01/15/2010 11:04 am ET Updated May 25, 2011

In The Public Interest : The Biggest Health Reform You've Never Heard About

For decades now, America has needed health reform to bring relief from the constant, unchecked growth in our country's health care bill.

Premiums are doubling every eight or nine years, federal and state budget deficits are exploding, and new jobs are more and more expensive for businesses to create.

Until now, reform has been very hard to come by.

The problem isn't that America lacks solutions. Health care innovators like the Mayo Clinic, Intermountain Health, Geisinger Health and Kaiser Permanente have proven that improving the care Americans get can also reduce the bills we pay. Their experience has shown that there is a path to lower premiums - if Congress musters the necessary political will.

That path is not a difficult one. All Congressneeds to do is get behind one of President Obama's signature cost-cutting priorities. It's called the Independent Payment Advisory Board and it could revolutionize how doctors, hospitals and other providers are paid for the care they deliver.

To understand why this obscure provision matters so much to health reform's ultimate success, consider the fee-for-service payment system that is responsible for much of our rising costs. Under the current system, most doctors and hospitals are rewarded for the number and complexity of procedures and surgeries they perform, regardless of whether the care actually makes patients well.

It gets worse. Because fee-for-service often underpays the services that deliver the best results - basic prevention and primary care - this payment system actually ends up financially punishing those providers who do what it takes to keep their patients healthy.

By contrast, at health care innovators like Mayo, providers are paid based on delivering good, well-integrated care, not the most care. By getting the right care to patients at the right time, these innovators get people well more effectively - and spend a lot less doing it.

If similar approaches were adopted across the country, the potential for quality improvements and lower costs are vast. If the entire U.S. health care system matched the efficiency of Intermountain Health in Utah, for example, the nation's health care costs would drop by a 40 percent, saving us almost $1 trillion every single year, while delivering better care.

For years, experts have acknowledged that the best way to move towards these more efficient models of care is to change provider payment policies within Medicare. Responsible for nineteen percent of the health care market, Medicare is the only health care player with the market clout to drive the entire health care system towards the new models. But currently, the minutiae of Medicare provider payment rates are set by Congress, who are practically held hostage by massive lobbying and campaign contributions from the health care industry.

Making Medicare payment more efficient inevitably means goring the ox of those same special interests that have grown fat from the waste and abuse in today's system: the medical device industry, medical specialty societies, and certain increasingly profit-driven hospitals.

This is precisely where the Independent Payment Advisory Board, as supported by the Senate and the Obama administration, comes in. Made up of doctors and health policy experts appointed by the President and confirmed by the Senate, this new board would recommend changes to Medicare's payment policies.

And the IPAB's recommendations would have real teeth. Congress would have to consider them under a fast-track procedure that would leave little opportunity for special interest maneuvering. Congress could consider an alternative to the Board's proposals, but only if it achieved the same level of savings.

In the event that Congress still persisted in doing what it has done in the past - ignoring the problem and doing nothing - this Board's proposals would be implemented automatically, achieving an end-run around the special interest lobbies.

To drive down costs in the private insurance market, the board would also regularly submit a separate set of legislative and regulatory recommendations to Congress and the President on how to lower costs across the health care industry.

That is how health care reform can truly deliver the better care and lower costs that the American people want; a reform crafted with the public interest, not special interests, in mind.

To get there, as the House and Senate reconcile their competing versions of health reform, House leadership must follow the Senate's lead and support inclusion of a strong Independent Payment Advisory Board in the final bill.