The current health care payment model in the United States is based on the quantity of care a physician provides as opposed to quality of care a patient receives. A more effective, predictable payment method should encourage doctors to provide evidence-based care that is effective. It should be based on a patient-centered medical home where patients and physicians work together to coordinate the patients' care in the context of their overall physical, mental and emotional health. A more effective payment model should include incentives for physicians to coordinate the tests, procedures and patient health care in general, including preventive and health-maintenance services.

The results of such a payment system would ensure that the physician-patient relationship is preserved, resulting in better patient care and lower health care costs.


Medicare has a history of making disproportionately low payments to primary care physicians, largely because its payment formula is based on a reimbursement scheme that rewards procedural volume and fails to foster the comprehensive, coordinated management of patients that is the hallmark of primary care and effective health systems throughout the industrialized world. More broadly, the prospect of steep annual cuts in payment resulting from the flawed sustainable growth rate (SGR) formula is discouraging for all physicians and health care providers. Under the SGR, physicians face steadily declining payments into the foreseeable future - 21 percent next year and about 5 percent a year for several years thereafter - even while their practice costs continue to increase.

The organizations called on Congress to enact a five-part plan to reform physician payments:

1. Provide a substantial increase in Medicare payments to primary care physicians, beginning in 2010. Such an increase should be large enough to send a powerful signal to medical students and established physicians that Congress is serious about making primary care a more attractive career option, and to recognize the demonstrated value of primary care in improving outcomes and lowering costs. This initial increase should become a permanent part of the Medicare payment structure, they said.
2. Eliminate the Medicare SGR and replace it with a system that provides predictable and stable updates to all physicians with positive and higher updates for services provided by primary care physicians. The accumulated SGR deficit should be eliminated and reflected in the Medicare baseline.

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