January 23, 2011
Area(s) of Interest: Health Care Reform 


To ensure senior citizens get the health care they need, no matter what their background or where they live, policymakers must balance concerns about Medicare spending with other factors to accurately ensure access to care, the California Medical Association (CMA) said at a Jan. 17 hearing before the Institute of Medicine (IOM).

An independent, nonprofit organization tasked with studying geographic differences in Medicare spending and value of care, IOM took comments on the issue in Washington, D.C. CMA joined the American College of Physicians as the only two major physician organizations asked to testify.

After studying the issue, IOM will present Congress with a recommendation on how to change the Medicare payment system. Congress commissioned the study as part of health care reform, and as a compromise offered by California congressional leaders, after legislators from rural Midwestern states pushed for changes in Medicare funding that could have cut payments to California by 22 percent.

"While Dartmouth Atlas studies show big variations in Medicare spending region to region, they do not adequately weight for other crucial factors that account for these differences, such as costs to practice medicine in different regions and differences in patients' income levels, ethnicities and health histories," said Larry deGhetaldi, M.D., who testified on behalf of CMA. "Once you accurately assess risk and cost factors unique to each region, Medicare spending does not differ as much region to region. a failure to do so would compromise access to care for the most vulnerable Medicare patients, low-income beneficiaries."

For example, deGhetaldi said, Los Angeles County has a high poverty rate and high rents and wages, which all push up the cost of providing health care there.

The IOM is also charged with developing payment methods and delivery models that provide more "value." On that topic, deGhetaldi gave examples from his medical group, the Palo Alto Medical Foundation, in which it reduced unnecessary clinical variation and improved care by offering physicians incentives.

in addition, deGhetaldi called upon IOM to fix the outdated Medicare physician payment regions that undercut physician payments in several California counties. Seniors struggle to find doctors to treat them in counties such as Santa Cruz, San Diego and Sacramento, which are classified as rural under Medicare and therefore offer physicians low reimbursement rates.

CMA advocates for realigning those counties with hospital payment localities, which more accurately reflect urban and suburban costs.