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Wright and Blackwell said Texas should encourage more physicians to go into primary care in rural areas by expanding the loan repayment program, which offers some debt relief to doctors who do so.

Unless trends change significantly in 2013, the key determinants of whether a particular physician will be able to avoid a Medicare pay-for-reporting penalty are his or her specialty and the state in which the doctor practices

Once we understand the rules, we are pretty good at playing by them,” said Lee Hilborne, MD, a professor of pathology and laboratory medicine at the David Geffen School of Medicine at the University of California, Los Angeles.

The current system, researchers say, financially encourages doctors to do more procedures and is one of the reasons health costs have escalated. The health law required Medicare to gradually factor in quality into payments for hospitals, nursing homes, physicians and most medical providers.

Medicare had already decided that large physician groups -- those with 100 or more doctors, nurses, social workers or other health professionals -- will gain or lose as much as 1 percent of their pay starting in 2015. Those incentives would double to 2 percent the following year under draft regulations Medicare released this month. The proposal also would phase mid-sized physicians groups—those with between 10 and 99 health professionals—into the program in 2016 instead of in 2017. While they would be eligible for bonuses up to 2 percent, they would be shielded from any penalties for that first year.

As Dr. Rushika Fernandopulle states, “they are putting wings on cars and calling them airplanes.” Instead, creative physicians such as Dr. Fernandopulle have developed models such as Iora Health that are built from the ground up NOT to optimize around billings, but to optimize around health. Iora Health has proven that they can deal with the toughest patient populations and reduce costs while greatly improving outcomes

The number of people enrolled in health savings accounts (HSA) has more than tripled in the last six years from 4.5 million people in January 2007 to 15.5 million in January 2013, according to America's Health Insurance Plans, a trade association that represents health insurers.

In the future, Cohen said he expects to see several options used more widely to lower costs, such as rewards for low cholesterol or keeping diabetes under control, incentives to join gyms and benefits for participating in healthy lifestyle programs.

The data also shows that businesses could save money while providing their employees with more choices, he said. Some of those choices, such as closed-network programs or single primary-care physician-based programs, have been avoided in the past because the common wisdom is that people don't like being limited by what doctors they may see.

Medicare covers all those treatment options. By law, it can't consider price when making coverage decisions. Nor can it insist that a new technology be significantly better than existing ones or encourage doctors or patients to seek less-costly alternatives. And once Medicare starts writing checks, private health plans generally follow, distorting the usual market mechanisms, says Arthur Kellermann, a physician and senior policy analyst at Rand Corp.

Another big driver of health-care costs is technology. In almost every other industry, innovation generally makes things more efficient and less costly. But in health care, it often brings higher costs with little added value.

The Minuteman plan would streamline billing processes to save on administrative costs and allow providers to work more closely with employers, organizers said. Information about smoking cessation or workers’ weight collected through employer wellness programs is not typically shared with doctors. “Imagine working closely with an employer who can help us gather data and, with employees’ permission, to be able to share that data with their primary care providers,” said Dr. Jeff Lasker, chief executive of the Tufts physician group, New England Quality Care Alliance.

Partners HealthCare last year announced plans to acquire Neighborhood Health Plan, which mostly serves low-income people. Steward Health Care has worked with Fallon Community Health Plan to develop plans offered at reduced prices through a small business cooperative created by the Retailers Association of Massachusetts.

s the movement towards health reform is putting pressure on hospitals, physicians and insurers to keep a lid on rising costs.

Under the Affordable Care Act, health care providers may be rewarded if they demonstrate better health outcomes at lower costs.

“In the old world, doctors and hospitals were paid more if they did more,” Kannaday said. In the new model, doctors and hospitals that demonstrate they are providing quality care at a lower cost are rewarded financially, she said.

decline in charity care and bad debt with more patients