Senators hope healthcare proposal will be a sign of reform to come

Pushing to change how medicine is paid for as part of a sweeping overhaul of the nation’s healthcare system, two leading senators offered a plan Tuesday to pay more to hospitals and doctors who meet federal quality standards and penalize those who do not.

Healthcare legislation is probably months away from being introduced. But the proposal by Sens. Max Baucus (D-Mont.) and Charles E. Grassley (R-Iowa) suggests the senior members of the Senate Finance Committee have reached some bipartisan agreement about how the federal government should pay providers through its Medicare program.

That then could be the model for revamping the private healthcare system.

“We need to make significant improvements to our healthcare delivery system. And we need to do it in a fiscally responsible way,” Grassley said.


The senators’ 48-page memo is to be discussed today at a closed-door meeting of the finance panel. Although it does not lay out specific quality standards, the proposal reflects a consensus among policymakers and experts that the current system -- in which doctors largely are paid based on the number of services they offer -- has led to enormous waste and left Americans with poorer healthcare.

In addition to promoting quality standards, Baucus and Grassley have proposed pay incentives to encourage primary-care physicians to manage a Medicare patient’s dealings with multiple providers.

And their memo suggests that the amount private insurers receive from the federal government for offering Medicare coverage to seniors could be linked to some quality measure.

Leading industry groups that reviewed the proposal Tuesday evening offered mostly cautious reactions.


“They are keeping the ball rolling here on health reform, which is very, very important,” said Charles N. Kahn III, who heads the Federation of American Hospitals. “There are some very good suggestions. . . . There are other things that will be challenging.”