Missing productivity gains in the Medicare physician Fee Schedule: where are they?

Area of Science:

• Health Economics
• Medical Policy
• Physician Workforce Studies

Background:

• The Medicare Fee Schedule (MFS) is periodically updated to reflect changes in physician work.
• Past MFS reviews have shown bias against recognizing physician productivity improvements.
• Current payment structures may not accurately reflect contemporary physician work patterns.

Purpose of the Study:

• To analyze the accuracy of physician work relative values in the Medicare Fee Schedule.
• To identify potential cost savings within the MFS by incorporating productivity gains.
• To evaluate the impact of technological advancements and delegation on physician work.

Main Methods:

• Analysis of four studies examining physician time in office and operating room settings.
• Review of surgeon self-reported work and handoff patterns.
• Assessment of payment structures for postoperative care.
• Evaluation of potential savings from increased delegation and service reengineering.

Main Results:

• Physician time with patients has decreased in offices and operating rooms.
• Surgeons report increased total work despite reduced operating room times.
• Costly handoffs to non-surgeons are increasing, with surgeons retaining full payment.
• Significant savings are possible through MFS adjustments reflecting productivity.

Conclusions:

• The current Medicare Fee Schedule does not adequately account for physician productivity gains.
• Integrating factors like delegation, technological learning, and service reengineering could unlock substantial savings.
• Periodic reviews of the MFS require updating to accurately reflect current physician work and efficiency.