There's a better way to fix doctor pay. Photographer: Joe Raedle/Getty Images
There's a better way to fix doctor pay. Photographer: Joe Raedle/Getty Images

Congress is on the cusp of changing Medicare in a way that could meaningfully improve the way doctors practice medicine in the U.S. All that remains is to decide how to pay for it.

Republicans in the House have a suggestion: Delay for five years enforcement of the Affordable Care Act's tax penalty for people who fail to obtain health insurance. Yes, they mean the individual mandate, the most unpopular aspect of the health-care law and a target of their attacks from day one.

But delaying the mandate for five years would keep 13 million people from getting publicly funded insurance. The number of Americans without health insurance would increase by a third. This is not a solution; it's closer to sabotage.

A much more sensible way to finance the Medicare change is to draw the money away from other kinds of Medicare spending.

First, a little background on why the change is needed: Medicare's payments to doctors are now tied to a 1997 formula that was supposed to slow their growth. Doctors have naturally balked at the cuts that resulted, and since 2003, Congress has overridden them by passing a series of temporary measures known affectionately as the "doc fix."

Lawmakers want to end the 1997 formula altogether, erasing the ever-present threat of cuts -- and, at the same time, end fee-for-service payments and give doctors the financial incentive to provide more effective care. Private insurers are already moving to new payment systems that reward the quality of care rather than quantity, and it's past time for Medicare to follow their lead.

The estimated cost to make this change is $138 billion over 10 years. That's a lot of money, but it could be drawn from other Medicare spending on health-care providers, doctors among them. This is not a radical idea; various bipartisan deficit-reduction proposals put forward since 2010 have recommended such measures.

Among their good suggestions are using Medicare's buying power to get better rebates from drug makers, ending overpayments to hospitals for training doctors, making it harder for doctors to refer patients to their own businesses, and reducing Medicare's reimbursements to hospitals to cover unpaid deductibles and copayments. These aren't the only possibilities. The Senate Finance Committee has compiled a helpful list of a couple dozen other ways to save money on federal health-care spending.

Of course, cutting some types of Medicare payments to increase others won't win friends in the health-care industry. But Congress's more important and lasting priority must be to curb the long-term growth of health-care spending. Getting started now will easily make it possible to manage a permanent doc fix.

To contact the senior editor responsible for Bloomberg View's editorials: David Shipley at davidshipley@bloomberg.net.