Waltham, MA, USA: Brandeis University.
Brandeis University, Waltham, MA, USA
This report discusses potential policy options for Medicare based on Group-Specific Volume Performance Standards (GVPS). We developed a basic model and analyzed several variations with the following fundamental objectives:
The proposed models could give providers financial incentives to manage the services delivered to their Medicare patients, and reduce Medicare spending for all covered services, not just physician and supplier services.
Under MVPS, fee updates for all physicians can be reduced if annual volume performance standards (national expenditure targets for physician and supplier services) are not met. There are at least three problems with the mandatory national groupings:
When MVPS was enacted, Congress acknowledged that refinements to the basic approach could be warranted, and specifically called for development of group-specific performance standards. This report discusses models that would allow HCFA to monitor and reward physician organizations separately from the national experience. Furthermore, incentives can be expanded to include efficient management of all Medicare-covered services. Given its general applicability, this approach may have advantages over other policies such as capitation. Whereas Medicare has not achieved savings from HMO enrollment because of favorable selection, Medicare cannot lose money on GVPS but would share savings generated by efficient providers. In addition, GVPS would encourage the most efficient physician groups to serve the most expensive Medicare beneficiaries.