I’ve heard a lot of shocking things since arriving in England five months ago on my sabbatical. But nothing has had me more gobsmacked than when, earlier this month, I was chatting with James Morrow, a Cambridge-area general practitioner. We were talking about physicians’ salaries in the UK and he casually mentioned that he was the primary breadwinner in his family.
His wife, you see, is a surgeon.
This more than any other factoid captures the Alice in Wonderland world of GPs here in England. Yes—and it’s a good thing you’re sitting down—the average GP makes about 20% more than the average subspecialist (though the specialists sometimes earn more through private practice—more on this in a later blog). This is important in and of itself, but the pay is also a metaphor for a well-considered decision by the National Health Service (NHS) nearly a decade ago to nurture a contented, surprisingly independent primary care workforce with strong incentives to improve quality.
Appreciating the enormity of this decision and its relevance to the US healthcare system requires a little historical perspective.
As I mentioned in a previous blog, the British system cleaves the world of primary care and everything else much more starkly than we do in the States. All the specialists (the “ologists,” as they like to call them) are based in hospitals, where they have their outpatient practices, perform their procedures, and staff their specialty wards. Primary care in the community is delivered by GPs, who resemble our family practitioners in training and disposition, but also differ from them in many ways.
In August, I wrote about how hospital monopolies are the biggest driver of health costs that nobody talks about. These powerful hospital chains know that insurers have no choice but to accept their jacked-up rates, and the cost of health insurance goes up whenever it suits their needs. Now, according to remarks by Federal Trade Commissioner J. Thomas Rosch, it turns out that accountable care organizations—one of Obamacare’s most touted policy gizmos—could make this problem far worse. “The net result” of ACOs, says Rosch, “may therefore be higher costs and lower quality health care—precisely the opposite of its goal.”
Rosch spoke last Thursday before the American Bar Association’s Antitrust Fall Forum, where he lambasted the “unintended consequences” of Obamacare’s headlong rush into the buzzword-filled land of accountable care organizations. ACOs, you will recall, are meant to improve the degree to which various physicians treating the same patient cooperate with one another. In theory, this would lead to better, more integrated care and reduced waste. In reality, ACOs will also stimulate mergers between hospitals and physician groups, worsening the problem of provider consolidation.
ACO’s purported savings shift costs to private insurers
The Congressional Budget Office, much to the dismay of Obamacare’s advocates, didn’t put much stock in ACOs, projecting that the law’s new Medicare ACO initiative would save $5.3 billion over ten years: eight-hundredths of one percent of Medicare’s projected spending over that period. “In other words,” Rosch points out, “the savings to Medicare from the ACO program are no more than a rounding error. Yet even the CBO’s modest cost savings projections are likely overstated.”
In a high-stakes political, clinical and economic poker game that goes by the name of Accountable Care Organizations (ACOs), the Centers for Medicare & Medicaid Services (CMS) has just issued a call for doctors and hospitals to grab some chips and ante up.
The set-up goes like this: one of the biggest potential changes in how health care is actually delivered contained in the Accountable Care Act was ACOs. They’re voluntary, but they allow doctor- or hospital-led organizations that take responsibility for coordinating the care of at least 5,000 Medicare beneficiaries to get reimbursed at a higher rate for providing better-quality, lower-cost care. It’s supposed to be a win-win-win for providers, patients and taxpayers and part of a more general move towards “value-based purchasing.”
The problem is that the draft rules proposed by CMS for ACOs back in March looked like a sucker’s bet. Not only were the requirements complex and expensive, the rewards were meager and the odds of winning were unattractive, particularly considering the initial costs to set up an ACO. The big health care systems and physician organizations that had been clamoring for a seat at the table when ACOs were first proposed told CMS they didn’t like the “house rules” and weren’t going to play. Although the concept of ACOs has deep bipartisan roots, a group of Senate Republicans anxious to pounce on any administration shortcomings jumped in with “serious concerns” about one more possible ObamaCare failure.
I guess I shouldn’t be surprised when two of the architects of the health care reform act write an op-ed that continues in the deception that the law would deliver access, choice, and lower costs. But that is what Ezekiel Emanuel and Jeffrey Liebman offer in their New York Times article, “Cut Medicare, Help Patients.”
The authors start by saying some things that make a lot of sense. They point out that it would be smart to “eliminate spending on medical test, treatments and procedures that don’t work — or that cost significantly more than other treatments while delivering no better health outcomes . . . [and that} can be made without shortchanging patients.”
But they quickly give up that fight: “The sad truth is, Washington is never going to do a good job of making smart cuts to Medicare. Elected officials hate being blamed for directly restricting access to medical treatments — even when those treatments are proven to be worthless.”
So then they revert to their underlying bias, er, theology: “The responsibility for ending unnecessary medical spending needs to be placed in the hands of doctors and hospitals. This can happen only if we change our fee-for-service payment system.”
The Obama administration has told us how it intends to change Medicare many times and in many places.
It wants to replace fragmented decision making by independent doctors with coordinated care delivered by doctors working in teams, connected to a medical home. It wants Medicare to purchase quality, not quantity. It wants decisions to be evidence-based. It wants electronic records in order to standardize care and reduce errors.
So how does the administration plan to get all this done? It plans to spend hundreds of millions of dollars on pilot programs to try all these ideas out and then ……
Wait a minute. Aren’t these ideas already being tried out somewhere? Yes. In Medicare, as a matter of fact. How well are they working? As a long-time critic of managed care, I admit the results look pretty good.
After reading the July edition of Health Affairs, I’m concerned about the impact of Accountable Care Organizations (ACOs) on cost trends in the US health care system.
In The Accountable Care Organization: Whatever Its Growing Pains, The Concept Is Too Vitally Important To Fail, Francis Crosson of the Kaiser Permanente Institute for Health Policy plays down the various criticisms of ACOs (that they may stifle innovation, unleash a torrent of regulation, and rely too heavily on fee for service payment methodologies) and argues that we need to help them succeed because there are no good alternatives. If not,
both public and private payers will probably be forced into across-the-board reductions in payment rates to providers, because the state of the economy will require cost reductions, and there will be no other obvious course to pursue. Reductions in quality and access may follow…
But the emergence of ACOs is driving hospitals to consolidate, buying other hospitals and physicians practices.
In the latest edition of Health Affairs, Dr. Francis Crosson, chair of the Council of Accountable Physician Practices and senior fellow at Kaiser Institute of Health Policy, offers an impassioned defense of Accountable Care Organizations. Crosson’s main point is in his title: “The Concept is Too Vitally Important to Fail.” He adds:
“The accountable care organization model is intended as an option both for Medicare and for non-Medicare, commercial health care services. However, the general model and the specific shared savings model proposed for Medicare have come under criticism. Much of the criticism is valid and should be addressed. However, none should serve to prevent the evolution of this model.”
If the concept is “It sure would be nice to hold down costs and improve quality” then how can I argue? Who wants to argue against God, Mother or Country? But if the concept is “The only way to save the healthcare system is to organize everyone into ACOs,” well forgive me for disagreeing.
By VINCE KURAITIS
It’s understandable that a healthcare delivery system would have a mindset and business objective to keep referrals within its network of care providers. Businesses have a right and an obligation to try to hang on to their customers.
It’s a different issue whether closed or walled garden HIT is an acceptable means toward that end.
Outside of healthcare, we understand and can accept that businesses used closed, proprietary IT as part of their business model. Apple has designed their iPod with an eye toward incompatibility and high hassle factor in not being plug-and-play with other music players and systems.
IMHO, however, healthcare is different. Keep your proprietary business model away from my body and gimme my damn data.
Google+ v. Facebook on Data Portability
We are witnessing an important dynamic begin to play out between FB and Google+. I note a significant difference in mindset and policies toward data portability.
FB seems to have a mindset to maintain customer data within its walled garden as much as possible. For example, when G+ first opened, I remember seeing an early article about how easily to import some of your FB data into G+; hours later I read an article how FB had plugged this leak. Deleting your FB account is difficult — there are articles walking you through the 634 steps you need to go through.
G+ seems to be built on a diametrically opposing mindset. You can download your data. You can export your data and import it into another social networking site. You can easily delete your G+ account and wipe out your data.Continue reading…
Medicare Advantage (MA) is stuck in a cycle in which the government wants to micromanage MA plans and cut their reimbursement to satisfy deficit hawks, while the health plan industry lobbies for exactly the opposite. The result is a negative-sum game, a stalemate that benefits nobody.
It turns out that this stalemate would be remarkably easy to overcome, in a way that makes money for the government, gives seniors a visibly better deal, reinvigorates the Medicare ACO, and entices many more members into MA. Since MA plans are held to quality standards far beyond what Medicare fee-for-service requires (remember, straight Medicare is a payment system, not an insurance plan), I am going to assert that the increasingly popular MA plan option – especially plans with high Star ratings – provides better care coordination for seniors than fee-for-service (FFS). The government recognizes this implicitly by initiating Medicare ACOs. ACOs are supposed to close that care coordination gap in FFS but it does not look like that is going to happen on a broad scale in the near future.
If one accepts the premise that more care coordination is a worthy goal, here’s a better way of addressing that care coordination gap by getting more seniors into MA, rather than by setting up a parallel universe of ACOs…and do it in a way that clearly saves money for the government and seniors.
Start with the recognition that most 64-year-olds are already in an HMO or PPO. Today’s sign-up procedure for Medicare acts as though neither innovation exists. A senior becomes eligible for Medicare and then (in competitive markets) gets deluged with offers to join one or another MA plan, which requires switching out of FFS — a model that, while called “traditional,” is totally unfamiliar to patients coming out of commercial HMOs. These enticements to seniors are quite costly for the health plans, involving brokers, salespeople, advertising etc.
How about a system in which MA becomes an opt-out instead of an opt-in for 65-year-olds, meaning people would automatically start receiving their Medicare benefit through a health plan instead of FFS? As you read what follows, assume that MA would still be totally voluntary and that people who want the old-fashioned FFS can simply opt into it.Continue reading…
A study released last week by the Massachusetts Attorney Generalcontains surprising data to challenge two commonly held ACO (accountable care organization) ”Field of Dreams” assumptions. These assumptions relate to patient ”leakage” — out-of-network patient care and referrals.
1) Hospital administrators assume that tighter physician-hospital integration (e.g., through employment of physicians) will result in ”captive referrals” by physicians back to the mother-ship hospital.
2) Medicare administrators are assuming that Medicare Shared Savings ACOs will be able to coordinate patient care even without limitations on patients’ choice to go to providers outside of the ACO provider network.
Here’s the data that challenges the validity of BOTH of these assumptions:
Particularly for provider systems where hospitals and physicians are jointly at risk for the quality and cost of patients’ care, and have worked together to coordinate and improve care, we would expect to see physicians referring to their partner hospital more often. However, for the two physician-hospital provider systems in Massachusetts with the most years of experience managing referrals for HMO/POS patients under a global payment, one health insurer’s 2009 referral data shows that only 35-45% of adult inpatient care, as measured by revenue, goes to the partner hospital. That percentage can be even lower for providers with little to no experience managing where their patients receive specialist/hospital care, or under plan designs that do not require referrals. [emphasis added]