(Host) The Vermont Medical Society says it's intrigued by a new payment plan being considered in Congress as part of the debate over health care reform.

Under the proposal, health care providers would no longer be reimbursed for every procedure they perform. Instead, they'd be paid based on the health outcomes of their patients.

VPR's Bob Kinzel reports.

(Kinzel) Some health care officials think the implementation of a payment reform system is one of the most important elements of the current debate in Congress.

Congressman Peter Welch is co-sponsoring a plan, which has been incorporated into a draft health care reform bill, that would dramatically change the way that health care providers are reimbursed for their services.

Welch says his plan is based on research done at Dartmouth that analyzes the cost and the outcome of health care services:

(Welch) "The work that's been done by the Dartmouth folks shows that more spending frequently results in less optimal outcomes. You get worse care the more you spend and the reason is because we're rewarding fee-for-service, volume-driven medicine."

(Kinzel) The key to the plan is the creation of accountable care organizations. These are small regional groups consisting of local hospitals, primary care physicians and specialists.  It's envisioned that Vermont might have a dozen of these groups if the bill becomes law. 

Welch says providers in each group would be reimbursed based on the health outcome of their patients instead of the traditional fee for service model.

(Welch) "These accountable care organizations basically are patient focused. What does the patient need? How do you organize delivery of care so that the patient gets the best outcome with the least medical intervention? And in places where it's been more or less implemented you have lower spending and better health care outcomes."

(Kinzel) Paul Harrington is the director of the Vermont Medical Society. He says many doctors don't like the current system and are intrigued by Welch's plan.

(Harrington) "So a reimbursement system that is more holistic understands that there's a lot of health care that takes place outside of that 15 minute office visit and, more importantly, pays for results as opposed to just those limited interactions, is something we're very interested in."

(Kinzel) Governor Jim Douglas says it's an issue that many governors also support because they feel the current system encourages wasteful spending:

(Douglas) "You get paid for doing more things as opposed to ensuring a good outcome. I've talked to physicians in Vermont who say, ‘I'm willing to be held accountable. I'm willing to have a portion of my compensation at risk based on the quality of my care and the outcome of my patients.' So I think we have got to really shift the payment structure to encourage cost containmen.t "

(Kinzel) Congressman Welch says he's optimistic that his plan will be included in the final health care reform bill that's considered by Congress.

For VPR News I'm Bob Kinzel in Montpelier