I attended a Population Health conference this summer where a number of representatives from large health systems and physician organizations convened to discuss common challenges. Many of my healthcare colleagues assume that anything that carries the label “Population Health” must relate to health disparities and food deserts. While we do address these topics, the vast majority of sessions and conversations had one underlying theme: lowering the total cost of care.
In rebuttal to any charges that our group is far too corporate to be considered a fair example of Population Health advocates, even the Institute for Healthcare Improvement addresses the importance of managing costs with the third part of the Triple Aim stated as “reducing the per capita cost of health care”.
Whether it is from Medicare or commercial ACOs, the Efficiency metric in CMS’s Value-Based Purchasing program, or the continued push from commercial payors for bundled payment programs, health systems and provider groups are beset by demands regarding cost. Unfortunately, at this conference, and in most groups trying to meet the demands of Population Health, one key stakeholder group is often absent: Specialists.
If cardiologists, spine surgeons, and hospitalists cannot become engaged with Population Health principles, moving the cost needle will be very challenging, if not impossible. I believe there are ways, however, to engage specialists in providing efficient care.
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?
Test your Accountable Care Organization knowledge:
- Select all of the options that are True
- If you belong to an ACO you qualify for the alternative payment model track in MACRA
- Most ACO’s are enrolled in to a two sided risk model – (They share profits and losses with Medicare)
- In 2015, ACO’s saved Medicare more than a billion dollars
- None of the above
I have been mystified by Accountable Care Organizations ever since I first heard of them almost a decade ago. ACO’s have had a hallowed place in the world of health care policy for some time now. Everyone knew they were coming, and everyone knew they would be the answer. Traditional fee for service medicare that paid based on volume was thought to be the driver of rising health care costs. Regional variation in medicare expenses even when controlling for underlying population risk suggested that lower costs were possible without sacrificing quality. Imposing a capitated model of reimbursement tied to quality metrics seemed to be the answer and ACO’s were the vehicle to make this happen.
I was on board, though I freely admitted to everyone who asked, that I had no idea how they would work. To be fair, I was far more stressed about learning coronary anatomy in the cath lab, than I was about health care policy. By the time ACO’s finally started in 2012, I had been in practice for a few years, and I was paying slightly more attention. The passage of time now allows for the assessment of the value delivered by ACO’s and is a health care policy researchers dream. Clinicians, however, continue to be blissfully unaware of the construct. ACO’s exist in some alternate universe that is interesting and worthy of name dropping to establish your policy-cred, but even the coarse details are shrouded in mystery for most clinicians and patients. What follows is a brief primer and analysis of some recent data that doesn’t require an understanding of linear regression modeling.
Amid growing consensus that MACRA may delay from its 2017 performance year start, CMS is moving ahead with next year’s launch of the Comprehensive Primary Care Plus (CPC+) program.
Fourteen multi-payer regions and all participating payers were announced August 1, (listed below) and practices can now begin applying through September 15. CMS has launched an application portal for practices.
CPC+ is part of MACRA, as one of six Advanced Alternative Payment Models, but certainly can be undertaken on its own. CMS has a deadline of November 1 to produce a MACRA final rule, but can announce MACRA’s fate anytime prior.
Also newsworthy within CPC+ is CMS’ recent announcement that primary care practices can participate in a CMS MSSP ACO and the CPC+ program at the same time.
We all knew how this was going to go, or thought we did. Fee-for-service payment for health services was going to disappear, and be replaced by population health risk-based payment (or as some term it, “capitation”- fixed payment for each enrolled life). Hospitals and care systems invested substantial time and dollars building capacity to manage the health of populations, yet many are discovering a shortage of actual revenues for this complex new activity. Was population health a mirage, or an actual opportunity for hospitals, physicians and health systems?
The historic health reform law passed by Congress and signed by President Obama in March, 2010 was widely expected to catalyze a shift in healthcare payment from “volume to value” through multiple policy changes. The Affordable Care Act’s new health exchanges were going to double or triple the individual health insurance market, channeling tens of millions of new lives into new “narrow network” insurance products expected to evolve rapidly into full risk contracts.
In addition, the Medicare Accountable Care Organization (ACO) program created by ACA would succeed in reducing costs and quickly scale up to cover the entire non-Medicare Advantage population of beneficiaries (currently about 70% of current enrollees) and transition provider payment from one-sided to global/population based risk. Finally, seeking to avoid the looming “Cadillac tax” created by ACA, larger employers would convert their group health plans to defined contribution models to cap their health cost liability, and channel tens of millions of their employees into private exchanges which would, in turn, push them into at-risk narrow networks organized around specific provider systems.
Three Surprising Developments
Well, guess what? It is entirely possible that none of these things may actually come to pass or at least not to the degree and pace predicted. At the end of 2015, a grand total of 8.8 million people had actually paid the premiums for public exchange products, far short of the expected 21 million lives for 2016. As few as half this number may have been previously uninsured. It remains to be seen how many of the 12.7 million who enrolled in 2016’s enrollment cycle will actually pay their premiums, but the likely answer is around ten million. Public exchange enrollment has been a disappointment thus far, largely because the plans have been unattractive to those not eligible for federal subsidy.
Accountable care organizations (ACO’s) promise to save us. Dreamed up by Dartmouth’s Eliot Fisher in 2006, and signed into law as a part of the Patient Protection and Affordable Care Act (PPACA) in 2010, we have been sold on the idea that this particular incarnation of the HMO/Managed Care will save the government, save physicians and save patients all at the same time. I dare say that Brahma, Vishnu and Shiva together would struggle to accomplish those lofty goals. Regardless of the daunting task in front of them, the brave policy gods who see patients about as often as they see pink unicorns, chose to release the Kraken – I mean the ACO – onto an unsuspecting public based on the assumption that anything was better than letting those big, bad, test ordering, hospital admitting, brand name prescribing physicians from running amuck.
I realize I am being somewhat harsh towards the creators of the ACO morass. But, while they all may be well-meaning, hard-working folks that own a Harvard crimson sweater, their intent is to fundamentally change how health care is provided – this mandates a withering evaluation. As Milton Friedman aptly said, “One of the great mistakes is to judge policies and programs by their intentions rather than their result.” Thus, with little regard to intent, and with an eye on the end result, I say unequivocally : ACO’s do not work.Continue reading…
Last week, I was riveted to the deliberations on the Senate floor, as the fate of the Medicare Access and CHIP Reauthorization Act (MACRA – so far, more commonly called the “SGR fix”) was decided. One amendment after another failed to pass; the legislation ultimately passed by a vote of 92-8, and was signed into law shortly thereafter.
To date, much of the coverage of MACRA has focused on how it has fixed the “doc pay” problems of the last 18 years – rescuing us from a yearly round of negotiations about how to temporary avoid painful cuts in Medicare’s physician reimbursement rates.
It’s true that MACRA wiped out (and only partially paid for) the accumulated burden of postponed pay cuts. But it also took a huge step in ending the volume-based “fee-for service” payment system that the pay cuts were trying to restrain in the first place. In a volume-based health care world, the only way for the government and other payers to control runaway medical inflation is to make it harder for doctors to get paid (through rejected claims, paperwork, and prior authorizations), and to reduce the price they pay for each office visit, test, or medical procedure. Providers, paid less and less for each visit and service, can try to maintain their income by further increasing volume — seeing more and more patients in less and less time — or routing patients through increasingly questionable services, tests, and procedures. That is the dysfunctional state of US health care today, with patients caught in the middle of the arms race between those who pay the bills, and those who bill them– collateral damage.Continue reading…
In recent weeks, the market has reacted to a few noteworthy headlines, all involved with or touching upon value-based discretionary actions, and many with the not-so-hidden question: What’s In It for Me or WIIFM?
- CMS announced that by 2016 30% of fees in health care should be paid for through a value-based system, moving away from fee-for-service.
- ACO results have shown ambivalent outcomes.
- Outcomes-based contracts have permeated the Hepatitis C cost-nado (that’s a cost sharknado, the kind that fiercely defies cost controls and takes over all noise about payment reform and patient preferences).
- Reference-based pricing is a good/bad troublemaker in the middle of the value-based travails.
The latest rampages have appeared on two national and highly-regarded blogs: The Health Care Blog [Value-Based Reform] and The Health Affairs Blog [Go Slow on Reference Pricing].
As one of the loudest proponents on value-based designs, I lift the curtain again to show the thinking behind the movement from fee for service to value-based designs. All of these items above discuss the message of payment reform, or system alignment, but they are intensely linked to the patient-consumer ability to make the right choices, choose the right sites for care, and pay the right amount for services rendered to achieve health security.
This last—health security—should be at the heart of the US health system.
▪ It’s the place where patient competency is built and tested over time, as the patient becomes aware of health risks and chooses to modify behaviors to lower the risk.
▪ It’s the place where, when there are acute or emergent symptoms, there is no question but that the patient will be able to access the appropriate and affordable care in the safest possible setting, hopefully receiving care that delivers the patient back to functional health.
▪ It’s the place where caregivers and administrators are paid a competitive wage for serving the needs of the patient and getting the patient back to the best health possible.
Earlier today, Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced that HHS is doubling down on the historic shift taking place across the health care industry towards value-based care, and is setting a target of having 50 percent of Medicare payments under value-based care arrangements by 2018.
This would mean that in less than three years, around a quarter of a trillion dollars of health care spending would be made to providers who are being compensated not for ordering more tests and more procedures, but for delivering better outcomes – keeping patients healthier, keeping them out of the hospital, and keeping their chronic conditions in check.
This shift will address a central problem of the US health care system, one that lawmakers and policy experts on all sides of the issue agree is a key contributor to runaway medical inflation.
The logic is straightforward: by simply paying for the volume of services delivered, every provider has a strong incentive to do more — more tests, more procedures, more surgeries. And under this system, there is no financial incentive to maintain a comprehensive overview of patient care – to succeed by keeping the patient healthy, and health care costs down.
In making this announcement, Secretary Burwell took a step that many within HHS had been advocating quietly for years, and which many outside it have advocated more loudly.
Skeptics may ask: what does this accomplish? And why announce it now, when health care costs are already rising at the slowest rate in decades?
Mohammad Al-Ubaydli: Let’s just start from the beginning. Tom, can you please give us an introduction about yourself and your background?
Thomas Tsang: I’m a general internist by training. I practiced internal medicine in New York City, first at a small community hospital where I predominantly worked with residents and medical students and mostly taught principles of outpatient medicine, ambulatory care and interviewing techniques.
Then I was recruited by the Charles B. Wang Community Health Center. That’s when I got to use some of the public health knowledge that I had acquired: I worked on various public health initiatives for the community in New York City. The health center itself served a predominantly Asian population. It had four sites and one of the things that I did in the beginning was implement an electronic health record. That work led to my involvement with the Board of Health of New York City, which, in turn led to my work in Congress.
I was then selected for the Robert Wood Johnson Foundation/IOM Health Policy Fellowship on the Committee on Ways and Means-Subcommittee on Health and worked on some of the policies that led to the creation of ACO’s, i.e., Value-Based Purchasing, Pay for Performance and so on. I was fortunate enough to actually help implement some of the policies that I worked on! It’s a long answer to your question, but that’s the route I took.
Mohammad: It’s perfect. It’s really interesting to learn. Among the many things under your belt, it sounds like you have a successful electronic health record deployment, which is good–so well done! Tell me and our readers a bit about Accountable Care Organizations. What is an ACO and what is the point of it?
Thomas: The ACO is not a very new concept. It was a term that was coined by Elliott Fisher from Dartmouth Medical School, who is the director of Center for Health Policy and Clinical Practice. I hate to use the word HMO, but in a way, it’s almost like an HMO. It’s not really an HMO because it is actually a provider-led organization, not an insurance-led one.