Replace 'Fee-For-Service'

David Ignatius argues that Obama needs a medical 'General Petraus' to explain to the American people what needs to be done to our medical system, and he proposes Dr. Cortese, chief executive of the Mayo Clinic. He adds that there needs to be a willingness to try some cost cutting measures with Medicare and the other 'public' health care options.

If liberals really want to show they are serious, they should begin with
our existing single-payer behemoths, Medicare and Medicaid. Cortese argues that
the White House should mandate that, within three years, these programs will
shift from the current fee-for-service approach to a system that pays for value
-- that is, for delivering low-cost, high-quality care. If doctors performed
unnecessary tests that ballooned costs, their compensation would be reduced. And
doctors would be compensated by regional formulas, to encourage them to work
cooperatively in local networks where they could all make more money by
practicing better medicine.

What difference would such Medicare reform make? Take a look at estimates prepared by the Dartmouth Institute for Health Policy
and Clinical Practice (which developed the national "health atlas" that was the
basis for the widely read New Yorker article by Dr. Atul Gawande). At current spending rates, Medicare
will run a $660 billion deficit by 2023. But by cutting the annual growth in
per-capita spending from the current national average of 3.5 percent to 2.4
percent (the rate in San Francisco, for example), Medicare could save $1.42
trillion and post a big surplus.

This "pay for value" approach would amount to a cultural revolution in
American health care. It would take our bloated system and make it cheaper and
better. The adjustments wouldn't be easy, and the medical profession would balk
unless respected doctors such as Cortese led the way.