18abe704c09b681ec036bbbe00132a37d618c886_fotolia_60146441_subscription_monthly_mIn January, the Obama administration announced a goal to accelerate changes to medicare that would reallocate half the program’s spending to doctors, hospitals and other patient care providers. They stressed both quality and frugality in the proposed plan.

The announcement given by Health and Human Services Secretary Sylvia Burwell was intended to spur efforts to replace Medicare’s traditional fee-for service medicine. The current structure pays doctors, hospitals, and other medical providers for each case or service without regard to how the patient does. Medicare is a federal insurance program that provides health care to the elderly.

In 2014, 20 percent of Medicare spending went to accountable care organizations, or ACOs, where doctors and others band together to care for patients with the promise of getting a piece of any savings they bring to Medicare, administration officials said. That amount equaled about $72 billion in spending.

There are 424 ACOs currently, and 105 hospitals and other health care groups that accept bundled payments, where Medicare provides a fixed sum for each patient, which is supposed to cover not only the initial treatment for an ailment, but follow-up care as well.

The administration wants Medicare spending to be linked to quality of care, with bonuses and penalties given to providers in addition to an increase of traditional fee-for-service payments. The goal is that by the end of 2018 90% of Medicare spending is linked to quality of care.

Keep in mind these numbers do not include money that now goes to private insurers in the Medicare Advantage program, which constitutes a third of all Medicare beneficiaries.

“For the first time we’re actually going to set clear goals and establish a clear timeline for moving from volume to value in the Medicare system” Burwell said at an announcement at the department’s headquarters. “So today what we want to do is measure our progress and we want to hold ourselves in the federal government accountable.” She was joined by physicians and leaders from the insurance and hospital industries.

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Rau, Jordan. Jan 27, 2015. Kaiser Health News. “Medicare patients could see better care.” CNN.com.

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