Salt Lake City, USA – A recent news article discussed the flaws leading to poor quality care in Medicare, the largest healthcare purchaser in the U.S. For example, by better educating doctors about the most effective pneumonia treatments, Intermountain Health Care, a network of 21 hospitals in Utah and Idaho, says it saves at least 70 lives a year. By giving the right drugs at discharge time to more people with congestive heart failure, Intermountain saves another 300 lives annually and prevents almost 600 additional hospital stays. However, Intermountain complains that its initiatives have cost it millions of dollars in lost hospital admissions and lower Medicare reimbursements. Similarly, Medicare’s payment policies often deter even private hospitals and doctors from giving quality care, such as providing valuable specialists in intensive care units, since they will not be reimbursed for it.

    Medicare pays hospitals and doctors a fixed sum to treat a specific diagnosis or perform a given procedure, regardless of the quality of care they provide. Those who work to improve care are not paid extra, and poor care is frequently rewarded, because it creates the need for more procedures and services to rectify medical mistakes, such as drug-reactions due to prescribing the wrong drug, letting a medical condition like pneumonia worsen to the point of needing a ventilator before treating it properly, etc. A frustrated Dr. Brent C. James, who leads Intermountain’s efforts to improve quality, said, “The (Medicare) payments are perverse. It pays us to harm patients and it punishes us when we don’t.”

    Today, the criticism of Medicare’s payment system is increasing. Medicare’s top official, Thomas A. Scully, agrees that the payment system needs to be fixed. “It’s one of the fundamental problems Medicare faces,” he said. He has encouraged better care by publicizing data about the quality of nursing home and home-health care and experimenting with programs to reward hospitals for their efforts. For example, Medicare now pays certain hospitals an extra 2 percent for delivering the highest-quality care. However, some hospital industry executives question whether that is enough money to offset the costs of improving care. Mr. Scully, the Medicare administrator, defends the experiment, saying, “If this works, we’ll do a bigger demonstration.”

    Recent Medicare legislation calls for studies and a few pilot programs on quality improvement. However, experts say that rather than paying for more studies, Congress should start making significant changes in paying doctors and hospitals, such as paying up to 20% extra for quality care, reimbursing only quality care, etc.