Here’s a crazy idea: doctors and hospitals should be paid on the based value they provide, rather than on the number of tests and procedures they perform. This value-based payment model rewards those who have better outcomes with less risk and fewer costs, rather than doctors being paid a fee for every procedure they do.

A terrific example of this type of system is our own Mayo Clinic. What should really blow your mind is that because Mayo aims to offer such great care, it loses huge amounts of money due to the current Medicare payment system. This is because it financially punishes those who offer high-quality care at a lower cost. Denis Cortese, President and CEO of Mayo Clinic, explained in a Chicago Tribune article:

Last year alone, Mayo Clinic lost hundreds of millions of dollars caring for Medicare beneficiaries — the very patients with complex, complicated illnesses that we want to see and can serve well. Because of this shortfall, our other patients pay more to make up the difference. Someday soon, neither Mayo Clinic nor those other payers will be able to afford this situation.

By changing the way doctors get paid, places such as the Mayo Clinic would no longer be financially pummeled for offering better care at lower costs. When asked during a conference on Tuesday whether the fee-for-service system was archaic and fundamentally at odds with good practices, most doctors and hospital execs raised their hands, according to the New York Times.

One proposed way to go about this would be through the Independent Medicare Advisory Council (IMAC), an independent, non-partisan body composed of doctors and health experts. The IMAC would be responsible for issuing recommendations about Medicare payment rates and other reforms in order to improve quality of care or Medicare’s efficiency. The Mayo Clinic has already applauded the direction of this proposal, which could be the first step to moving Medicare to a value-based payment model. A council focused on determining value and how to pay for it would have long term impacts on health care. Call your members of Congress and tell them how important it is that health care reform contains the creation of the IMAC.

Photo Credit: Minnesota Public Radio