Sustainable Growth Rate Reform

In a previous portion of the Spring 2015 Healthcare Reform Stakeholder Summit, the participants discussed the difficulties providers, particularly physicians, experience in taking on financial risk. Arthur Vercillo, MD, FACS, regional president, Excellus Blue Cross Blue Shield, says that individual physicians usually do pretty well in risk-based environments, but when they are in larger groups and have little control over how their colleagues practice, challenges become evident. This is where another person, who can coordinate risk in a practice, becomes an asset.

When this discussion took place, Medicare’s Sustainable Growth Rate (SGR) had not yet been repealed. Francois de Brantes, MS, MBA, executive director of the Healthcare Incentives Improvement Institute, cautioned that pending legislative action to remove the SGR “deflator” may include moving physicians to various forms of value-based payment systems, “which is essentially a transfer of risk.” He points out that this is also about “modifying the fundamental way in which the incentives are going to flow for the Medicare program.” He asks, however, whether CEOs and physicians really understand this concept.

Ateev Mehrotra, MD, MPH, associate professor of healthcare policy and medicine at Harvard Medical School, responds that in an accountable care organization such as his, the executives and physician staff do understand the nature of the beast, “that we’re held responsible for the total spending for a patient population.” Yet in his own practice, in which he treats ACO members and nonmembers, there is no detectable difference in the way he treats both patient groups. “Maybe it’s a good thing that we’re just delivering care the way we used to and there’s things happening on the back end that are more about delivering better care and decreasing costs,” he says.