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QUALITY: Medicare DSM demos are awarded, but not to providers

So the Medicare CCIP (chronic care improvement program) demonstration projects have been awarded and announced. And the winners are health plans and DSM companies. The plans are Aetna, Cigna, Humana, & United. The DSM companies are the more or less usual suspects of American Healthways, Lifemasters, Mckesson Health Solutions, Health Dialog (supported by a cast of thousands including Health Hero) and the slightly less well-known (i.e. I’d never heard of them!) XLHealth–which I guess specializes in obesity management.

What’s actually going to happen will be pretty darned interesting:

Phase I CCIP programs will serve 150,000 to 300,000 Medicare beneficiaries who are enrolled in traditional fee-for-service Medicare and who have multiple chronic conditions…. Beneficiary participation is completely voluntary and at no charge to beneficiaries and will not affect their ability to choose their own doctors and other health care providers…… Using historical claims data, CMS will identify beneficiaries by geographic area and screen them for CCIP eligibility. Targeted beneficiaries will be assigned randomly to either an intervention group or a control group.

Enrollment is voluntary and the organizations running the project will have to do the marketing/enrollment. What will they do after that?

Each of the local CCIPs will offer self-care guidance and support to chronically ill Medicare beneficiaries to help them manage their health, adhere to their physicians’ plans of care, and ensure that they seek and obtain the medical care and Medicare-covered benefits that they need. The programs will include collaboration with participants’ health care providers to enhance communication of relevant clinical information. The programs are intended to help increase adherence to evidence-based care, reduce unnecessary hospital stays and emergency room visits, and help participants avoid costly and debilitating complications.

The economics is that the sponsoring CCIP organization has to show at least a 5% reduction in the cost of these chronically ill seniors compared to the control groups, and then they get to keep the difference if they make bigger savings. This should be doable in that apparently in their commercial populations the DSM companies have been saving close to 15% compared to comparable cohorts. The question of course is, can the models that have shown success with a commercial population be translated to an older and potentially sicker one? And can it be done in places where there’s limited experience in care management?

Apparently the CCIP contracts couldn’t go to states which had big demonstration projects already, which included California and Texas, which is one reason that they ended up in states which, to put it one way, are not particularly known for innovation in population care management. (I hope I didn’t offend too many of my fans in Mississippi or Tennessee with that statement).

However, it’s worth thinking for second about who isn’t on that winners list. Remember the comment over on the DM Forum a while back about the DM executive explaining it at a cocktail party and being asked "isn’t that what doctors do?" Well there ain’t no providers on the list, and apparently not too many tried to get on it. At least one commentator, Robert Berenson from the Urban Institute, has pointed out that the way the law was written made it close to impossible for providers to take part. He doesn’t exactly pussy-foot around:

Consistent with the overall philosophy of the MMA, the law’s approach to addressing the growing need for improved care for those with chronic health conditions is a corporate one, focused on providing contracts to third party vendors, rather than enabling professionals to better serve their patients. Medicare has an important opportunity to lead the restructuring of how physicians organize and deliver health services, as called for by the Institute of Medicine in their seminal Quality Chasm report Instead, the MME would have Medicare merely follow private sector approaches that may not be well suited to the Medicare population.

Now there are some other approaches that Medicare has taken in smaller demonstration projects that have been more physician and provider-friendly, but they haven’t always had success. In fact one demonstration project in Washington state failed over physician lack of involvement earlier this year. And realistically, the current market attitude of hospitals which are focused on–and make their money from–acute care interventions, and the disaggregated nature of the physician population, overall makes provider organizations poor candidates for developing these CCIPs. However, that’s not the case for all providers. There are plenty of medical groups and forward-thinking hospitals that could have put such a plan together–after all it was big medical groups like Kaiser Permanente and the old Friendly Hills and Mullikin groups in S. Cal which started effectively innovating in the care of seniors back in the 1990s.

While CMS hasn’t said which bids didn’t get selected, either they didn’t pick a provider group or the whole thing was framed in a way that no provider group applied. Given that the intention of this demonstration project is to help reform Medicare, you’d think that one or two of the contracts could have been given to provider organizations to see if there’s any hope of innovation there. After all they’re the organizations that are going to have to change if we’re going to rescue Medicare in the long run. And one provider group, run by government bureaucrats no less, has quite an impressive record in DSM–so it’s a bit early to not even allow another one to give it a go.

Of course there is a somewhat more cynical view to take of this announcement. This Administration has shown complete faith in the market, even to the extent of subsidizing private plans to take over market share from the more efficient government Medicare plan–at an incremental cost to the tax payer. If you extrapolate out from current trends, Medicare will be costing in the order of 157% of GDP by 2020 (OK, not quite that much, but a very big number). To get Medicare costs under control, the only real long-term option is to pay the providers less. Meanwhile the consumers will want the same amount of services (or probably more). The conspiracy theorists amongst us might suspect that the way an Administration infused with market ideology will cut the spending on and benefits delivered by such a popular government program is to have private sector actors do the work for them. And if most of the new Medicare population is forced into private Medicare Advantage plans to get the best deal on the new drug benefit, and many of the most expensive patients are in CCIPs also run by private plans and their sub-contractors, it’s quite possible that the government can use them to beat up on the providers the same way that the employers used the HMOs to do it in the commercial sector 10 years ago.

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