A Real (Living, Breathing) Health Care Reform Plan: Drop MACRA

Dear Washington,

Congratulations! You have listened to the AMA and practicing physicians and made it a little easier to comply (at first) with the Medicare Quality Payment Program, part of the massive MACRA “pay for value” law. 

But CMS’ announcements in The Federal Register and “fact sheet” are incomprehensible gobbledygook that will be understood by neither doctors, patients, nor the rest of society. The language personifies the complexity, unwieldiness and confused thinking in this huge national policy. 

MACRA is a $15 billion boondoggle that the best research shows will neither improve quality nor control costs. Paying doctors for quality (e.g., doing a blood pressure exam) or efficiency may make sense theoretically, but it doesn’t work. Rather than making a dent in the continuing upward spiral of healthcare costs in America, it can even result in some doctors avoiding sicker patients because it affects their quality scores and income.

Early, poorly designed research suggested that paying for health or cost savings was effective, but these research designs did not account for already occurring improvements in medical practice that the policymakers took credit for. Decades of stronger, well-controlled research debunked these early findings and conclusively showed no effects of these economic policies.

So why does the Congress and administration continue to press ahead with this same tired and impotent policy?

Most importantly, a large cadre of influential economists have convinced the government that money is the only driver of quality and efficiency. Nothing could be further from the truth. Many factors affect measures of quality and cost savings. These include:

Social problems and lack of supports are root causes of poor health outcomes. These include poverty, language barriers, spousal abuse, drug abuse, rurality, early manifestations of dementia and many more. These factors are usually not measured by Medicare. 

Further, doctors do not prescribe antibiotic medications to patients who are allergic to them even if they are promoted in a quality measure. Similarly, after the ACA required CMS to penalize hospitals for hospital-acquired infections, studies showed that some doctors were simply altering codes to make it appear that the patient was admitted with the infection. When a better CDC dataset was used instead of “doctored” Medicare claims, this study showed no effect of the penalties on infection rates. 

In addition, as Uwe Reinhardt said, “the idea that everyone’s professionalism and goodwill has to be bought with tips is bizarre.” Why should Doctors only respond to financial incentives when thousands of studies have shown that opinion leaders, knowledge, clinical skills, patient demands and many other non-monetary factors all influence quality of care?

Perhaps the biggest reason for this giant boondoggle is the unflinching confidence in economic theories and models that lack a shred of evidence. Even pay-for-value and alternative quality contract policies lack any evidence that support programs like MACRA. In fact, we now have several large studies of accountable care organizations (ACOs) published in top medical journals that celebrate an inconsequential savings of about 1% without even considering (or measuring) that healthcare delivery systems spend much more than this in ACO operational costs; thus, the MACRA-Like ACOs actually lose money on a societal basis.

Currently, we are abusing primary care doctors on the front line with dozens of bureaucratic penalties and regulatory policies aimed at improving their performance.  

It is time to confront the reality of our abysmal, incomprehensible and inefficient healthcare system that charges far too much to our patients and society at large. It is time to move towards a simpler system that nevertheless embraces certain free-market principles because a single payer plan (“Communist medicine”) is not in the political cards. But we can reduce our healthcare expenditures by almost half by adopting any one of several European health plans that retain an insurance industry, guarantees access to all citizens to see any physician (e.g., in Germany), and totally eliminates high deductible health plans (e.g., those in the ACA) that can delay essential care and cause adverse health effects among low income diabetic patients. The savings are due to fair, negotiated price schedules that are more ethical than widely varying prices in the United States that are sometimes the result of large medical systems with market power determining higher prices than those of smaller institutions. 

We spend about one-fifth of our gross domestic product on medical care. If anything, this cost is accelerating since 2000. It is time to stop the nitpicking, band-aid regulatory policies that are driving doctors crazy without reducing costs or improving quality. It is essential to work towards the achievement of a new system of care that covers the entire population and costs less. Neither The ACA nor any Republican plan can accomplish this worthwhile goal.

Stephen Soumerai is Professor of Population Medicine and teaches research methods at Harvard Medical School.

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8 replies »

  1. First, a breath of fresh air from none other than a Harvard professor of pop health! I would
    argue most ivy league folks are full throated MACRA lovers. I bet he’s none too popular at the eating club. Thank you Dr.SOUMERAI for being on the correct side of this MACRA debacle!
    Second, as a front line ortho surgeon, I was completely disappointed with the SEEMA team and CMS when they put out the latest MACRA 1000 page “easing of the regs”. I was really hoping for a full stop. This administration is always spewing how they want to undo horrible regs, and this seems like a perfect monster to kill. Seema and Price have been a total disappointment.
    Third, all the “medical societies” that are throwing their support behind the new proposed rule, are NOT speaking for real MDs. Real practicing MDs that have been tortured by these horrible burdensome meaningless reporting regulations have had enough. The literally do NOTHING to improve care outcomes or reduce cost and are a massive complex burden . Without a doubt they worsen cost, pile more useless work on already burned out MDs, and confuse the whole picture on “value”. Its time to flush all this, just like KIP and others have been saying. Either way, at some point, beating the dead horse of HMO, value based care, ACO, APM, etc will suddenly make sense when the smell gets bad enough. It has been a true lesson in the waste and abuse of Wash DC when it comes to trying to manage programs, money, cost and value. Wow are they happy to latch onto a buzzword program with NO evidence of success, even with proven failure, they just cannot let go of the puffery language program. MACRA is dead. They can attempt to flog us, but it will only push more of us out of practice/Medicare and they really do not want that. There is already a significant shortage of working MDs.

  2. A first step in a compromise on health care.
    Both Obamacare and the Republican health plans have a similar problem with covering older workers on individual plans. The older workers are partly responsible for the high cost of Obamacare exchange plans and the Republicans who seem only interested in covering younger healthy workers have a plan that will impose very high premiums on those aged 55-65.
    Allowing those aged 55-65 to sign up for Medicare would fix this (Bernie Sanders proposes this), but Republicans would never go along with it.
    A compromise would be to allow young-seniors to buy into the Medicare.- Advantage plans. Because they are younger than most Medicare retirees it should cost them less the $850 a month that Medicare is paying for the plans. They would still use the Republican tax credit to help pay for it.
    Republicans would like this because:
    a) It actually creates more competition. Nobody realizes it yet, but there may be a shortage of insurance companies willing to cover individuals under the Republican plans.
    b) The Medicare Advantage insurance companies made big contributions to Republicans who opposed the so-called “Medicare Cuts” in Obamacare.
    c) The Medicare Advantage companies might even offer relatively low prices
    Democrats should like this because:
    a) It provides pretty good comprehensive coverage.
    b) It could be called an Obamacare “fix”
    c) It would require their votes because it is revenue-neutral, involves neither taxing or spending, and thus doesn’t qualify for Reconciliation.

  3. Like Kip, I wonder how many nails it will take on these snake oil management fads like MACRA. I think we could save a lot of nails by a more direct address of the revenue streams of those who profit from them. Some financial accountability will go a long way. For instance: even though medical homes are embedded in legislation, the lack of financial support from payers and CMS, along with unsustainable overhead, will ultimately sink the model into well deserved irrelevancy. The cheerleaders are frequently unaccountable. That has to change. We cannot have physicians, think tanks and medical societies promoting one stupid unproven idea after another without validation or accountability. Almost no science goes into these ideas before harried mass implementation. Dig these clowns up and rub their nose in it every time it happens. Margalit has it right: we need some new ideas, just please use the scientific method instead of raiding the public trust through the direct to legislation path of the scoundrel.

  4. Thank you Mr. Soumerai.

    And thank you to those non-physicians who have left comments that exhibit a much greater understanding of the MACRA disaster than anything we get from our truly pathetic medical societies.

  5. “a single payer plan (“Communist medicine”) is not in the political cards”

    Gratuitously mars an otherwise serious and well-argued post.

    “we can reduce our healthcare expenditures by almost half by adopting any one of several European health plans that retain an insurance industry, guarantees access to all citizens to see any physician”

    Glosses over the fact that comparable OECD nations spend about 1/3 of their GDPs on the broad combination of explicit health care delivery and the totality of “upstream” health-enhancing social services, whereas the U.S. is at about 25%. (See Bradley & Taylor, “The American Health Care Paradox”)

    “if we counted countries’ combined investment in health care and in social services, the United States was no longer spending the largest percentage of GDP— far from it. In 2007, for example, the United States devoted only 25 percent of gross domestic product to health and social services combined, while such countries as Sweden, France, Austria, Switzerland, and Denmark dedicated about 30 to 33 percent of their respective GDP to the combination. In 2007, while the United States ranked highest in health spending, it ranked only thirteenth in spending on health services and social services combined…”



  6. Steve, thank you very much for this summary of the research on pay for performance. It is very helpful to see it reviewed in one essay.

    The question your essay raises for any thinking person is, How many more nails in the P4P coffin do P4P advocates need before they give up? I want to offer the faint hope here that the imminent failure of MACRA, which is nothing but a giant P4P scheme, might be the last nail in the coffin for P4P advocates.

    The history of the managed care movement should warn us not to get our hopes up. The single most important privilege of being a managed care advocate is you never have to say you’re sorry. If HMOs didn’t work, it was because doctors badmouthed them to patients, or the news media told horror stories about them, or we didn’t have universal electronic medical records for them to use. If EMRs didn’t work, it was operator error (see the goofy 2005 “literature review” by RAND researchers Richard Hillestad et al. in Health Affairs, funded by Cerner, Hewlett Packard and so on, in which they rejected all research which found a negative effect or no effect of EMRs. Here’s their rationale: “We chose to interpret reported evidence of negative or no effect of HIT as likely being attributable to ineffective or not-yet effective implementation.”) If “medical homes” don’t work, its the unwillingness of doctors to change. If “patient engagement” doesn’t work, yada yada….

    But I harbor a faint hope that the failure of the P4P fad will elicit a different response from the illuminati. I harbor that hope because the rise and fall of P4P will have been so rapid and will have been so visible that even P4P advocates will have to do what real scientists do when experiments fail — admit failure and look for the reasons why, not scapegoats.

    P4P’s birth was recent (it was rolled out around 2002 and 2003, and the acronym “P4P” became common around 2004 as I recall), and its rise to stardom was rapid (it was implemented in the UK on a national basis in 2004, it was inflicted on docs and hospitals by numerous payers in the US, and got written up as the oppressive MACRA in the US in 2015). P4P will first fail, and fail quite visibly, in the MIPS MACRA program; how long it will take for its role in the failure of the APM MACRA program to become clear is harder to say.

    Those of you who are interested in studying how the managed care movement copes with the highly visible failure of P4P to work within MIPS should monitor the Medicare Payment Advisory Commission’s comments about MACRA and P4P. MedPAC never met a managed care fad it didn’t love. They were among the first to endorse P4P 15 years ago. But now that they are in the same position as the dog that caught the car — now that the nostrum they flogged so heartily is the law of the land they find themselves in a very difficult position.

    I will probably have more to say soon about MedPAC’s tortured reaction to its realization that P4P will fail MIPS. For now, I urge readers to open up MedPAC’s June 2017 report to Congress http://www.medpac.gov/docs/default-source/reports/jun17_reporttocongress_sec.pdf?sfvrsn=0, go to Chapter 5 on MACRA, and read the 4-page executive summary of that chapter. You’ll see MedPAC stating clearly that the MIPS portion of MACRA can’t work in its current form because “fundamentally” it’s not possible to measure “quality” at the individual physician level. You’ll want to yell and applaud MedPAC for its backbone. But then you’ll read MedPAC’s crazy solution and you’ll want to shake your head and get yourself a stiff mood-altering drink.

    But let us count our blessings. MedPAC has only recently come around to admitting that P4P at the individual physician level can’t work and will therefore fail within MIPS. It took them 15 years. But they got there. Maybe it won’t take too many more nails in the P4P coffin for MedPAC and other MACRA proponents to admit that P4P will fail both the MIPS and APM MACRA programs.

  7. First and foremost I think we need to quit wrapping duct tape and strings around this thing. And I think we need to quit giving carte blanche to every political appointee and every CMS bureaucrat to implement every hare brained idea spewed by some think tank or some academic publication mill. With thousands upon thousands of regulations there is one health care regulation that is missing: no sweeping programs should be funded without a successful and repeatable trial-like pilot.
    Maybe an independent FDA process for policies and regulations….

  8. We have to get prices down pretty soon else the entire system grinds to a halt….just as transpotation would effectively halt if gasoline were 40$ a gallon.

    But I think we have only two tools to bring prices down: competition or large purchasing (oligopsony or monopsony).
    Tell me if you can think of other tools that work; price controls, e.g., don’t work. Over-supply seems improbable.

    Now, large purchasing means essentially some socialism. Well, I guess you could have huge purchasing cooperatives that were private enterprises, but to be effective these would seem to need government backing because they would be denying some large firms access to the market as well as provider groups and pharmaceutical enterprises….and courts, and government would have to decide if these actions were OK.

    And competition, the other tool, is also difficult in the health care sector because you need to compete on subsitutable goods or services. And every nuance in the world is used to show that this drug is a little different from that drug and this service (insurance, plan, policy, treatment, whatever) is not exactly equivalent to that service. Tough problem.

    So we have a wicked problem with two bad solutions. Personally, I believe that we may have to go to a little micro-socialism and manage health care from small political units–hospital districts, counties, maybe states.) This would give us some ologopsony and we could enhance more competition by setting up bidding situations. But it has problems too, with people traveling from health care districts to other districts, and drugs being sent and smuggled every which way.

    You can’t run health care from a national level because it gives the feds power to control too much. Eg they could win an election by telling a few states that were going to pay for hundreds of hours of psychotherapy as a regional trial for depression therapy.

    But, anyway, if we could do a trial and see if we could make, say, non-ambulatory care a public good in a health care district or county, and put everyone on salary (docs, administrators, etc.), have no patient billing function whatsoever, set up a large purchasing function to buy drugs and services and providers, and eliminate all in-patient insurers….if we could do all this…we might find that it would be the least bad way to go. This should probably be our goal–grasping for least bad solutions.

    It would be difficult to experiment thas way for ambulatory health care because we can’t as easily put everyone on salary in that situation.