Report Discourages Medicare Value Index

Oregon shows up well in a National Academy of Sciences study on keys to Medicare spending and reimbursement.In the corners of the ongoing Medicare debate is the issue of variability of Medicare payments in different regions of the country. It long has been a complaint in the Pacific Northwest that Medicare reimbursement is lower than elsewhere in the nation because of the region's commitment to managed care and holding down medical costs.

Now the National Academy of Sciences' Institute of Medicine has released the findings of its three-year study on the subject, along with a recommendation discouraging Congress from implementing a "value index" to give favored funding to regions offering high-quality medical care at the lowest prices.

Pressure for the study came from political leaders in states such as Minnesota and Iowa, which boast of lower spending on health care spending. However, the Institute of Medicine report debunked most claims, saying medical spending variability often is as great within regions as it is among states.

The report also said the local areas with the lowest Medicare spending per beneficiary, adjusting for local wages and prices, were in New York, California and Oregon. 

Areas with the highest per beneficiary Medicare spending were in Florida, Texas and Louisiana, states that typically still are dominated by fee-for-service health insurance systems.

Health care experts cited in a New York Times story about the report said a key to quality care at lower prices is controlling utilization of medical services, which has nothing to do with geography. A New York health care official said the Bronx achieved relatively high quality care at lower prices as a result of an aggressive effort by Montefiore Medical Center to coordinated care.

It is little surprise, then, that Oregon's experiment with coordinated care organizations, charged by Governor Kitzhaber with bending the cost curve of health care delivery systems, has attracted so much attention nationally. One of the top priorities of coordinated care organizations in Oregon has been to improve treatment approaches for patients suffering from complex chronic diseases, with a goal of sharply reducing their admission to hospitals.

The efforts and early successes of coordinated care have not gained much national prominence, especially under the brighter lights shining on the debate over Medicare reform, which President Obama rekindled this week. As politicians get around to modifying Medicare, the on-the-ground reforms achieved by health care providers will undoubtedly be pushed onto center stage.