.
    Mr. PRICE. So if it is defined by the patient, then who 
ought to be in charge of the system that we are talking about?
    Dr. MANDELL. Well, doctors should be in charge, in our 
opinion.
    Mr. PRICE. How about patients?
    Dr. MANDELL. In conjunction with patients. Patients do not 
always have all the information available, and doctors are the 
best folks to give them that information to make appropriate 
decisions for their particular case.
    Mr. PRICE. As a patient advocate. Which leads me to the 
other words that have been put forward here by physician-led 
physician input, physician advice. If physicians, as the 
patient advocates, have input advice led but do not have the 
veto authority over what is right for that given patient, is 
that a system that we desire?
    Dr. MANDELL. It is not a perfect system by any stretch of 
the imagination. The question really is, can we afford to have 
each individual person get maximum treatment all the time? If 
Ford wanted to build an automobile that never broke down for 20 
years, they could probably do that, but it would probably cost 
about half a million dollars to do that.
    They can build 99.9 percent of cars for what they sell them 
for. But to get to that last little bit, as you know, it is 
very, very expensive. So that is a decision that Congress needs 
to make as to whether or not we can afford to do it for every 
individual person.
    Mr. PRICE. I would suggest it is a decision the patients 
need to make.
    But Dr. Riddles, you had a comment?
    Dr. RIDDLES. Yes, sir. I think we have talked a lot about 
evidence-based and how we come to those, and that is very, very 
important. But also, it is a resource base, too, which is a 
little bit different discussion.
    And that is why we talked about building, if you will, a 
new, if you will, group that has in it not only the health care 
providers, but then leaders in other fields--the payors, 
political--and also to have the patients in that. Because when 
it comes down to it, when you are at an individual level, the 
physicians will advocate for the patient, as they should.
    But again, looking at what is right, it is a needs versus 
wants discussion at a certain point, and you need to have the 
perspective of all the stakeholders in that discussion. And I 
think that may be where we might want to be going.
    Mr. PRICE. Dr. Weinstein, you talked about having 
guidelines for those things for which there is general 
agreement, from a risk-based statement and from an outcome 
standpoint. And I see my time has expired. But I think that it 
is important for people to respond and recognize that there is 
a lot of medicine for which there is not a lot of agreement. 
And those decisions then have to be based upon patients and 
families and doctors making decisions and not wonderful people 
in grand white buildings in this town.
    Dr. WEINSTEIN. I think the only point I will add is that 
the decision should be between the patient and the physician, 
given the amount of information, the scientific literature. How 
much a patient wants should be up to the patient.
    But I think the question here is, who is going to pay for 
it? What is the basic level of care that we can afford to buy? 
What can that patient afford to buy? What can we afford for 
entitlement in Medicare?
    So the decision is between the doctor and the patient. But 
I think we have to decide what we can afford.
    Mr. PRICE. Thank you.
    Mr. JOHNSON. [Presiding.] The gentleman's time has expired.
    Mr. PRICE. Thank you, Mr. Chairman.
    Mr. JOHNSON. Dr. McDermott, you are recognized.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    Taking off on that last business about who makes the 
decision, I would like to do a pop quiz because you are all 
reasonable people. You are all smart. You think. You plan. You 
are used to dealing with problems. How many of you have filled 
out your final directives and discussed them with your family?
    [All witnesses raise their hand.]
    Mr. MCDERMOTT. Not bad. Now, how much time do you spend in 
your practice working with patients doing their final 
directives? I raise this because you know and I know everybody 
is going to die. I mean, Woody Allen said it: Nobody gets out 
of life alive.
    So we are all going to die. And yet those last six months, 
we spend the most amount of money, and the most amount of money 
that is of no useful purpose, because the patient is in the 
last days and for reasons of medical malpractice and families' 
disagreement and whatever, care goes on.
    And I would like to hear how many, or rather, you in your 
practice--I have a medical home. There is a doctor who has my 
directives, and I discuss with him everything. But how many of 
you have talked with patients about final directives? Is it any 
part of your practice at all?
    Dr. JENRETTE. I will begin. And my specialty area happened 
to be geriatrics, so I actually spent a significant amount of 
time talking about end-of-life services for the family and for 
the patient. And I would agree it is a role as patient advocate 
and trying to give them the best information that you can so 
that they and the family understand what the quality of life 
will be, depending upon the treatment that we offer. So I have 
had years of experience in doing that.
    Within our organizations, we actually have metrics that we 
measure, and we actually have a goal of what patients have 
their final directives completed and are they on all charts. 
And we look at those, and we audit for those, because we think 
it is such an important piece of how we treat patients and in 
their care for the future.
    So I believe you are right on target, and I think it is one 
of the most important things we could do. In fact, if we were 
able to focus there and really not take into account and not 
deliver the unnecessary services, as you talk about, at the end 
of life, I am not sure we would need to have so many of the 
conversations about which hip we might use here or what 
procedure we might do there because most of the dollars are 
going in end-of-life care when it is unnecessary.
    Mr. MCDERMOTT. One of the problems that we ran into in the 
Affordable Care Act, we put some money in so that doctors could 
be reimbursed to discuss end-of-life questions with patients 
and would be paid for it. And it became a lightning rod for an 
awful lot of misinformation, I think would be the nicest way to 
put it.
    Do you force your patients to sit down and write their 
final directives?
    Dr. JENRETTE. It is not a forced issue. It is----
    Mr. MCDERMOTT. No. It is not a forced issue.
    Dr. JENRETTE. Not forced.
    Mr. MCDERMOTT. It is not forced by the government?
    Dr. JENRETTE. No.
    Mr. MCDERMOTT. So how do you bring it up with patients in a 
way that makes some sense?
    Dr. JENRETTE. Well, it is part of, medically, what you are 
doing as you are going through history, as you are looking at 
outcomes and what kinds of either prevention or chronic care or 
what are we managing here together. It is a conversation that 
becomes part of the regular dialogue and can be with any 
patient. It does not matter what age group it is.
    I mean, to have that conversation, if something 
catastrophic happened, if you found yourself in this situation, 
we need to have a discussion about what your wishes would be.
    Mr. MCDERMOTT. One of the things we did here in this 
Committee, and it frustrated me then and it still frustrates 
me, Sandy Levin and I put an amendment into a bill in 1990, I 
believe it was, that would require Medicare to give final 
directive information to patients when they gave them their 
beginning of Medicare. And then we went back a year later to 
find out how many had filled out those final directives.
    Now, this is a country where we do not like to talk about 
death. We will do anything to talk about something else besides 
death. And so it is not surprising that only 40 percent of the 
people in this country have wills; that is, they have decided 
how their whatever their wealth is is going to be distributed 
when they die.
    When we looked in further, we found that only 20 percent of 
the people who we had given these forms to had filled them out. 
And I am puzzled about how we, as a country, come to grips with 
this whole issue because my mother lived to 97 and my father 
lived to 93, and my brothers and sister and I have been through 
the process on the patient's side of the bed, try to figure out 
what we should do.
    And my experience with it was, my father said--when we were 
doing with him, he said, ``Well, I do not want them paddles. I 
have seen them things on TV, and I do not want that, that 
jumping on the bed.'' So I went to the doctor who was his 
physician, and he said, ``Well, you know, it is really a lot 
less traumatic to have that than it is to have some big old 
intern pressing on your ribs and breaking all your ribs.'' So 
my father said, ``Well, okay. If that is what you suggest, that 
is what we will do.''
    But those are not easy discussions to have. And I really 
think that that is one of the things that we, as a profession--
I am a physician. So we as a profession are going to have to 
come to grips with how we deal with this among our patients. 
Because a lot of the waste that we are talking about, the costs 
are going to come down. How we do that is going to have to be 
as humane as possible and with the patient as the center of it, 
in my view.
    Thank you, Mr. Chairman.
    Mr. JOHNSON. Thank you. The gentleman's time has expired.
    Mr. Buchanan, you are recognized.
    Mr. BUCHANAN. Yes. Thank you, Mr. Chairman. And I also want 
to thank the committee for being here. I am excited we are 
talking about quality care. I am from Sarasota, Florida. In 
that region, we got rated as the best community, middle-sized 
community, in the country for quality of living.
    But at the top of the list, best place to live and work, 
top of the list was quality health care. So it is obviously 
critical, what you guys do every day, and it makes a big 
difference. So I appreciate you being here.
    Let me mention, as someone new on the panel, I have been in 
business for 30-some years--I am all about everybody wants to 
be more efficient. But when we talk about quality and 
efficiency, looking at that fine line, as I think about it, 
meeting with a lot of doctor groups and a lot of doctors 
generally in our area, one cardiologist told me, he said, ``The 
last 20 years I am working twice as hard and get reimbursed 
half.''
    I get a sense with a lot of doctors that I hear this, where 
maybe they used to see 6 or 10 patients in an hour; now they 
are seeing 12 to 15. They have got more staff. So where is that 
fine line?
    When you talk about quality health care that everybody 
wants--I do not think it is just about electronic health 
records; I think that helps us be more efficient--that fine 
line between that and efficiency, where does that come in? 
Because I hear from patients as well, where they are concerned, 
where the doctor is under pressure, they feel, has to get in 
and out and he has got 10 patients waiting.
    So I would just ask the panel, do you want to comment on 
that? Where is the fine line between doctors working harder, 
making less, in a sense--and I am not sticking up for doctors, 
but at the end of the day that is the key to health care, in my 
mind--where is that fine line between providing the quality we 
all talked about today and the efficiency--and usually it is 
with that doctor's time--in terms of patients? Let's start at 
the end here with Dr. Riddles.
    Dr. RIDDLES. Yes, sir. I agree completely. The issue is, 
the fine line is not where we sit down. And this is why we are 
talking about value-based and evidence-based, to learn where 
that fine line is and then make sure that we line our 
reimbursement system up with that.
    I think part of the reason that physicians are seeing more, 
moving faster, and so forth is again symptomatic of--we are 
reimbursed for, again, for the most part, is numbers seen, 
procedures done, those type of things. And that is not 
necessarily where the best outcomes lie.
    So getting back to what we have done before is we need a 
system where we can see that, learn where it is, where the 
evidence exists, do that, and if not, then coming up with 
appropriate use criteria as we do learn more, sir. So that 
would be my sense.
    Mr. BUCHANAN. Dr. Bronson.
    Dr. BRONSON. I could not agree more with you. The current 
system of paying just for individual service at a time, and 
then with cut payments, leads to almost a mill mentality of 
pushing people through. That does not serve the patient well, 
it does not satisfy the doctor in their practice, and that is 
not the system we should have.
    The system we should have is to support comprehensive care 
in a way that provides that value. And that is what we are 
talking about with the patient-centered medical home concept. 
The concept really leads to better care coordination, a more 
comprehensive look at problems, and more prevention so that you 
are dealing with those issues early on instead of late. There 
are lots of opportunities to get better.
    Mr. BUCHANAN. Dr. Weinstein? And again, I want to get back 
to this idea. Do you sense that in practices where the doctor, 
when we talk about efficiency, maybe they used to, on average, 
spend 8 minutes and now they are down to 3, is that where a lot 
of this efficiency is going?
    Dr. WEINSTEIN. Let me try and answer.
    Mr. BUCHANAN. That is what I hear.
    Dr. WEINSTEIN. Yes. And I think we can define quality. You 
know, we all want high quality, be that patient satisfaction, 
lower drug costs, less hospitalizations. And I think we can 
measure those things and we can report on those things.
    As businessmen, our job is to try and deliver that same 
level of quality with the right provider in the right location 
at the lowest cost. That means right-sizing our offices, maybe 
using physician extenders for certain services that do not 
necessarily require the highest trained person in your 
business.
    But yet we have to maintain the quality, the patient 
satisfaction, the lower drug costs. And so if we can define 
what we want to measure and maintain that quality and then 
provide it through a business model that allows us to right-
size the provider to the patient's need, then we can succeed.
    I think one of the things that frustrates us in business is 
the unknown about where the revenue is coming from, and that is 
the broken Medicare system. As we go from 6 months to 9 months 
to 12 months not knowing what the revenue is going to be, if 
you are in business, I do not think you have that uncertainty.
    Mr. BUCHANAN. I cannot imagine what you have got to deal 
with, the SGR and everything.
    Dr. Mandell, I want to give everybody an opportunity just 
to comment.
    Dr. MANDELL. Yes. What you talked about, obviously, is a 
symptom of fee-for-service medicine. And I can only talk about 
orthopedic surgery. Mr. Kind was talking earlier about the fact 
that if we do have appropriate use criteria and clinical 
practice guidelines, there will be less business, so to speak, 
down the line.
    We kind of look at it as the appropriate amount of 
business. And at least with regard to musculoskeletal problems, 
there is a tidal wave of Baby Boomers coming online with 
Medicare right now. So I think as we focus on doing things that 
really work and avoid doing things that do not work very well, 
at least for orthopedic surgeons, there will be the right 
amount of folks and the right amount of procedures done, so it 
will not be a real issue for us.
    Mr. JOHNSON. Mr. Sharp.
    Mr. SHARP. Yes. I think you have hit an important point. We 
believe, as you look to try to find efficient ways to run 
practice, there is a lot to be said for and a lot of 
opportunity within the multi-specialty group model.
    You have got interdisciplinary teams of physicians, a lot 
of different specialties meshed up with primary care. And there 
are inherent efficiencies in the business side of the practice 
that can afford the physician, perhaps, more time to do more 
good with the patient.
    And so I think also, and Dr. Bronson hit on this in his 
oral statement, a lot about the patient-centered medical home. 
And that is a team-based approach using extenders and using 
nurse care coordinators that are managing the population health 
with a team-based approach, where the physician does not have 
to be the one doing everything. And those are things that we 
think can be a part of the solution.
    Mr. BUCHANAN. Doctor?
    Dr. JENRETTE. I think a lot has been said about, again, the 
patient-centered medical home. But really, it is about the 
team-based approach, people working at what we call the top of 
their license. So the physician, rather than seeing 12, 15, 20 
patients and increasing what they are doing each day, it is 
using other extenders within the offices. It is becoming 
creative, new delivery models. It is about group appointments. 
It is around social networking for care. It is around using 
case manager support. It is around using pharmacists to help 
them with their medications. So it is not all on the 
physician's desk. And so we needed teams, a multidisciplinary 
approach to a different delivery system.
    Mr. BUCHANAN. Am I out of time?
    Mr. JOHNSON. You are out of time.
    Mr. BUCHANAN. Thank you. I want to thank the witnesses and 
thank the chairman. Thank you.
    Mr. JOHNSON. Yes, sir.
    I want to thank our witnesses for their testimony today. 
Your organizations are doing promising work to improve the 
quality of patient care, and this work is of great interest as 
we seek to reform Medicare physician payments. The fact that 
physician organizations have developed so many innovative 
clinical improvement activities gives me increasing hope that 
Medicare can build on these efforts and we can find the long-
term solution that has been so elusive.
    I appreciate the physician leadership exemplified by our 
witnesses because this reform effort cannot succeed without 
active participation by the physician community. Together we 
must find a better way, and we are constantly reminded the 
current rate of growth in Medicare spending is unsustainable.
    While I, along with many of my colleagues on the Republican 
side, believe we ultimately need to bring greater 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 that provides certainty for physicians and encourages 
optimal patient care and outcomes.
    As a reminder, any member who wishes to submit a question 
for the record will have 14 days to do so. If any questions are 
submitted, I ask that the witnesses respond in a timely manner.
    And with that, this Committee stands adjourned. Thank you 
all for being here.
    [Whereupon, at 11:41 a.m., the committee was adjourned.]
    [Submissions for the Record follow:]
       Association of American Physicians and Surgeons, Statement

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