Congress has long pushed Medicare to pay doctors less for what tests they run and more for the quality of care that is provided. Medicare plans to do so, but is it even possible?
There is no doubt that the sheer number of tests done by doctors and hospitals is a major source of health care expenses. Someone must pay for every single test. If the patient has Medicare, then the taxpayers are the ones paying for the tests.
One solution for this is to tie Medicare payments to the overall quality of care provided instead of to which tests are run. That is what Congress has sought and what Medicare plans to do.
Nevertheless, as Forbes points out in "Medicare Wants to Pay Doctors and Hospitals for Performance, But Can It Really Be Measured?," that might actually be counterproductive.
The biggest problem is the difficulty coming up with a system to accurately measure quality of care.
Some people think that it might be impossible. For example, everyone can agree that an accurate diagnosis is a higher quality service than an inaccurate diagnosis, but there is no reliable way to measure whether a diagnosis is possible.
You could measure how many patients are cured of disease, but that does not account for patients with chronic conditions as many Medicare patients have. Medicare's solution is to rate by a series of performance benchmarks. The potential problem is that doctors and hospitals might attempt to meet those particular benchmarks instead of merely attempting to provide the best patient care that they can.
Medicare costs will continue to be an issue for the near future.
Reference: Forbes (Jan. 29, 2016) "Medicare Wants to Pay Doctors and Hospitals for Performance, But Can It Really Be Measured?"