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Report urges overhaul of healthcare fees

WASHINGTON -- Quality, not quantity, should be the federal government's guide in setting payments to doctors, hospitals and other healthcare providers, a report requested by Congress said yesterday.

Medicare, the nation's healthcare program for the elderly and disabled, pays doctors and hospitals when they perform a particular service. But such a system `` high-cost complex procedures, and lower-quality care," the Institute of Medicine said.

The institute once again recommended ``pay-for-performance." But this time, it also spelled out how the government should pay for it.

The institute said Congress should cut base payments and use the savings to create pools that reward providers when they do work that improves a patient's health .

Many providers won't be happy with the recommendation.

``If hospitals are already losing money treating Medicare patients, there's no incentive if you're going to further cut payments," said Carmela Coyle of the American Hospital Association.

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