How physicians are paid and what services they choose to recommend are key drivers of today’s escalating health care costs. The Society for General Internal Medicine (SGIM) has convened an independent commission to assess physician payment and physician-influenced expenses as well as issue recommendations on how to reform physician payment to restrain health care costs while at the same time optimizing patient outcomes. The 13-member National Commission on Physician Payment Reform will work together over the upcoming year, with a final report expected in early 2013.

Payment incentives and systems directly impact medical services that physicians provide as well as the overall approach to their patients. For example, the current fee-for-service system aligns payment with services provided rather than overall care outcomes. While the Commission will examine existing formulas that determine physician payment, such as the Resource-Based Relative Value Scale (RBRVS), we will also investigate promising payment methods that could lead to higher quality of care and better patient outcomes. More specifically, the Commission will evaluate optimal incentives and safeguards surrounding the three principal forms of physician payment: fee-for-service, capitation, and salary, as well as variations of these forms such as episode-based payments, global payments, pay-for-performance and partial capitation that attempt to incorporate quality into the equation.

The Commission appreciates that many have already put considerable effort into payment reform.  We would like to complement, not duplicate, these efforts.  We will review new approaches in the Affordable Care Act designed to constrain costs, including bundled payments and Accountable Care Organizations, as well as disincentive payment strategies that penalize providers for avoidable costs. We will also draw on the factual findings of The Medicare Payment Advisory Commission.  A key difference is that the National Commission on Physician Payment Reform will look at the entire physician payment system, including both public and private payers.

Although sponsored by SGIM, the Commission is funded by large health care philanthropies interested in improving health care in America. The Commissioners represent a diverse group of payers, physician specialists, patient advocates, and others, in addition to primary care providers. By drawing on these diverse perspectives we hope to identify viable solutions that help put our health system on a track to providing Americans with the care they need at a price they can afford.

We recognize that each payment model contains its own challenges, but we are undertaking this review to identify the best elements of each approach and potential combinations that can help us rein in costs while maximizing quality and value. We are hopeful that our report will garner significant interest and attention among those responsible for making decisions about how care is paid for and organized.

Please visit for more details on the Commission’s mission and composition, and stay tuned for our recommendations in early 2013.

Steven A. Schroeder, MD, Chair of The National Commission on Physician Payment Reform and Eric R. Kessell, PhD, Project Manager for the Commission.

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