The quest to create a more rational health-care system took adispiriting turn this month, when the federal government abandonedan effort to motivate doctors to use the best available drugs,rather than the costliest ones. What’s worrisome is that this couldbe the start of a more general retreat from payment reform inhealth care as the White House changes hands.

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Related: Medicare releases new paymentmodel

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The effort in question was to change the fee that Medicare nowpays doctors for administering drugs in their offices, a fee thatamounts to 6 percent of the drug’s cost. Under this system, thepricier the medicine, the greater a doctor’s financial incentive touse it.

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Given that drug spending by Medicare has been rising by 10percent annually, and now tops $100 billion a year, thisreimbursement policy is indefensible. Indeed, it illustrates whythe U.S. spends 18 percent of its economic output on health care --more than any other country.

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Yet in March, when the Centers for Medicare and MedicaidServices (CMS) proposed shrinking the fee, doctors andpharmaceutical companies pushed back. Last week CMScapitulated.

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The broader cause of payment reform is in jeopardy, too, partlybecause the present administration has moved slowly on it. WhenBarack Obama exits the White House, dozens of pilot projects fornew payment systems will be left unfinished, and only a handful ofthose reforms have become mandatory. A bigger concern: CongressmanTom Price, Donald Trump’s pick to be health secretary, has alreadydemanded that CMS scale back the initiatives.

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Related: 5 surprising things Medicare won't payfor

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The reforms CMS has pursued include such promising strategies aspaying hospitals a single fee for a hip replacement and otherprocedures, paying doctors a fixed fee per patient, along with abonus for improving care, and asking doctors and hospitals tocoordinate the care they give in order to avoid providingunnecessary services. If Medicare could save money through suchreforms, private insurers could follow suit.

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Republicans, meanwhile, want to replace Medicare altogether witha voucher system that would help older people buy insurance on theindividual market. Presumably, competing insurers could then figureout for themselves how to cut costs. But the companies could savemoney as easily by simply covering fewer services and shunningsicker patients as by giving doctors incentives to work moreefficiently.

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The Obama administration’s unfinished payment-reform efforts area far better way to lower costs -- for Medicare and for health caregenerally. They’re yet another important aspect of Obamacare thatPresident-elect Trump should preserve.

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Related: Medicare launches major value-based paymentmodel

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Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.

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