The Problem With Obama’s Plan to Pay Doctors Based on Performance

As Medicare prepares to begin rating doctors on a scale from 0 to 100, there’s confusion about how to define success.

In this April 16, 2015, photo, President Barack signs the bill H.R. 2 Medicare Access and CHIP Reauthorization Act of 2015 in the Rose Garden of the White House in Washington D.C.

Photographer: Carolyn Kaster/AP Photo

Until recently, the U.S. government and insurance companies paid doctors for volume of services provided, rewarding them for needless treatments. Economists and policymakers have long called for flipping those incentives so physicians are paid for the quality, not quantity, of care they deliver. That goal is embedded in the Affordable Care Act, which penalizes hospitals when patients get readmitted. Paying for quality is an approach that private insurers, employers, and state Medicaid plans have adopted.

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