MedPAC, the independent commission that advises Congress on Medicare payments, said in a report Monday that the federal government must give doctors and health-care facilities incentives to rein in costs in providing care for the elderly and disabled. Further, their report goes on to say, “Costs are high and increasing at an unsustainable rate in part because the healthcare delivery system we see today is not a true system: care coordination is rare, specialist care is favored over primary care, and quality of care is often poor.”

Among the commission’s proposals: (1) look at ways Medicare can lower its annual payments to the private plans under Medicare Advantage, better coordinate care for the chronically sick and amend the way it pays for supplemental insurance; (2) monitor payments to groups of primary-care physicians, specialists and hospitals. Those providing poor care at high costs would be penalized and those that do well would be rewarded; and (3) monitor residency training programs to ensure doctors-in-training receive education geared more toward chronic disease management, as opposed to acute illness (CMS spent more than $9 billion in 2008 on graduate medical education.)

Some lawmakers want to give the commission broader powers to move beyond simply advising Congress on how to set payments to physicians and hospitals. Others (mostly Democrats) don’t appreciate Barack Obama’s consideration of such an expansion of MedPAC’s reach. | LINK [PDF]

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