Physician payment reform in the United States

Abstract

With the recent strengthening of the physician expenditure cost control mechanisms of the “Gesundheitsstrukturgesetz” of 1993, Germany has again affirmed its belief in the need for and success of global budgeting for physician payments. In 1992 Medicare, the U. S. government-run health insurance program for the elderly, first implemented the new Medicare Fee Schedule based on a point value system, known as the Resource-Based Relative Value Scale (RBRVS), which is very similar to the German “Einheitlichen Bewertungsmasstab” (EBM) and uses a similar system for budgeting physician payments. Although this policy has only been in place in the United States for two years, many policy makers are considering expanding the payment mechanism to all payers, private and public, in an effort to control costs. In order to inform German health policy makers of this trend in the United States, both the historical and analytical framework of physician payment reform in the United States are described, as well as some insight into its future direction is provided. The first section is on the pressures during thel980’s that led to the new Medicare Fee Schedule and the implementation of the Resource-Based Relative Value Scale on which it is based. Second the analytical methodology and budget considerations are dealt with that were used to implement the Medicare Fee Schedule. Third, the potential affects of the resulting reform on costs, quality, access and individual physician payment are analyzed. Lastly, the role of physician payment in the debate on U. S. health care reform is examined, as well as, the Medicare Fee Schedule’s applicability to other payers