Earlier today, I recommended Michael Chernew’s testimony (pdf) on reforming the way Medicare pays doctors. But on the off chance that you didn’t take time out of your workday to study a proposal on quality-based payments in Medicare, here’s what caught my eye:

- “It is important to distinguish between the form of payment (fee-for-service vs. bundled payment) and the level of payment. The form of payment creates incentives .... But even if we adopt the best form of payment, it will be a challenge to set the right level of payment. Provider costs vary across and within markets, in some cases due to factors beyond the providers control and in other cases due to factors providers can control .... In my opinion a discussion of post-SGR payment should primarily focus on the form of payment, not the level of payment.”

- “A colonoscopy preformed in a physician’s office costs Medicare on average about half of the cost if it is performed in a hospital outpatient setting.”

- “A more bundled system, that pays for an episode of care or provides a global budget can allow more flexibility for providers and obviate the need for purchasers (such as Medicare or private insurers) to micromanage payment systems .... In a bundled payment model the relevant question is not: how do we pay physicians, but is instead: how do we pay for care.”

- “The Alternative Quality Contract differs from capitation plans of the 1990s because the contract extends for 5 years and incorporates significant performance incentives for quality and health outcomes.”

- “Global payment systems in the past have raised several concerns. For example, many have worried that they would lead to reductions and delivery of effective and needed care ... the most important protection is the quality bonus system. Early evidence suggests that these features have led to an increase, not decrease, in the quality of care delivered.”

Here’s more from Austin Frakt.