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82–118—PDF 2012

S. HRG. 112–799 

ROUNDTABLE DISCUSSION ON 

MEDICARE PHYSICIAN PAYMENT POLICY: 

PERSPECTIVES FROM PHYSICIANS 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

JULY 11, 2012 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

ORRIN G. HATCH, Utah 

CHUCK GRASSLEY, Iowa 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

TOM COBURN, Oklahoma 

JOHN THUNE, South Dakota 

RICHARD BURR, North Carolina 

RUSSELL SULLIVAN, Staff Director 

CHRIS CAMPBELL, Republican Staff Director 

(II) 

C O N T E N T S 

OPENING STATEMENT 

Page 

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee 

on Finance ............................................................................................................ 1 

WITNESSES 

Hoven, Ardis Dee, M.D., president-elect, American Medical Association, Lexington, KY ............................................................................................................. 2 

Stream, Glenn, M.D., president, American Academy of Family Physicians, 

Spokane, WA ........................................................................................................ 3 

Opelka, Frank, M.D., FACS, vice chancellor of clinical affairs and professor 

of surgery, Louisiana State University Health Science Center, New Orleans, 

LA .......................................................................................................................... 5 

Weaver, W. Douglas, M.D., MACC, vice president and system medical director 

of heart and vascular services, Henry Ford Health System, Detroit, MI ........ 6 

McAneny, Barbara, M.D., CEO, New Mexico Oncology Hematology Consultants, Albuquerque, NM ....................................................................................... 7 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 33 

Hatch, Hon. Orrin G.: 

Prepared statement .......................................................................................... 34 

Hoven, Ardis Dee, M.D.: 

Testimony .......................................................................................................... 2 

Prepared statement .......................................................................................... 35 

McAneny, Barbara, M.D.: 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 43 

Opelka, Frank, M.D., FACS: 

Testimony .......................................................................................................... 5 

Prepared statement with attachments ........................................................... 51 

Stream, Glenn, M.D.: 

Testimony .......................................................................................................... 3 

Prepared statement with attachments ........................................................... 75 

Weaver, W. Douglas, M.D., MACC: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 99 

COMMUNICATIONS

American Society of Anesthesiologists ................................................................... 105 

American College of Physicians .............................................................................. 113 

(III) 

(1) 

ROUNDTABLE DISCUSSION ON 

MEDICARE PHYSICIAN PAYMENT POLICY: 

PERSPECTIVES FROM PHYSICIANS 

WEDNESDAY, JULY 11, 2012 

U.S. SENATE, 

COMMITTEE ON FINANCE, 

Washington, DC. 

The hearing was convened, pursuant to notice, at 10:09 a.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus 

(chairman of the committee) presiding. 

Present: Senators Bingaman, Wyden, Stabenow, Cantwell, Nelson, Carper, Cardin, Hatch, Kyl, and Thune. 

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR 

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The hearing will come to order. 

Albert Einstein once said, ‘‘A great thought begins by seeing 

something differently, with a shift of the mind’s eye.’’ 

Today, we hold our third roundtable on Medicare Physician Payments. We have heard from former CMS administrators and from 

private payers. We are here now to see things through the eyes of 

those who receive the payments and provide the care; that is, our 

physicians. 

Every year, the flawed sustainable growth rate, or SGR, leads 

physicians to fear dramatic reductions in their Medicare payments. 

Next year, physicians will face a 27-percent cut if we do not act. 

While Congress has intervened to prevent these cuts each year, 

it is time we develop a permanent solution. We need to repeal SGR 

and end the annual ‘‘doc fix’’ ritual. The year-in and year-out uncertainty is not fair to physicians or the Medicare beneficiaries who 

need access to these doctors. 

When thinking about new ways for Medicare to pay physicians, 

we must clearly focus on controlling health care spending. Physicians can help us find the solutions. They are, after all, on the 

front lines of health care delivery. 

Ninety-seven percent of Medicare beneficiaries see a physician at 

least once a year, and beneficiaries with chronic conditions see 

their physicians at least monthly. 

By ordering tests, writing prescriptions, and admitting patients 

to hospitals, physicians are involved in up to 80 percent of total 

health care spending. We need physicians to suggest changes to the 

Medicare physician payment system that will spur high-quality, 

high-value care. 

2 

I look to today’s panelists to offer solutions both in the shortterm and the long-term. And I hope, like Einstein said, they can 

help us come up with a great thought by seeing something differently. 

We need solutions that will work for both primary care physicians and specialists, and they need to work for beneficiaries with 

chronic conditions. After all, these beneficiaries account for twothirds of total Medicare spending. 

I look forward to candid and direct suggestions from our panelists as to how we can begin to better control our health care spending. 

[The prepared statement of Chairman Baucus appears in the appendix.] 

The CHAIRMAN. Senator Hatch will be here in a moment. He is 

currently on the floor. In the meantime, I would like to introduce 

the panelists. 

Beginning to my left, today we will hear from Dr. Ardis Hoven, 

president-elect of the American Medical Association. Next is Dr. 

Glenn Stream, president of the American Academy of Family Physicians. Third will be Frank Opelka, vice chancellor of clinical affairs and professor of surgery at Louisiana State University’s 

Health Sciences Center. Fourth, Dr. Douglas Weaver. Dr. Weaver 

is vice president and systems medical director of heart and vascular services at the Henry Ford Health System. And finally, Dr. 

Barbara McAneny, chief executive officer of the New Mexico Oncology Hematology Consultants. 

As a reminder, your written statements will be included in the 

record. Please limit your statements to about 3 minutes. Since we 

have a few more Senators here today, I would like to limit your 

comments to about 3 minutes each. 

I would like this to be more in the nature of a roundtable, not 

a more formal hearing. That is, after each of you makes your statement, we will have a few questions, and I would like us to kind 

of interchange back and forth. If you want to say something, pipe 

up and say it. That goes for both our panelists as well as for Senators. 

So you start, Dr. Hoven. We are very happy to see you here and 

happy to have you here. 

STATEMENT OF ARDIS DEE HOVEN, M.D., PRESIDENT-ELECT, 

AMERICAN MEDICAL ASSOCIATION, LEXINGTON, KY 

Dr. HOVEN. Thank you, Chairman Baucus and members of the 

committee, for convening this important roundtable discussion. As 

you know, I am Ardis Hoven. I am president-elect of the American 

Medical Association, and an internal medicine and infectious disease specialist in Lexington, KY. 

We all know that the SGR has failed. It must be repealed and 

replaced with alternative payment and delivery models that support high-quality and high-value care. 

As we move forward, two factors are critical. First, physician 

practices widely vary, and the development and dissemination of 

innovative practice and delivery models are proceeding at different 

paces. A large multispecialty practice is currently better positioned 

to implement broad-scale innovations than is a small, rural pracVerDate Nov 24 2008 16:51 Aug 08, 2013 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 R:\DOCS\82118.000 TIMD
3 

tice. Flexibility and a menu of multiple solutions are needed on a 

rolling basis. 

And secondly, alternative models must cut across Medicare silos. 

When physician care achieves overall Medicare program savings, 

physicians and Medicare should share in those savings. Currently, 

additional physician services that prevent costly medical care drive 

steeper cuts under the SGR. This incentive structure has to 

change. 

Physicians have already begun transitioning into alternative payment and delivery models. This includes, for example, 154 Medicare accountable care organizations. And the Center for Medicare 

and Medicaid Innovation is testing many new models. Many innovations are also being conducted in the private sector, as the committee heard at its June roundtable. 

The AMA strongly supports these initiatives and is helping physicians with the transition. For example, our AMA-convened Physician Consortium for Performance Improvement has developed measures relating to outcomes and overuse of care, and is expanding 

its work in this area. 

Congress can take immediate steps to help in the transition. 

First, Congress should require CMS and the Innovation Center to 

offer opportunities for physicians to enroll in new models on a rolling basis. Practices can then plan for needed changes and join as 

they become ready. This will increase physician participation in 

new models and significantly aid the transition for small, solo, and 

rural practices. 

Second, Congress should require CMS to modernize its Medicare 

data systems. Due to CMS’s antiquated systems, providing physicians with actionable real-time data to guide decision-making has 

been difficult. Physician access to such timely and relevant data 

was a key element behind the success of the private sector models 

discussed at the previous June roundtable. 

Third, Congress should provide Medicare funding to CMS for 

quality measure development, testing, and maintenance, and for 

measure review and endorsement. This is critical to ensure that 

meaningful and up-to-date measures are available for Federal quality programs. 

The AMA is eager to continue our work with the committee to 

transition to a new stable system that strengthens Medicare. 

Thank you. 

[The prepared statement of Dr. Hoven appears in the appendix.] 

The CHAIRMAN. Thank you, Dr. Hoven. 

Dr. Stream? 

STATEMENT OF GLENN STREAM, M.D., PRESIDENT, 

AMERICAN ACADEMY OF FAMILY PHYSICIANS, SPOKANE, WA 

Dr. STREAM. Chairman Baucus and Senators, thank you for inviting the American Academy of Family Physicians to state our 

views on physician payment policy. 

We believe health care in the United States is inefficient and delivers lower-quality care, largely because it undervalues primary 

care. The AAFP is convinced that no single alternative payment 

method will rebuild primary care. We need a combination of methods. 

4 

AAFP promotes the Patient-Centered Medical Home, or PCMH, 

supported by a blended payment system that includes fee-forservice, a care management fee, and a quality improvement payment. 

We advocate for this reinvigoration of primary care because we 

know it works to improve health care and restrain costs in the long 

run. The evidence for this is accumulating rapidly, and our statement provides several examples. Findings from PCMH programs 

across the Nation are compelling, demonstrating success in improving quality and restraining health care costs. 

Earlier this year, AAFP sent recommendations to the acting administrator of CMS. These were the result of an AAFP-sponsored 

task force on primary care evaluation. The key recommendation is 

that, in order to build a system of care that will be consistently 

more efficient and produce better health, we need to pay primary 

care differently and better. 

We call to your attention the Medicare Physician Payment Innovation Act, H.R. 5707, introduced by Representatives Allyson 

Schwartz and Joe Heck. It makes a notable step towards recognizing this critical need to pay primary care differently. 

The CMS Innovation Center has several programs testing systems that support primary care. For example, the Comprehensive 

Primary Care Initiative includes several health plans in various 

markets that will offer a per-patient, per-month care coordination 

fee for primary care physicians whose practices are effectively 

Patient-Centered Medical Homes. 

The Primary Care Extension Service program administered by 

the Agency for Health Care Research and Quality deserves your attention. Currently without funding, this program is designed to disseminate up-to-date information about evidence-based therapies 

and techniques to small practices. The AAFP strongly recommends 

that Congress fund the Primary Care Extension Service program. 

We ask for your continued support of the Primary Care Incentive 

Payment, PCIP, the 10-percent Medicare bonus payment to primary care physicians and providers for certain primary care services. The Commonwealth Fund recently published a study that the 

PCIP, if made permanent, would yield a more than 6-fold annual 

return and lower Medicare costs. The net result, according to this 

study, would be a drop in Medicare costs of nearly 2 percent. 

Senators, we all want the same thing—better health care at less 

cost. There is a proven way to go a long way toward achieving that 

outcome: invest in primary care. We have ample evidence that 

doing so will not increase the overall cost of care per individual per 

year. 

Thank you for your commitment to the health of this Nation. 

And family physicians are eager to assist you in making the difference we need. 

[The prepared statement of Dr. Stream appears in the appendix.] 

The CHAIRMAN. Thank you, sir. 

Next, Dr. Opelka? 

5 

STATEMENT OF FRANK OPELKA, M.D., FACS, VICE CHANCELLOR OF CLINICAL AFFAIRS AND PROFESSOR OF SURGERY, LOUISIANA STATE UNIVERSITY HEALTH SCIENCE 

CENTER, NEW ORLEANS, LA 

Dr. OPELKA. Chairman Baucus and Senators, thank you very 

much for this opportunity, and good morning to you today. 

I come to you to speak on behalf of improving the care for the 

surgical patient and inspiring quality among surgeons. So, on behalf of the American College of Surgeons, there are a couple of key 

points I would like to make and share with you. 

And to be brief, we have several programs and initiatives that 

we have been working on to inspire quality and to improve the 

quality of care, and we believe that that actually helps reduce the 

costs in health care today by reducing things like surgical site infections, readmissions, and complications that patients suffer. 

There are two key programs that I would like to bring to your 

attention, one in the short term and one in the long term. The 

short-term approach is to look at the various clinical registries that 

we have developed over the years, and those go back 10–15 years’ 

worth of work, where we have accumulated millions of data points 

on patients that drive quality improvement. 

These registries are the cancer registry, where we have over 11 

million lives that we actually track the outcomes of to drive improvement in cancer care; the trauma registry; and, to perhaps 

focus more explicitly today on, the national surgery quality improvement registry. That is a registry that began in the VA some 

15 years ago and now, today, is in over 500 hospitals. It is driving 

quality improvement, reducing patient complications, and reducing 

costs related to those complications. 

We have worked with CMS, and it is time to improve that work 

with CMS to bring those registries to this next level of the value 

proposition that CMS is working on so we can strengthen surgical 

care and improve the quality of care across the entire country. We 

would like to expand from those 500 hospitals to every hospital 

that has surgical care. 

The long-term view and the long-term point I would like to make 

is actually, how do we actually replace the SGR? We have been 

working on a proposal that ties together all these value initiatives 

that we have been working with CMS on, all the value programs, 

into a value-based update using targets of improvement—targets of 

improvement in cancer care, targets of improvement in trauma 

care, targets of improvement in cardiology, targets of improvement 

in chronic and preventive care, targets of improvement in rural 

care—focusing those as the targets for updates, bringing physicians 

and hospitals in alignment on a set of targets that actually replaces 

the SGR with something that we value: improving the quality of 

care and reducing the costs related to bad care, to overuse of care, 

to unsafe care, to poor quality of care. 

So we think that there is an opportunity to further explore this 

as a value-based update to replace the SGR within the context and 

the framework that we are currently using throughout all of our 

programs, both public and private, to stimulate a better health care 

system. 

6 

Thank you very much for this opportunity, and I look forward to 

our dialogue. 

[The prepared statement of Dr. Opelka appears in the appendix.] 

The CHAIRMAN. Thank you, Doctor. 

Dr. Weaver? 

STATEMENT OF W. DOUGLAS WEAVER, M.D., MACC, VICE PRESIDENT AND SYSTEM MEDICAL DIRECTOR OF HEART AND 

VASCULAR SERVICES, HENRY FORD HEALTH SYSTEM, DETROIT, MI 

Dr. WEAVER. Chairman Baucus and Ranking Member Hatch, I 

am Dr. Doug Weaver, past president of the American College of 

Cardiology and system medical director for heart and vascular 

services for Henry Ford Health System in Detroit. Today I am 

pleased to speak to you on behalf of the American College of Cardiology. 

If the College could make one suggestion for Medicare payment 

policy, it would be: create stability in the system. It is badly needed 

right now. The current uncertainty around Medicare physician payments, around the ACA legislation and its initiatives, are seriously 

impeding progress by physicians and hospitals towards delivery 

and payment reforms. 

The College has had several decades of experience in developing 

and applying quality improvement tools, including producing clinical practice guidelines for diagnosis and treatment of common cardiac diseases; the appropriate use criteria, which allow physicians 

to better apply the right diagnostic testing and cardiac procedures; 

and then, our clinical registries, in which physicians and hospitals 

can submit their own data around cardiac procedures. They then 

get it back and are able to benchmark it against the whole Nation, 

as well as locally. We believe that broader use of these tools will 

improve quality, will produce better patient outcomes, and will 

lower costs. 

Let me tell you some of the lessons we have learned in these 

years. Number one, data is key. Efforts to improve quality and efficiency must be grounded in the use of the best scientific evidence 

available. The collection of robust clinical data, measurement, and 

feedback to doctors on performance—doctors are data-driven. They 

have competed throughout their entire training to be the best, and 

they respond to credible data, and particularly when that is produced by their specialty societies that have identified particular 

problems that they feel need to be improved. 

Number two, flexibility is necessary. New payment models must 

be crafted with collaboration of clinicians and payers. One size does 

not fit all. We applaud the beginning efforts to reward care coordination, but CMS needs to seek out additional local solutions that 

increase value and reduce costs. 

Third, incentives must be aligned throughout the entire delivery 

system, to include the payer, the primary care physician, the specialist, the hospital, and the skilled nursing facility. Currently, we 

are too often competing with each other instead of being aligned. 

Payers are trying to reduce costs, hospitals are trying to fill beds, 

and the physician is really uniquely positioned to ensure that patients get the highest quality care at the lowest cost if the current 

7 

system is revised to incent this approach. Rewarding physicians for 

providing the right care and using an appropriate amount of resources is essential to solving the Medicare spending crisis. 

The College urges Congress to incentivize a greater expansion of 

and use of quality and utilization improvement tools such as ours. 

I look forward to our dialogue. 

[The prepared statement of Dr. Weaver appears in the appendix.] 

The CHAIRMAN. Thank you, sir. 

Dr. McAneny? 

STATEMENT OF BARBARA McANENY, M.D., CEO, NEW MEXICO 

ONCOLOGY HEMATOLOGY CONSULTANTS, ALBUQUERQUE, NM 

Dr. MCANENY. Thank you, Chairman Baucus, Ranking Member 

Hatch, and members of the committee. Thank you for the opportunity to participate in this important roundtable discussion. 

My name is Barbara McAneny, and I am a medical oncologist 

practicing in New Mexico. I am here today on behalf of the American Society of Clinical Oncology, ASCO, which represents 30,000 

oncologists. 

ASCO supports your efforts to transform the Medicare payment 

system to encourage high-quality, high-value care for individuals 

with cancer. We hope that Congress will replace the SGR and soon. 

The SGR has created great instability in our practices and is eroding a very effective network of care. 

ASCO’s vision is that of a fair and responsible system that rewards evidence-based care and recognizes that many cognitive 

services, including end-of-life counseling, are critical to treating patients with cancer. Any new payment system must preserve quality, enhance access to care, and, first, do no harm. 

Quality for cancer patients involves providing accurate diagnoses, appropriate evidence-based therapy delivered safely, and a 

strong support system for the human needs of the patients and 

their families. 

ASCO has already developed a quality program in which thousands of oncologists already participate voluntarily. We call it the 

Quality Oncology Practice Initiative, or QOPI. I participate in this 

program, and I know from experience the beneficial effect it has 

had on supporting meaningful quality in my own practice. 

It is frustrating, however, that I also have to report through 

Medicare’s less practice-enhancing quality program. We believe 

that leveraging QOPI would be an immediate first step that Congress could take to promote quality and efficiency, while reducing 

the administrative burden on oncologists. 

Secondly, we urge you to rely on the expertise of oncologists as 

you move toward transformation of cancer care payment and delivery. Policies that have the effect of dismantling community cancer 

care could exaggerate the existing disparities for rural patients. 

Cancer care is generally delivered in the patient’s home community, and cancer doctors have developed a sophisticated infrastructure that allows us to administer dangerous and toxic therapies 

safely, while allowing patients to remain at home with the people 

they love. 

Therefore, we would like to emphasize that new oncology models 

must be tested through pilot programs that reflect the diverse popVerDate Nov 24 2008 16:51 Aug 08, 2013 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 R:\DOCS\82118.000 TIMD
8 

ulations that we serve before they are generally implemented. Any 

change in the payment system has the potential for unintended 

consequences for a very vulnerable population. 

However, oncologists are already involved in many pilot projects 

to test new payment mechanisms which could help control costs. I 

am a recent recipient of the grant from the Medicare Innovation 

Center to test a model based on the medical home concept and bundled patients. My project involves seven private practices of oncology from Maine to New Mexico. 

We can save money for the system, while providing better health 

and better health care. I am happy to talk about that further, if 

you would like. 

ASCO stands ready to assist you as you move forward. I am 

happy to answer any questions. 

[The prepared statement of Dr. McAneny appears in the appendix.] 

The CHAIRMAN. Thank you. One question—I have several. One 

is, since physicians are so involved with such a large percentage of 

payments, health care payments, in our country, it seems to me 

that maybe there is a little bit of a—I do not like this word—‘‘disconnect,’’ but between SGR, which is for physicians only, and yet, 

physicians are so involved in health care payments that are made 

elsewhere in the system. 

Perhaps as we look at SGR, there might be some way where physicians are involved or reimbursed in a way that helps involve 

them in choosing the care given to patients more holistically. 

Currently, people say we are too stove-piped, and one stove pipe, 

to some degree, is SGR. But any thoughts you might have on how 

we sort of collapse some of these pipes and especially the role of 

physicians, because physicians are so heavily involved. I think the 

figure I have is about 80 percent of health care dollars are related 

to decisions made by physicians. 

Your thoughts on that, anyone who may want to pipe up? 

Dr. Hoven? 

Dr. HOVEN. I will start. Thank you for that question, because I 

think that is something we all chat about on a regular basis. And 

I think, as we start looking for value within the system, it will be 

the physicians in those practices who are looking at the models of 

care that are being used, be they in primary care medical home 

models, be they in bundled payments. 

Wherever they are, we are going to be looking constantly at the 

value of each of those delivery reform issues going forward. We 

have to be accountable, as physicians, for making sure that we are 

getting the job done and for the outcomes and the quality of the 

work that is being done. 

And the new models that will be tested, are being tested, that 

are on the road right now being looked at, are going to give us that 

information, because up to now, we have not had that information. 

So it is very important going forward that we look at a variety 

of models, that we recognize the importance of the practice environment, be it a small practice, a large integrated group, or what have 

you. It is going to be very important that we look at all of those 

and take into consideration the practice. 

9 

The CHAIRMAN. You are always talking about models. What models are you talking about? 

Dr. HOVEN. Well, we are talking about the primary care medical 

home model, for example. Glenn could speak to that as well. That 

is one of the models we are talking about. Bundled payments, 

again, another model, and Frank could probably speak to that. 

So these are out there in play right now as we are talking. 

The CHAIRMAN. How long until we know whether and which of 

these models might bear fruit, which ones work? 

Dr. STREAM. I would speak to the CPCI, the Comprehensive Primary Care Initiative, currently recruiting practices through the Innovation Center. And its goal is to align the payment methodology 

to support the Patient-Centered Medical Home so that payment for 

support is continued fee-for-service. The care coordination fee that 

I had mentioned that provides payment not in the fee-for-service 

system—that has to do with coordinating care. 

But the answer to your question, Senator, is that the shared savings component of that model breaks down those silos, and there 

is a potential for shared savings from reducing hospitalizations, reducing ER visits, reducing complications of chronic illness that result in expenses like the dialysis for diabetic patients. 

If you only look at the shared savings in the medical home based 

on the physician services, there is too little skin in the game for 

the physician. But if the shared savings model looks across the 

silos, then there is a win-win for the physicians making the effort 

that the medical home cannot—— 

The CHAIRMAN. So you think there is potential—— 

Dr. STREAM. Absolutely. It is a game-changer. 

Senator NELSON. Mr. Chairman, accountable care organizations, 

are they not to address this? Isn’t that why we put them in the 

health care bill? 

The CHAIRMAN. Partly, yes. 

Dr. STREAM. Partly, but at a more global level. I mean, that is, 

systemwide—integrated delivery system, a large multispecialty 

clinic—that type of model. I am talking really down at the level 

of supporting the primary care that is necessary for a highfunctioning system, whether it is in an ACO or separate. 

Senator WYDEN. Mr. Chairman, I think what both of the doctors 

were talking about is the Independence at Home model that we got 

in the Affordable Care Act. You all and the oncologists are making 

the point that most of the Medicare bill today goes for the chronically ill. That is where most of the Medicare bill goes. And through 

approaches like Independence at Home—and we have seen these 

demonstration sites begin, and I was very pleased that it was in 

the AMA’s testimony—we could take a much bigger population, 

number one; leave the patients in a position to be happier, as the 

oncologist noted; and start tiering the payment system to reward 

those kind of efforts. 

And I really appreciate what the AMA has said, and let me hear 

from the oncologists as well. 

Dr. MCANENY. Thank you, Senators. I do have the opportunity 

to approve a model with this Innovation Center grant which allows 

physicians to control those things that we really can take control 

10 

over. There are a lot of parts of health care, the cost of drugs, that 

we have no ability to manage. 

But we can manage the site of service, and we all know that it 

is a lot less expensive to treat people in our offices than it is in 

emergency departments in hospitals. 

And in this grant that we wrote, we used data—and I agree that 

data is key—from our own practice showing how much money we 

could save Medicare in one small practice in New Mexico by keeping people in the office, aggressively managing the disease and the 

side effects of treatment, so that we keep people out of the hospital, 

we keep them healthier, and we keep them out of emergency departments, and we can use less imaging. 

Those are the things that doctors can control. And so, with six 

other practices across the country, we are going to demonstrate 

that, if we create ourselves as an oncology medical home, that we 

are ready to accept a bundled payment. Give us a payment that 

will allow us to take care of these patients. 

It will cost more in the outpatient arena, but the costs are by far 

made up for in the inpatient setting when we keep people 

healthier. We think we can generate true savings in that manner 

and better care. 

Senator STABENOW. Mr. Chairman? 

Dr. Weaver, could you talk a little bit about—I know Henry Ford 

is part of one of the eight multi-payer primary care demonstration 

projects. 

Dr. WEAVER. Yes. I want to give a couple of examples where we 

might have savings. And that is, one of the things that CMS is 

starting to do, which I must applaud—and Dr. Stream alludes to 

this—is paying for some care management. That means supporting 

the infrastructure, which may be nurses, medical assistants, parttime pharmacists, really not doctor stuff. This is stuff that keeps 

people on their right care plan, as well as keeps them out of the 

hospital. 

In Michigan, the Blues, along with CMS and all of the payers, 

have rewarded physicians in primary care an extra $7 to $9 per 

member per month to do care management. They must meet certain quality standards. They must meet certain utilization standards to qualify. 

The State itself this year, because of this project, thinks that the 

dual-eligible expenses to the State will drop $38 million. So that 

up-front investment to allow more care management has helped. 

I will give another example. The Blues in Michigan fund cardiac 

procedure registries. And the only thing that they require is that 

you must submit all of your data and you must meet quarterly to 

discuss the data among all of the participating hospitals. It has led 

to huge reductions in procedure complications and improvements in 

quality. 

They did the same thing for bariatric surgery, and they got together, they made a database, doctors got the data back from the 

patients on whom they operated, and complications from bariatric 

surgery have dropped 30 percent, and readmissions for patients 

who had bariatric surgery have dropped 35 percent. 

So I point out that care management, as well as registry data— 

I will tell you, again, doctors are data-driven. If you give them the 

11 

infrastructure so that they have clinical data that they believe is 

credible, they will respond in ways to improve the quality of their 

patients. They all want to provide the best quality care. 

Senator STABENOW. Just as a follow-up, though, Dr. Weaver, and 

maybe for anyone, we have this quality reporting initiative that we 

set up under Medicare, and we only have about a third of the physicians right now who are actually using it. And in 2015, it goes 

from an incentive to a penalty. 

What are the barriers? Why aren’t more physicians doing it, 

since we are talking about a data-driven system? 

Dr. WEAVER. Well, let me respond to that, at least my feeling, 

and that is, CMS is currently promoting a lot more transparency 

with data. But the measures that are reported—readmission rates, 

smoking cessation, and these things—they are very, very crude 

measures of quality, and they do not really accurately tell you 

whether you have a good doctor, a great doctor, or someone who 

is not so good. 

The CHAIRMAN. What should they report? 

Dr. WEAVER. I think that they want—as others have suggested, 

they want to report the things that they think are important and 

that they have developed within their own specialty societies that 

they believe are the most important problems: here is how to measure them, give us the data back so we can benchmark against our 

peers, and they will improve. 

Dr. MCANENY. If I might respond to that as well, oncology, for 

years before this came up, developed the Quality Oncology Practice 

Initiative, which was a bunch of oncologists sitting around asking, 

what can we do, what could we measure so that we can improve 

what we do? 

This costs money for our practices to participate in, but thousands of oncologists have already participated, willingly spending 

that money to do a better job. And we can craft measures that really are pertinent to what we do every day, and when we complete 

one measure, then we can say, ‘‘Okay, everybody has that. Let’s 

move on to the next thing. Let’s do the next step.’’ And each of the 

specialties can do that to create their own quality system instead 

of having a broad-brush, generic measure. 

Dr. WEAVER. As well as, it will be more flexible. I think about— 

and I am sure all of you have heard about the time-to-treatment 

in people with heart attack. Well, the College of Cardiology put together a program many years ago, and hospitals moved from hitting the goal 50 percent of the time to essentially 100 percent everywhere. 

Doctors want to move on to the next issue after that. You have 

that one done. And you cannot regulate this iterative process. You 

have to allow the specialty to see where are the voids right now 

and incent physicians to participate and make sure there is infrastructure in order to collect this kind of credible clinical data, and 

you will have a much more reactive and fast turnaround in improving quality. 

The CHAIRMAN. Senator? 

Senator BINGAMAN. One of the things we tried to put in the Affordable Care Act was a focus on reporting about outcomes, because 

it seems to me that a sort of underlying or overarching dataset that 

12 

should sort of span all of the various specialties would be, how do 

we get accurate reporting on outcomes for patients? 

Is that realistic? Is there a way for someone, for CMS or the government or anybody else, to say, ‘‘Okay, here is what we want reported on that relates to how well people are doing after they get 

this treatment’’? 

Dr. Opelka? 

Dr. OPELKA. If I could. Thank you very much for that question. 

The College of Surgeons’ registry programs are risk-adjusted outcomes reporting, and it is very effective. 

So, for example, in the field of general surgery and vascular surgery in over 500 hospitals, we collect roughly 100 to 130 data elements over 30 days on a patient’s care. That data then churns out 

into a risk-adjusted expected outcome, and we measure the actual 

outcome against the expected. 

That is very meaningful to the delivery system. And these are 

team-based care systems. It is not just the surgeon. It is the 

nurses, it is pharmacy, it is everybody there, it is primary care, it 

is linking to my colleague here. 

I do not have good surgical outcomes unless I have a good patient to work with to begin with. So I can now measure and see 

what are the drivers for better care. 

We have actually been working with CMS, and really I applaud 

their efforts in performance measurement. We had to start somewhere, and we started with measures that were less than perfect, 

but it has moved us all. 

Data is a drug, and we are addicted to it. We cannot get enough 

data, and we want meaningful, actionable data. So we partnered 

with CMS and started to show them how the current datasets they 

have do not get them the answer they want, and we are showing 

them more meaningful datasets. And where we need help is, how 

do we actually expand this infrastructure beyond 500 hospitals into 

4,000 hospitals, and how do we link this beyond surgery into surgery and primary care, across a patient continuum? 

So it is not about how well I took someone’s colon cancer out, but 

it is more about how well the 18 months of critical cancer care 

drove the best outcome for that quality. And we are closer today 

than we ever were, but there are a lot of things that we need to 

do, some infrastructure components we need to build upon and 

build into the business models, so everyone is aligned and we all 

have shared incentives. 

We are really very excited about going forward, and we actually 

are looking forward to taking that next step. 

The CHAIRMAN. Dr. Stream? 

Dr. STREAM. Just as I do not think there is a single payment solution across all specialties—because there are unique differences 

in the question about quality—the issue for primary care is often 

about treatment of chronic illness, and the payback time to have 

good outcomes might be 5, 10, 15 years. 

My good diabetic management of my patient today is to avoid 

them being on dialysis 10 years from now. So instead, these quality 

measures use proxy short-term measures: what is your blood sugar 

control, have you had your feet checked, have you had your diabetic 

eye examination? 

13 

So we end up using these proxy measures that are not truly outcome measures, because the timeline is too long. And then you get 

into a debate about, are the proxy measures the right measures? 

And to Dr. Hoven’s point about developing good measures, we 

want to make sure that those are valid measures that reflect reality, that they are the things we should be measuring and should 

be working to improve to get those eventual outcomes. 

The CHAIRMAN. Go ahead, Jon. 

Senator KYL. That is all right. Maria had her hand up. 

The CHAIRMAN. Maria? Senator Cantwell? 

Senator CANTWELL. I want to follow up, Mr. Chairman, on quality and outcomes. 

You were talking about, obviously, quality and outcomes, and one 

of the things in the Affordable Care Act is moving to this valuebased modifier system. And so, when you look at what some of the 

estimates are on Medicare waste—$120 billion per year due to unnecessary tests and procedures. 

So, have we not proven that we can deliver better care at lower 

cost, and now it is just about figuring out how to implement that 

system so that people are, as you were saying, incentivized to do 

the right thing as opposed to the—— 

Dr. HOVEN. I can jump in on this, if I might. This is a good first 

step. I think, clearly, the concepts are in there. What we have to 

now do is look at the methodology, be sure that the methodology 

is appropriate for what we want to get accomplished, and that it 

gets us to a good place. 

But I do think it is a good first step. We are in the process of 

reviewing all that. It just came out in the new rule. So I think we 

will be getting back to you all on that. But I do believe it is a good 

first step. 

Dr. WEAVER. Let me make a couple of comments, Senator Cantwell, about this, and they are about value-based reimbursement. I 

personally am very worried about the way it is structured. 

It plans to use Physician Quality Reporting System measures, 

some prevention measures, and as well, look at cost that is regional. And I have to tell you that what people have said today is, 

you need meaningful, credible data in order to do any adjustment 

for what the outcome or what the cost should be. 

I lived in Seattle. When I moved to Detroit and I looked at patients who had heart failure, I had never seen a population like 

this before. They would never get adjusted for adequately with administrative data. 

You have a population in which 25 percent of the people graduated from high school. They are working just to stay alive. You 

have people who have burned out their kidneys with longstanding 

hypertension when they are 35 years old. I never saw that in Seattle. 

These patients in Seattle and Detroit both have heart failure, but 

they are very different people, very different kinds of people. And 

so, taking crude measures to try to adjust severity and adjust payments would be a huge mistake, in my mind. 

And so the value, if you will, of some of these specialty initiatives 

is that people literally spend many, many, many hours trying to 

figure out what is going to be legitimate here when you do risk adVerDate Nov 24 2008 16:51 Aug 08, 2013 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 R:\DOCS\82118.000 TIMD
14 

justment and what is not, and they are the experts. They understand the disease, and that you have to be very careful. 

The other thing that the cardiologists have been using is Appropriate Use Criteria, and what these are are, a panel gets together, 

including a panel of payers and the physicians and other experts, 

and they look at a lot of conditions for which we really do not have 

solid guidelines. It is just the science is not there. And they say, 

‘‘This seems to be reasonable, knowing what we know, and this is 

not so reasonable.’’ 

A year ago, we started providing feedback to the hospitals on the 

use of stenting, and there were a proportion of cases in which they 

were considered to be unnecessary or inappropriate. Now, we never 

expect that number to be zero because there are individual differences and so on, but you ought to be pretty close to what the 

national benchmarks are for these numbers. And so we have seen, 

since we have started producing this, a decline in that number. 

And, in fact, if you look, there has been a decline in stenting procedures the last year or 2 years in the U.S., and it is predicted to 

go down further. 

So providing credible data, giving it back to those docs, will 

change the way in which they behave. 

Senator CANTWELL. I certainly believe in credible data. And I do 

not know, Dr. Stream, if you want to weigh in on this. 

When I think of Spokane, I think it is a great place, and I certainly think that the city title of ‘‘near nature, near perfect’’ is a 

good symbolism, but I do not know that we are talking about 

healthier populations here or we are talking about healthier practices. And I certainly think we have healthier practices in the 

Northwest, rewarding things that have driven down cost and produced better outcomes. 

And frankly, people in our region are very frustrated that we deliver care that way and get less reimbursement, and less people 

want to go practice there, because somebody can go practice somewhere else where they can run up the bill to the America taxpayer. 

And my constituents, they will be happy with good data, but just 

to assume that they are healthier and that someplace else is sicker 

and we should just pay more, is not going to work. 

And so I am glad we are moving down this track, and I guess 

we are just going to have to focus on what good data is. 

So, if you have any comment on that, Dr. Stream, and also on 

what we need to do to encourage graduate medical education. If we 

are looking at the numbers that we are looking at to get medical 

homes in primary care, we have a big gap right now encouraging 

primary care physicians. And what do we need to do for graduate 

medical education to really get that workforce plugged in? 

Dr. STREAM. So, several questions in there. Certainly, we need 

good data about all of these things, care practices, but populations 

do differ somewhat. Inner city populations with more poverty, less 

education—those social determinants of health have a huge impact 

on the health of our public. 

So we need good data about both so that, if we are making risk 

adjustments, they are true and accurate. 

I can speak to value-based purchasing as not necessarily a program, but as a concept that applies to primary care, and we absoVerDate Nov 24 2008 16:51 Aug 08, 2013 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 R:\DOCS\82118.000 TIMD
15 

lutely have to build a stronger primary care foundation if we are 

going to have any success improving the quality and cost-effectiveness of our health care system. 

And that really is this blended payment model that supports the 

Patient-Centered Medical Home model, decreasing over time the 

importance of fee-for-service, having a meaningful care management fee that does this care coordination, prevention, and wellness. 

And then the piece that gets to your question is that shared savings piece or, if it is pay for performance, it could include both 

quality measures and appropriate use efficiency sort of criteria. But 

that would be that third leg of the stool about payment to support 

primary care. 

But you are also right, and I appreciate you teeing it up, about 

the workforce issue. And I would emphasize that decisions made 

that influence specialty payment have a huge influence on specialty 

selection of our medical students and currently have a strong disincentive for people to choose primary care. And we have to narrow 

that income gap between primary care physicians and median subspecialty income to have the impact we want. 

Senator CANTWELL. And just for what everybody has been talking about, do we have the workforce now to implement the strategy 

that we are talking about? 

Dr. STREAM. Absolutely not. 

Senator CANTWELL. All right. Thank you. 

Dr. HOVEN. If I could follow up on that, Senator. The whole issue 

of medical school education, graduate medical education: we at the 

AMA have been looking at this very critically. And this is a problem which preceded current issues surrounding payment and delivery. This is not new. 

Looking at spots for graduate medical education, changing the 

curriculum in medical schools, making sure that primary care is 

being taught and rendered in places not necessarily traditional for 

primary care education, that we are opening and expanding the 

venues in which we can do the education, is really important. 

So all of these things are on the table as we talk about it. It 

takes 7 to 10 years to grow a doctor, and we have to get those slots 

filled out. We have to have more funding towards that as well, and 

it is one of the priorities that is part of this whole discussion. 

Senator CANTWELL. Thank you. 

Senator KYL. Mr. Chairman? 

The CHAIRMAN. Senator Kyl? 

Senator KYL. Thank you very much. When I first started law 

school, one of the things that was impressed upon me was the difference between a profession and a business, and it was all about 

the individual client. You had to give your absolute commitment to 

that client, whether the client could pay or not and regardless of 

their idiosyncrasies and so on. 

And I began to practice insurance defense work and found that 

it was true in spades of the medical profession. Data is collected 

to provide information about averages, but every patient is an individual. And I know that all of you are committed to treating every 

one of your patients as an individual. 

The rub comes when you are treating patients who are paid for 

by the U.S. Government under a set formula of one kind or anVerDate Nov 24 2008 16:51 Aug 08, 2013 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 R:\DOCS\82118.000 TIMD
16 

other. And my question to you is, in devising—and we recognize 

that the formulas, the pay scales, however they are going to become embedded in a replacement for SGR, will need to be developed by the professions themselves to take into account individualized circumstances, including regional circumstances in the country, as Senator Cantwell was just pointing out. 

But my question is, is sufficient attention being given to the requirement that the care really be patient-centered? When the patient walks in the door, I have one obligation and one obligation 

only: to take care of that patient to the best of my professional ability. But at the end of the day, I have to get paid, but not to have 

the payment drive the care. 

And then a second sort of related question is, when we deal with 

this, because of our unique budget requirements here in the Congress, we have to set a 10-year plan out. And it is very hard for 

us to know whether the 8th and 9th and 10th year are going to 

work with what you are recommending for us in year 1, 2, and 3, 

and so on. 

And just for our own purposes, I wonder if you have any suggestions for us. And if you want to think about this and get the information to the chairman later, how would we devise something that 

we think is going to work over a shorter period of time, even 

though we really do not know over the longer period of time? That 

was one of the problems with SGR to begin with. 

Thank you. 

The CHAIRMAN. Dr. Opelka? 

Dr. OPELKA. Mr. Chairman, thank you. And, Senator Kyl, thank 

you for the question. 

Two responses to this, in my mind. Where we begin with performance measurement and valuing services is still in the silos of 

care. It is in the various different performance programs, and it is 

not as patient-centric as it could be. 

And, as we start to spread performance measurement across 

bundles and ACOs and we look at population-based performance, 

how well we are taking care in a continuum, and we start sharing 

the attribution, it becomes more patient-centric. 

So where we were 3 or 4 years ago when we started really pushing hard on physician performance measurement was just at the 

beginning: how do we begin to measure individual physicians and 

reward them, the hospitals, and reward them? 

We have grown over the last couple of years to start to understand some of the points made by my colleagues at this table and 

from input from all stakeholders, from the purchaser groups, from 

the private payers, from patients, who are helping us look at this 

and say, ‘‘Well, this is a better measure because it really is more 

meaningful to the patient.’’ 

And as we move to that, it does not necessarily fit within the 

payment structures or silos of payment. So we have to look at alternative payments, which is my second point, and that is where 

we have proposed replacing the SGR with a value-based update 

which says, let us pick a target. We want to improve cardiac care 

this way, and it is not just the cardiologists, it is primary care, the 

cardiologists, it is the cardiac surgeons, it is anesthesia, it is pulmonary, everyone who touches that patient will be involved in inVerDate Nov 24 2008 16:51 Aug 08, 2013 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 R:\DOCS\82118.000 TIMD
17 

centives; that is the target we want to get to, and let us strive to 

get to that target. 

So I think we are becoming more patient-centered. We are not 

quite there yet, but we think replacing the SGR with something 

that actually is patient-driven targets—does it get to 8 to 10 years? 

I hope so, but it may take us 8 to 10 years to even get to that 

point. 

Will it be something else, 12 years from now? We are always 

evolving this. So I am not going to say this is forever. 

The CHAIRMAN. That is a fascinating question. Does anybody 

want to respond to that? Yes, Dr. Stream? 

Dr. STREAM. I would like to respond to the patient-centered part. 

And I agree completely. When a physician is in an examination 

room with a patient, the patient’s best interests should be the highest priority, making sure that that patient gets the treatment that 

they need that will improve their health, improve their quality of 

life. 

But what we are finding is—and it goes to Senator Cantwell’s 

comment—we know that our system currently provides care that 

people do not benefit from. And my responsibility as someone’s 

physician is to make sure they get the care that they need but do 

not get care that does not enhance their health. And that is where 

I think—and it does not give an easy solution to the SGR problem, 

but it is a potential for cost savings, to eliminate care that does not 

contribute to people’s health. 

And that is an area where Dr. Weaver was mentioning stenting 

data, and the power of that information—physicians want to get Aplus in their scores, and so, when they are comparing themselves 

to one another, that is another aspect of professionalism, excellence 

in your profession. So we need that going forward. 

The CHAIRMAN. Thank you. Dr. McAneny? 

Dr. MCANENY. Thank you, Senator. 

Senator Kyl, I think one of the answers to your question about, 

why is the care not as patient-centric as it could be, is in the silos 

of payment, that we pay by area of the country. So that areas such 

as our area in the west, New Mexico and Arizona, have lower payment rates for the same service. 

There are differentials in the site of service; the same service in 

a different setting, a hospital, a physician office, is paid for differently. 

If we had the payment follow the patient more, that would do a 

lot to go patient-centric in terms of how we focus on that care. And 

I think breaking down some of those silos so that the money can 

follow where the patient is best treated will allow us to move patients from more expensive sites of service to less expensive sites 

of service and make that a very valuable part for health care. 

I am also very concerned about the whole workforce issue. ASCO, 

American Society of Clinical Oncology, did a study some years ago 

looking at the number of oncologists that we are currently producing versus the number that we are going to need in the next 

decade, and about a third of cancer patients may never be able to 

see an oncologist because there simply are not enough of us. 

So we are working hard on trying to create new teamwork methods of care so that we can get the expertise we need out to those 

18 

patients, put them in the right side of service. I think the most expensive drug we give someone is one that does not work. We are 

hoping that with personalized medicine and with very good techniques of figuring out what will work on a given patient’s cancer, 

we will be able to avoid a lot of those unnecessary processes that 

you are talking about. 

Doctors are really interested in doing that. It does not benefit us 

at all to go to a patient and say, ‘‘I’m sorry, this didn’t help.’’ 

The CHAIRMAN. Senator Hatch? 

Senator HATCH. In my earlier life, I was a medical liability defense lawyer, defending doctors, hospitals, nurses, health care organizations. And we used to tell doctors, ‘‘You need to overdo everything. You need to make sure that that history of that patient 

shows that you went way beyond the standard of practice in the 

community,’’ so that if you ever did get sued, you could at least say, 

‘‘We went way beyond what really the average doctor would have 

done.’’ 

In the process, I became convinced that unnecessary defensive 

medicine—we all want necessary defensive medicine, but unnecessary defensive medicine is extremely costly. 

If I was a doctor today, I would be doing exactly what my advice 

was 37 years ago, and really doing everything I possibly could. I 

do not expect you to opine on what it is costing the health care profession just for unnecessary defensive medicine, but it is a whopping amount of money, a lot more than the CBO says. I remember the CBO Director said $10 billion a year. I chatted with him, and he finally came up with around $50 billion a year. 

But I think it is approaching $200 billion or $300 billion a year 

when you consider how health care is so important in our lives 

today. And a lot of that is because we just cannot seem in the Congress to resolve this issue so that doctors can handle it. 

Now, I would like each of you to give some thought—I have really enjoyed your comments here today. But I would like each of you 

to give some thought and maybe even send in writing to us what 

we might do. 

You have Democrats who do not want to offend their personal injury lawyers. You have Republicans who do not think there has 

ever been any reason to sue for medical liability, not many, but 

there are some. But you have the two extremes, in other words. 

And it would be wonderful for us to get, especially from the 

American Medical Association, but from each of your groups, just 

what you think this is really unnecessarily costing our society because of medical liability concerns. 

I would like to have you take the time and send that to me, if 

you would, but certainly to the committee. 

Let me just ask one other question, because, interestingly, we 

hear about the death of the private practice today. Indeed, many 

experts who track the health sector have raised concerns about the 

uptick in hospital acquisitions of private practices. And this is for 

any of you who care to answer it. Do you believe hospital acquisitions are occurring at a greater rate, and, if so, what is causing the 

trend and is it likely to continue, and what are the implications for 

the cost of care in the Medicare programs? 

Yes, ma’am? 

19 

Dr. MCANENY. Senator Hatch, I think you have hit the nail right 

on the head. I know that in 2010, about a quarter of oncology practices were sold to the hospitals, and I think the statistics were closer to 50 percent of cardiology practices. 

Part of that, again, is the economics. Under the physician fee 

schedule, we are paid about two-thirds of what the same service is 

paid for under the hospital outpatient Prospective Payment System. 

So a hospital outpatient department can be paid significantly 

more for the same service. And I think that we will discover—in 

our workforce study, we also looked at the volume of patient care 

given by a hospital-employed physician versus a small business private practice physician, and there was about a 60-percent difference. 

At a time when we have a shortage, I am not sure we can afford 

that. I am not sure we can afford to pay more for the same service 

in this time of escalating health care costs. 

I think we really need to look at very efficient mechanisms to rearrange how we deliver that care and go for the most cost-effective 

site of service. 

Dr. HOVEN. If I could jump in on that as well, I think we have 

to be careful, though, because hospitals, along with physicians, if 

they are collaborating together to do improved outcomes, cut the 

cost. If what they have in place is working, we have to look at that 

side of the coin as well. 

So I think this must be a balanced discussion going forward. We 

have great concerns about this. And I would agree with Dr. 

McAneny, but we must look at the balance of this, because I think 

there are some systems out there that are working to make it better for physicians and the hospitals and patients, most importantly, 

to get the job done. 

Dr. WEAVER. I would just add to what my colleague said here, 

that there has been a major change in cardiology. It is not everywhere. But in Indiana, 95 percent of the cardiologists work for 

some health system or hospital, and there has been a great move. 

And as best we can measure, a lot of it is due to just the uncertainty right now in finances. It is like, if you have a practice, and 

these are small businesses, what are you going to do at the end of 

the year if there is a huge change in physician payments? 

I saw people in the Detroit area, some physician practices, for instance, when we had a delay in kicking SGR down the road and 

there was nothing coming from Medicare, it was either—it was like 

they were worried about paying their staff. They did not want to 

lay their staff off, whose husbands may already not have a job and 

that sort of thing, and they went bare for weeks. And that uncertainty says, maybe I should do something with a little more security to it and be part of a larger health care system. 

So, if you want to integrate us all, that is a good way to do it: 

just create a lot of uncertainty. On the other hand, as Dr. Hoven 

points out, when you have doctors and hospitals working closely together—because now you have solved the alignment problem—they 

will align and try to create better value. 

20 

The CHAIRMAN. We have an SGR problem facing us, and it is not 

very far off when we have to extend. Do we just extend it again 

another year? If we do not, what changes do you suggest? 

These are all great ideas. It is fascinating. It is very stimulating, 

this discussion. But we have a practical question looming, and that 

is, what do we do about all this in the short term, as well as longterm? 

To me, I mean—Senator Kyl asked the question about more individualized treatment. I guess the question of personalized medicine, all this fancy stuff you read about in the papers, the genome 

sequencing and DNA sequencing, and especially in oncology—— 

There was a very interesting article a few days ago about a lady 

who got a very fancy treatment, a specialized cancer treatment, a 

unique cancer, and it actually cured her, but then she died 2 weeks 

later. 

Then there is stem cell research developments that are going to 

occur over time. Things are just changing so quickly. 

So how in the world—what should we do in the short term and 

what should we do long-term? What should the Congress do in the 

short term and the long term as we deal with this practical problem of extending the SGR? 

Dr. OPELKA. Mr. Chairman, we have included in our testimony, 

the first bit, the foundational elements of our thoughts from the 

American College of Surgeons about replacing the SGR. Now, in 

terms of how to pay for it, I cannot go there. 

The CHAIRMAN. Unfortunately, we have to go there. 

Dr. OPELKA. Yes, sir. But that is a higher authority than I have. 

So, when I look at this though, what do we replace this with? Within this entire context of this discussion we are having today, we are 

all moving from the volume world to the value world, and we think 

that is the replacement. And we think it is a patient-centered approach that should be taken. 

We think you set the updates by setting targets based on value. 

Did we achieve this value? And it is a patient-centered target. 

What do we need to do in the 10, 15, 20, 100 measures that we 

have in surgical care? What do we need to focus on for those patients as targets that then drive an update? And those have to 

have a down-side and an up-side. 

What do we do in chronic and preventive care to drive improvement with my colleagues in primary care? What are those targets? 

What do we do across all of cardiac care? We need to set targets. 

We have hundreds of measures today. If you look at the National 

Quality Forum’s measure library, there are over 800 measures in 

there. Which ones are critical? Which ones are going to be meaningful and actionable and are meaningful enough to you as targets, 

that this is better quality care, safer care, and more affordable 

care? Let us set those out as targets and then award the SGR target, replacing it with a value-based target, and make it a patientcentric target. 

That is our proposal, in short. And what do we need to do in the 

short run with that? Some initial pilot modeling and how we actually begin it. We are building the alliances across the specialties of 

medicine to do this. And then, how do we roll it out and phase it 

21 

in? And we have a 4- to 5-year phase-in plan that we think can 

be implemented with, yet, some roll-your-sleeves-up work. 

The CHAIRMAN. Now, is this for surgeons, or is this for other specialties as well? 

Dr. OPELKA. It is for the patients. It is across all patients. 

The CHAIRMAN. All patients and all care. 

Dr. OPELKA. It includes rural programs, it includes chronic care 

prevention programs, it includes—instead of being surgery-related, 

it is patient-centered. What is a digestive disease program that we 

need to improve, which would be gastroenterologists, primary care, 

and surgeons? What are cancer programs, which is not just oncology? It is radiation therapy, surgeons, and primary care. 

You cannot get away from primary care. They are tied to every 

one of us. How do we set targets that actually—we can go out to 

the community at large and say, ‘‘We have a problem in this area 

in this country, and we are going to set a target to improve it.’’ 

The CHAIRMAN. Dr. Weaver? 

Dr. WEAVER. Just a couple of comments. I think what you have 

heard from all of us this morning is, unfortunately, these improvements are going to be iterative. They are going to take time. They 

are not going to be there on January 1st. 

I will give you an example, though, of something that did happen 

on January 1st of this year in southeast Michigan, and that is, the 

larger employers changed patient deductibles from very modest 

numbers to $3,000 and $4,000 per person. I can tell you that the 

amount of health care these people are getting dropped dramatically. 

People’s co-pays went up. They do not come to see the doctor. 

They decide when they are going to see the doctor. And unfortunately, I mean, it reduces costs a lot, it reduces utilization a lot, 

but patients do not have the ability to know what is valued and 

what is not valued in their care. 

And so they put off prevention, they put off things that ultimately are going to cost us all a lot more. But increasing co-pays, 

increasing deductibles, will change the amount of health care dollars that are spent immediately. 

The CHAIRMAN. Dr. Stream? 

Dr. STREAM. You mentioned personalized medicine, and we have 

this fascination in America with high tech genomics and things. 

One of the most important features of people’s health and wellness 

is having a personal physician, a usual source of care. They get 

their prevention and wellness, they get their acute care needs 

taken care of, their chronic illness care. 

And the way that we are going to save money in the long run 

is in investing in primary care in this Patient-Centered Medical 

Home, and we need to align our payment system to do that. As 

Senator Cantwell mentioned, we do not have enough primary care 

physicians. And so we need to invest in our workforce, in reforming 

our graduate medical education system. 

We are seeing this play out in the private sector with private 

health plans. The Patient-Centered Primary Care Collaborative is 

a national organization that is employers and payers and patient 

stakeholder groups that are really already documenting tremendous success in this direction. 

22 

Senator KYL. Mr. Chairman, you asked a key question that we 

asked these people to come here and advise us on. Are you ready 

to present to us, as the experts, a process, a methodology for payment that we could institute on January 1st with some assurance 

that the costs would be within a certain range to the Federal Government and meet the objectives that I think we all agree on here; 

or, if you are not going to be ready to do that then, what would 

you recommend we do? 

Would you recommend we do an update, a positive update, of 1 

percent or 2 percent, with some reporting requirements and 

phased-in pilot programs and so on during that year, so that January 1st a year later, we could make decisions about specific payment methodologies that would go across the board? 

In other words, respond to the chairman’s question here. We are 

going to have to make a decision in 6 months. What do we do? 

The CHAIRMAN. Dr. McAneny? 

Dr. MCANENY. Thank you. Again, a very important question. I do 

not think any of us are prepared to answer that very quickly. This 

is a huge—it is a 7th of the economy in health care. We are not 

going to be able to fix it by January 1, 2013. 

I think a 30-percent cut will put many practices and many hospitals out of business, and that will cut the amount of health care 

that is delivered. But I do not think that is the intention of any 

of us. 

So I think that, again, we are going to need another positive update. AMA data has shown that, for the physician fee schedule, we 

are currently being paid at 2004 levels. The light bill is not at 2004 

levels in my practice. 

I think we need some time and some stability where we can do 

some pilot projects, because what works—even in my practice in 

New Mexico, the things that work in my Gallup clinic in the heart 

of the Navajo Nation are not going to work in my Albuquerque clinic or in my hospital-based Silver City clinic. There are different 

mechanisms that will be there. 

The Innovation Center got thousands of people, thousands of doctors, wanting to give ideas about how we knew we could save 

money in giving care. So we would like very much to know that we 

had some degree of a period of stability, where we know we could 

count on Medicare to not pull the rug out from under our practices 

and from under our patients, so that we could then work with various pilot projects that can be area-specific, part-of-the-countryspecific, specialty-specific, or integrated across multiple specialties, 

to be able to do that. 

I am hoping my Innovation Center grant will prove to you that 

we can take a bundle of payments, take care of patients through 

a continuum of care, and be able to save money. But it is going to 

take us some time to be able to rearrange this system. 

The CHAIRMAN. Dr. Hoven? 

Dr. HOVEN. Thank you. A very, very important question. Updates 

and stabilization, you have heard several now speak to that. I 

think the question of stabilization for practices is a huge and key 

issue going forward. 

There is a huge amount of work out there already underway, 

Senator Kyl, on the models, the way we deliver care and how care 

23 

will be paid for. They are going to be multiple in type, not one size 

fitting all. These practices cannot endure that because they are different, based on the practice, the location, the patients served. 

So we have to be willing to say there is probably going to be 

more than one delivery system. There may be more than one payment system to follow that delivery system as well. But we will not 

know until we do that. 

One of the things which you all could do now would be to allow 

physician practices to roll into a model of whatever they choose to 

do when they are ready to do it so that there is not a limited window of time. Right now, the window opens and then it closes, and 

nobody can get in there and get the work done to get ready for the 

infrastructure changes to happen. 

In rural and primary care practices in parts of this country, getting the funding out there to help them get the infrastructure is 

a key issue. It has to take place in order for them to be participants. But we cannot expect them to change overnight. 

But we can get them enrolled in these programs if we provide 

them the wherewithal to do it and the timing allotment that will 

do it. 

The other thing we have to do fairly quickly is the Medicare data 

system. And you have heard repeatedly now today, we have to have 

the data that we need in order to do the quality work. 

Physicians want to participate in the quality programs and, in 

fact, in some of the earlier discussions, the relevance of the measures, et cetera, being used, the whole issue of the mechanics of the 

way these programs work—they do not work particularly well for 

physicians. 

And then, again, another opportunity here is what we refer to as 

the deeming opportunity, which was in our written statement, 

which allows physicians who are already participating, like Dr. 

McAneny’s program, in a very high quality program with improvement outcomes, let that count towards this entire issue of physician participation. 

So those are some fairly straightforward things that could be 

done in the short term as we get to the final payment and delivery 

models that we are going to end up needing to use in this country. 

The CHAIRMAN. What is the Medicare data problem that many 

of you are referring to? What is the problem? 

Dr. McAneny? 

Dr. MCANENY. I have an example that I can use from my own 

practice. 

The CHAIRMAN. Sure. 

Dr. MCANENY. We participated in the PQRS, since it was PQRI, 

from the beginning. I am a fully electronic practice. We have been 

paperless since 2002. So I know I have data on my practice of what 

is done. 

Yet, last year, we filled in all the PQRS updates, and I can prove 

that I have the documents for each one of those. Yet, when I turned 

it in to Medicare, we did not get any of those updates. They said, 

‘‘Your data was incomplete.’’ 

I said, ‘‘I have my data.’’ They said, ‘‘No. Ours says you didn’t 

do it.’’ And that is just one small example of some of the flaws in 

the Medicare system in terms of rapid turnaround for data. 

24 

If we are going to manage a population of patients in the medical 

home, we have to have real-time, very good data where our patients are, what care they are accessing, what site of service they 

are doing it in, what are their complications, what are their comorbidities, who are their other doctors. 

We have to have that data practically real-time if we are going 

to be able to save the system money. But if you get data from 

Medicare, you get it a year, a year and a half later, when it is history. We need it now. 

So we really need Medicare, CMS, as a partner to work with the 

physicians to be able to—— 

The CHAIRMAN. So what does CMS say? ‘‘We don’t have the 

money to update our systems.’’ What is their response? 

Dr. HOVEN. They are working with us. 

The CHAIRMAN. Is there a legitimate reason? 

Dr. OPELKA. There is a current structure, Mr. Chairman, that 

the way the data is pulled in and then analyzed, it is, for example, 

2012, we are looking at 2010 data. 

And so, how does that become actionable and meaningful? When 

you get your report, it is really just tied to an update in finances 

and not to clinical care. And we want it tied to clinical care so we 

can make actionable statements about patients. 

So that is the problem, using claims data that then has to be aggregated and analyzed when that year is closed out. And by the 

time it is analyzed and presented, another year has passed. That 

is why we are looking at other data systems that will get to the 

target you are asking us to get to. 

And, if we had access to these other data systems, they are realtime, they allow us to say, that happened last month, that cannot 

happen this month; we need to put an action plan in place to correct that. But that is part of the big disconnect, and it is not for 

lack of trying. It is just the wrong dataset to drive the goal that 

we are trying to reach. 

Dr. WEAVER. The other place you can help us is the private insurance. Their data is much more rapid, but they are not very 

transparent with their data. 

The CHAIRMAN. True. 

Dr. WEAVER. And for us to manage ideally, we should have 

everybody’s data on those patients whom we are trying to manage 

in order to do it best. It allows us to look at claims data and clinical data at the same time. We are prepared to do that, but it is 

almost like it is proprietary to some of these payers. 

They do not want to share it with you, and yet, they are spending millions and millions of dollars collecting it. 

The CHAIRMAN. I know that is true. I met with insurance companies not long ago and they showed me all this ‘‘gee whiz’’ technology they have on claims data. 

Dr. WEAVER. Yes. 

The CHAIRMAN. They know everything about everything. You 

pull back the screen, you would think that you were down in command central somewhere. I asked them, ‘‘What about outcomes?’’ 

And they were a little hesitant at that. I said, ‘‘Well, do you share 

that with your hospitals and with your practices?’’ The answer was, 

‘‘Well, if they’ll pay for it.’’ 

25 

Dr. STREAM. And the challenge for the practice is, you might 

have 10 percent of your population in each of six different programs, and then you have your Medicare data and your Medicaid 

data, and it is not collated in any single place. 

They use the claims data because it is what they have. 

The CHAIRMAN. Exactly. 

Dr. STREAM. But they really need, as we make the transition— 

to change more broadly in our practices, we need to move to providing more clinical data. 

The CHAIRMAN. I would like to press you a little more, if I could, 

though. It is a question I asked and that Senator Kyl asked. What 

do we do short-term, long-term? We have to be consistent, but flexible in different parts of the country. And I think we have some understanding of all that. But we do need some ideas on what to do. 

Dr. STREAM. I mentioned in my opening remarks H.R. 5707. It 

is a bipartisan House bill. I would encourage your consideration of 

its provisions. 

You have heard from all of us the importance of providing some 

predictable stability in physician payment, particularly for primary 

care. It operates on a much thinner margin, particularly in our 

small practices. 

The recurring annual, or sometimes multiple times per year, potential cliff in payment is a huge stifling factor in investing in practice transformation for this future that we know we need. 

So this bill has a repeal, it has a positive update, and then it has 

declines in fee-for-service payments in the later years once we have 

these new models tested to take the place of pure fee-for-service. 

Dr. OPELKA. To the specifics of Senator Kyl’s question, can we 

have something ready for January, it would be a really big push 

for us to push our model to that point. We are just now trying to 

sort through, how do we actually score this and show you the ability that this has to reduce cost and improve quality at the same 

time? 

So, in short, I think we are going to need a bridge, but also, we 

could use help from the Innovation Center as to how we are looking 

at data and how we actually get that data at a meaningful point 

so that we get adequate scoring in the value-based update model 

that we are proposing. 

So there is an opportunity for us to work more closely with the 

Centers for Medicare and Medicaid to actually do the work we need 

to get the scoring of the modeling so that we can, by that subsequent year, give you a more complete package. And we think it is 

in alignment with our entire conversation about value and about 

patient-centeredness. 

So we do believe we can do it, and we are ready to roll our 

sleeves up on it, but we could use some help in getting access to 

and partnering with the knowledgeable side of the Innovation Center and what they could do to add to this. 

Dr. HOVEN. One of the other things I would throw in on this— 

and I agree with what Dr. Opelka has said—is the whole issue 

around care coordination and transition of care. 

The new codes need to be in place. Payment for this—I mean, 

there are going to be some up-front expenditures, but care coordination is extremely important. You have heard that earlier in our 

26 

discussions today. It will result in long-term savings, but we have 

to get the ball rolling and make it meaningful. 

We could talk for hours about how folks fall through the cracks. 

That is not patient-centered, necessarily, although we try like heck 

to make it so. But we do need help in that particular area as well. 

The CHAIRMAN. Senator Thune? 

Senator THUNE. Thank you, Mr. Chairman. Thank you all for 

your insights. 

I know most of you represent more populated areas of the country or work in those areas, but I wanted to just raise an example 

of some of the challenges that we are facing in rural parts of the 

country when we talk about SGR reform and financial stability for 

our health care providers. 

In South Dakota, it should not be any surprise that most of our 

providers are highly dependent upon government payer sources, 

and here is an example of one of the towns in my State. This is 

Chamberlain, SD. It has a population of 2,300 people. It has a 

payer mix of about 40 percent Medicare, 20 percent Medicaid, 20 

percent IHS, and 20 percent private insurance. 

So you have 80 percent of the revenue tied to what tend to be 

unstable Federal payment systems, and they are struggling to keep 

up with reinvesting in critical facility upgrades and nursing recruitment and all those sorts of things. 

And the other point I wanted to make about that is, it is very 

hard to recruit and retain providers, physicians, in some of these 

rural areas. And I am curious to know—I am going to give you another example. In South Dakota, we have an estimate that 27 percent of the population resides in areas that lack sufficient family 

practice, internal medicine, or OB/GYN, which is 48th in the Nation. And so, recruiting and retaining quality physicians has traditionally been a challenge for hospitals in rural communities. 

I am wondering what your thoughts are about the lack of an 

ability in rural settings to cost-shift. Most people in more urban 

settings cost-shift to your private payers. And because the margins 

are so thin with regard to government reimbursements to physicians, and particularly in the primary care area, that is impacting 

the ability of rural areas to recruit and retain physicians. 

You have this high amount of the payer mix that is government 

sources. The cost-shifting that many areas can do is not available, 

at least not on the same level, in some of these rural areas. But 

it strikes me that that is really impacting our ability in the rural 

parts of the country to be able to get people to come out and practice. 

Again, it comes back to the whole point of payment reform and 

what we can do to incentivize physicians to work in these areas. 

I am just curious if any of you have observations about that. 

Dr. STREAM. I currently practice in a small metro area, but my 

first practice was in a community of 2,700 in central Washington, 

12 miles from the nearest hospital. I understand the problem that 

you are referring to. 

And it is largely primary care physicians who are out in those 

rural areas. In most practices, even in primary care, only 20 or 25 

percent of their practice is Medicare with a small Medicaid portion. 

And so it is the measures you describe, but upside down. 

27 

I think what we have to do is, again, realign payment so that it 

supports primary care and use the innovations that we have seen 

in the commercial market, which is, unfortunately, for many of 

your folks, a smaller piece of their business. 

But the medical home pilots conducted around the country and 

coordinated with employers and insurers through the PatientCentered Primary Care Collaborative and others, show huge improvements in health care quality measures, but also, cost efficiencies. And it is the reason that we need the Federal payers to 

be involved in that. 

It is why the Comprehensive Primary Care Initiative is such a 

unique, potentially game-changing program for primary care, including in rural areas, because it is a collaboration between CMS 

and private payers in the local market to pay this blended payment 

model, to support that necessary practice transformation. 

And we know, not only are those practices more efficient and provide better care, but the people who work there are happier, and 

that is an important factor in recruiting to a rural area. 

Dr. MCANENY. Thank you, Senator Thune, for that question. I 

come from New Mexico. We are rural and frontier. So I can relate. 

In the small towns where I provide oncology services—one is in 

the heart of the Navajo Nation, another is in the southern part of 

the State—the primary care doctors ask us to please provide those 

services, because patients were electing to stay home and die rather than drive for hours to get cancer care, which is just too sad in 

this country. 

One of the things that I find is that it actually costs more to recruit doctors, nurses, physical therapists, radiology technicians, et 

cetera, to a rural area than it does to an urban area. In an urban 

area, a doctor who shows up with a spouse, both can generally find 

a job. In a rural area, often, one cannot. And we have to work harder and pay more in rural areas. 

Yet, the Medicare system is set up with the geographic price-cost 

indicators, which penalize those of us who have been in rural 

areas, who have kept costs down. So that, when we try to recruit 

people, we are paid less for someone who costs us more. And one 

thing that Congress could do is to take a very strong look at the 

geographic price-cost indicators that adjust all of our payments for 

these rural areas and look at whether or not they truly still reflect 

the cost of providing care. 

I am an oncologist. If I have to have oncology nurses, I am recruiting through a national market. I advertise nationally for people to come to Gallup, NM. It is not easy, and we struggle with 

that. 

We have set up our own training programs inside the practice to 

train nurses, to pay them more to become oncology-certified. But 

these are things that we are taking on. 

Your description of the payer mix is exactly my payer mix in Gallup, maybe not quite as good as what you described, and that practice is losing money, and I am struggling in a private practice to 

keep it alive. 

If the payments were higher for rural and under-served areas 

and populations with severe health disparities to reflect the increased work it takes to take care of people who are socially disVerDate Nov 24 2008 16:51 Aug 08, 2013 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 R:\DOCS\82118.000 TIMD
28 

advantaged, then you would be able to move some of the doctors 

and nurses and others from the more urban areas into these rural 

areas, and we desperately need your help with that. 

The CHAIRMAN. Would the rest of you agree with Dr. McAneny: 

pay more for those who practice in rural areas? 

Dr. WEAVER. I would not say it is just in rural areas. I would 

say, many inner cities have the same problem. 

Dr. HOVEN. Equal pay for equal work. 

Dr. MCANENY. Right. 

The CHAIRMAN. What about loan forgiveness? 

Dr. WEAVER. I think that is effective. 

Dr. HOVEN. Yes. We do it in Kentucky. 

Dr. STREAM. There are good State and Federal programs for that 

that are very successful. 

Dr. HOVEN. The other point to this question, as well, is empowering those practices not just with payments, but empowering them 

to be engaged in the whole delivery reform process, and that is 

going to be a challenge. 

The advanced payment program, so they can get their IT-health 

information technology up to speed, is a very important one. The 

other thing is working on mechanisms for them to be able to connect to specialists, other folks not just in their primary care role, 

but the specialists they need to help them manage their patients. 

And I think we could do a better job in working out systems to 

allow that to happen so that they get the support and they do not 

feel like they are hung out to dry, like in eastern Kentucky where 

I am from, and that they can provide the care they really want and 

are able to do. 

Senator THUNE. How much EMR interoperability is there with 

facilities? 

Dr. HOVEN. That is a huge issue, a huge, painful issue. There is 

no interoperability. 

Senator THUNE. It has always been that that was one of the 

things that we were addressing and getting better at. We have people come in, experts, and testify that that is not happening. 

Dr. HOVEN. It is not happening. 

Dr. OPELKA. What they are saying and what we are seeing is just 

completely opposed, even within the same vendor, where there is 

a vendor who is version 1.1, and then this institution over here is 

version 2.2. They do not talk even within the same vendor. So 

there is a major barrier there. 

The CHAIRMAN. So how do we incent getting them to work better 

together? I do not think much is going to change until they get 

proper incentives, the vendors. 

Dr. OPELKA. I think there is a lot going on from the Office of the 

National Coordinator in this effort to try to set data standards and 

try to move more consistent data across all these areas. 

Again, the initial move of getting the EHRs out there was, let us 

get everybody digital, and now we have to get digital communication. We have to get the movement of data, and then we have to 

get the meaningful movement of data. 

So ONC is now at the point of data-to-data movement, and their 

next step is, how do we get to meaningful data? We are the 

content-context experts who can give you meaningful data. We 

29 

need to have the ONC standards go out there and say, we will get 

you movement of data, and then we can front-end load that with 

content and context. That will give us actionable data. 

Dr. WEAVER. The other area you can help us with is—I mentioned this before—criteria for, like, appropriate use of testing and 

that sort of thing, which could increase utilization. That is done on 

the side right now. It needs to be in workflow. It needs to be in 

the EMRs. And the EMR vendors are not stepping up to incorporate these kind of decision support tools. 

And that is where we will see changes occur, when we do not 

have to pay extra to collect the data and distribute it versus having 

it part of the EMR. 

The CHAIRMAN. Maybe we should have the vendors here. 

Dr. WEAVER. Maybe. 

Dr. HOVEN. It might help. 

The CHAIRMAN. We can talk to them about this with you here, 

as well. 

Dr. OPELKA. We actually had a meeting with them 2 days ago 

over at the Institute of Medicine, and it is the very first step in 

how do we get there. And again, any direction you can help give 

ONC to get us there would move us that much faster. 

Dr. STREAM. One of the issues is the intermediary that exchanges that information, the health information exchanges, and 

there are a number of successful and some not so successful ones 

around the country. And a lot of the issue is, what is the business 

model or payment model that supports them, and they often look 

to the physicians to subscribe to a service that then is going to exchange information. 

But it is the system, particularly the private health payers, that 

benefits from that exchange of information. I think we need to promote a payment model for those health information exchanges that 

is not asking small practices to contribute in order to get information exchanged. 

The CHAIRMAN. Go ahead. 

Dr. OPELKA. I was just going to comment very quickly on Senator 

Thune’s comments about the rural issue. And we do not have a solution in surgery, but we are very concerned. And there is decreasing access to surgical care, and, when that happens, you have problems with trauma, you have problems with acute surgical needs 

and transporting patients. 

I really want to support what Dr. Hoven had said about creating 

partnerships and new ways of delivering care into the rural environments. Partnerships from these delivery systems that are forming create some new connectivity, like telemedicine out to the specialty areas, so that there is early intervention and prevention of 

avoidable, preventable adverse patient events. 

It is deeply troubling in surgical care what we are seeing in the 

absence of surgeons in rural America, and it is something we are 

tracking, but I do not know that we have a solution for it. 

The CHAIRMAN. If we were to have a solution, what might it tend 

to be? 

Dr. OPELKA. Well, I think finding out what the barriers are to 

creating the kind of partnerships we need, getting the right surgeon to the right environment for the right time, matching the surVerDate Nov 24 2008 16:51 Aug 08, 2013 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 R:\DOCS\82118.000 TIMD
30 

gical needs. There could be a sense of, how do we actually create 

regionalization of key parts of surgery, and then, how do we get 

rural surgeons out into those rural environments? 

Some of that may be loan forgiveness. Some of that is going to 

be recruiting from the medical schools themselves. As a person in 

Louisiana, a rural State, with medical education, we find when we 

pull in students from the rural areas, there is a good chance that 

they will go back to the rural areas. 

So we are looking for best-in-breed opportunities to come in from 

the rural areas, and we are giving them incentives to come into 

medical school. So it begins very early in the career, but there are 

other steps, too, Mr. Chairman, that you have mentioned, and we 

endorse those. 

Senator THUNE. How much is occurring with patient or surgical 

consults via tele-technology, telemedicine-type approaches that 

might—I mean, that, to me, is one of the partnerships that we 

have seen be at least moderately successful in South Dakota, and 

I think other rural States are doing that too. But there are some, 

I think, limitations to that. 

And I guess to the chairman’s question, are there barriers that 

we could knock out of the way that would enable better use of the 

technology to deliver care to these—obviously, you have to have a 

surgeon there at some point if you have to have that kind of intervention, but it seems like there are a lot of things that could be 

done on the preventive side and in advance of that that could be 

accomplished through other means. 

Dr. OPELKA. Senator, in short, I would have to do more homework on that and get back to you. I do not have a sense of what 

kind of penetration there is. There is more than just a case report 

of this being out there. It is emerging. But I do not know that we 

have clear data to answer your question. 

Dr. HOVEN. I am not going to speak to the surgical issue, but I 

know in medicine, internal medicine, and in the specialties of medicine, particularly in neurology, critical care, pulmonary medicine, 

infectious disease, which I do, a great deal of outreach is now being 

done into rural parts of Kentucky via telemedicine programs and 

other communication tools. 

The technology needs to be improved. The standardization needs 

to be improved. But it does work. And recently, in one of our communities, actually, every day, a member of the critical care ICU 

team met video-wise with TeleMed, with a team in a little, small 

community hospital taking care of critical-type patients, and actually arranged transfer, determined what diagnostic studies would 

be helpful, and began to move that train before it became a catastrophe, before someone was seriously hurt because they were not 

able to get to care. 

So the movement is out there. I think we need the tools, the 

technology, and the standards to get this to a place that makes it 

what it should be. 

The CHAIRMAN. Senator Carper? 

Senator CARPER. Let me jump in here, if I can. I apologize for 

missing your comments. I have a simultaneous hearing in the Committee on Homeland Security and Governmental Affairs, and it is 

the 10th anniversary of the creation of the Department on the 

31 

heels of 9/11. And it was an opportunity for us to look back and 

look forward at the threats that we are facing around the country, 

around the world. So I apologize for missing much of what you 

said. 

My colleagues would probably tell you that my focus on health 

care reform has been not just, how do we extend coverage to people 

who do not have it, but how do we realize better health care outcomes for less money or for the same amount of money, because, 

if we do not do that, we are not going to be able to extend coverage 

long to people who do not otherwise have it. 

Among the focuses that I have had and, actually, a focus shared 

by Senator Baucus and Senator Enzi, as well as by others of our 

colleagues, is, is it possible to reduce the incidence of medical malpractice litigation? Is it possible to also reduce the incidence of defensive medicine? And is it possible, in doing both of those, to get 

better health care outcomes? 

And one of the things we put in the health care reform bill was a $50-million authorization to incentivize States to experiment 

boldly on different approaches. It could be health courts, it could 

be safe harbors, it could be panels of merits, or it could be the kind 

of thing we did up in Michigan; we saw that it works. And like 

what the University of Illinois has done, they have taken the 

Michigan idea, saw that it works, and they put it on steroids to see 

if it is possible to reduce the incidence of medical malpractice, reduce the incidence of defensive medicine, and get better results. 

And the answer, in about the last 2 years of good work that they 

have done, is yes, yes, and yes. I would just throw that at your feet 

and ask you to comment, please. 

Dr. OPELKA. Senator, if I could. And Senator Hatch raised this 

issue moments ago. We really did not dig into it at the time. But 

there is a disconnect from the conversation we are having about 

improving the value and how we purchase health care and this 

whole aspect of defensive medicine. 

And there is no way that we can actually fully achieve the value 

we wish unless we actually have evidence-based clinical care 

matched with evidence-based tort. If we do not have evidence-based 

tort reform, then physicians and hospitals are going to continue to 

have to defend their profession with defensive medicine. And that 

is the missed opportunity. 

If we are setting standards for better performance, if we are 

using them for public reporting and payment, then why are we not 

using those as the evidence basis for the decisions we make? 

I do not want to say that malpractice does not occur. I wish it 

never, ever occurred to anyone in any specialty anywhere. But it 

does. We are all human. And when it does occur, people deserve 

to be compensated. 

But if the best evidence was followed and everything was proper, 

then we just understand that is part of our own human frailties. 

We desperately need to look at everything you proposed, whether 

it is health courts, whether it is safe harbors, whether it is evidence-based tort reform, as a necessary adjunct to this value proposition. If we do not, we are going to be forever struggling with trying to contain that cost, and it is a significant cost. I do not know 

if it is $50 billion or more, but it is not chump change. 

32 

Senator CARPER. I spent quite a few years of my life as a naval 

flight officer back during the Vietnam War and then subsequent to 

that and during the Cold War. I am struck by how we have taken 

an idea that we used all the time in airplanes—checklists—and are 

actually applying it to the delivery of health care, and with regular 

good effect. 

And the other thing we did in naval aviation, and I am sure we 

do it in the other branches of the military as well, is, if we had a 

problem in a Navy P–3 airplane with one of the systems, crew, air, 

or whatever, we did not hide it. We just broadcast it throughout 

the Navy and said, this happened on this flight, on this mission, 

these are the conditions, the circumstances, this is what was done 

well, this is what was done badly, and, frankly, that is a smart 

thing to do with respect to these issues—defensive medicine and 

medical malpractice mistakes that are made. 

And one of the beauties about what they are doing in Illinois is 

putting a spotlight on it. They are not hiding this stuff—immediate 

disclosure, folks who are hurt, harmed in some way, financially or 

their health, apologies, and it is really a smart approach, I think. 

I am very encouraged with the work that is going on. 

Do you have any comments on this? 

Dr. STREAM. Well, you bring up a good point, Senator. It really 

is about a system of care and not necessarily just individual performance. And the checklist comment that you made is exactly on 

point. 

But we need to look at those incidents, near misses, as the FAA 

looks at accidents for aircraft. How can we learn from mistakes 

rather than try to hide them because of concern about litigation, 

and how can we use them as learning opportunities to continuously 

improve the quality of care that we give? 

And we need to nurture that environment, and, unfortunately, 

we, for the most part, do not do that. 

The CHAIRMAN. This has been a good hearing. I would like, 

though, for each of you, the best you can, to submit to us your written suggestions on what we do about SGR; that is, short-term, midterm, long-term, knowing that we have to act one way or another. 

And there are many ways to skin a cat, there are gray areas here 

and there are bridges and there are all kinds of solutions that you 

can come up with, but we do need some help. 

I just tend to think, the more you give us some suggestions and 

solutions, the more likely it is that you will like them. So, please, 

let us know what you think. And we deeply—I mean that, we really need your help. 

Thanks very much. The hearing is adjourned. A very good hearing. Thank you. 

[Whereupon, at 11:51 a.m., the hearing was concluded.] 

(33) 

A P P E N D I X 

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