On the morning of December 21, I opened my copy of the New York Times to find an op-ed that said almost exactly what I had said in a two-part article The Health Care Blog posted two weeks earlier. The op-ed criticized the Hospital Readmissions Reduction Program (HRRP), one of dozens of “value-based payment” programs imposed on the Medicare fee-for-service program by the Affordable Care Act. The HRRP punishes hospitals if their rate of readmissions within 30 days following discharge exceeds the national average. The subtitle of the op-ed was, “A well-intentioned program created by the Affordable Care Act may have led to patient deaths.”
The first half of the op-ed made three points: (1) The HRRP appears to have reduced readmissions by raising the rate of observation stays and visits to emergency rooms; (2) the penalties imposed by the Centers for Medicare and Medicaid Services (CMS) for “excessive readmissions” have fallen disproportionately on “safety net hospitals with limited resources”; and (3) “there is growing evidence that … death rates may be rising.”
That’s exactly what I said in articles published here on December 6 and December 7. In Part I, I described the cavalier manner in which the Medicare Payment Advisory Committee (MedPAC) endorsed the HRRP in its June 2007 report to Congress. In Part II, I criticized the methodology MedPAC used to defend the HRRP in its June 2018 report to Congress, and I compared that report to an excellent study of the HRRP published in JAMA Cardiology by Ankur Gupta et al. which suggested the HRRP is raising mortality rates. In its June 2018 report, MedPAC had claimed the HRRP has reduced the rate at which patients targeted by the HRRP were readmitted within 30 days after discharge without increasing mortality. Gupta et al., on the other hand, found that for one group of targeted patients – those with congestive heart failure (CHF) – mortality went up as 30-day readmissions went down.
Often, a Congressional gridlock is essentially good. This is because the executive arm of government is forced to consider a bipartisan approach to issues if it’s to secure the approval of both Democrats and Republicans in Congress.
The outcome of the midterm elections indicates that the Republicans have managed to retain their control of the Senate, while Democrats have secured control of the House of Representatives.
Health a Central Issue During the Midterms
According to a survey by Health Research Incorporated, the three top issues of concern during the midterm elections were health, followed by Social Security and Medicare, with 59% of the respondents irrespective of age, race or geography citing health as the most significant.
Among Trump’s electoral promises was a complete repeal and replacement of Obamacare under the Affordable Care Act (ACA) with a policy that was apparently less expensive and more effective. On his first day of office, Trump signed an executive order instructing federal agencies “to take all reasonable measures that minimize the economic burden of the law, including actions to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act.”
The Hospital Readmissions Reduction Program (HRRP), one of numerous pay-for-performance (P4P) schemes authorized by the Affordable Care Act, was sprung on the Medicare fee-for-service population on October 1, 2012 without being pre-tested and with no other evidence indicating what it is hospitals are supposed to do to reduce readmissions. Research on the impact of the HRRP conducted since 2012 is limited even at this late date , but the research suggests the HRRP has harmed patients, especially those with congestive heart failure (CHF) (CHF, heart attack, and pneumonia were the first three conditions covered by the HRRP). The Medicare Payment Advisory Commission (MedPAC) disagrees. MedPAC would have us believe the HRRP has done what MedPAC hoped it would do when they recommended it in their June 2007 report to Congress (see discussion of that report in Part I of this two-part series). In Chapter 1 of their June 2018 report to Congress, MedPAC claimed the HRRP has reduced 30-day readmissions of targeted patients without raising the mortality rate.
MedPAC is almost certainly wrong about that. What is indisputable is that MedPAC’s defense of the HRRP in that report was inexcusably sloppy and, therefore, not credible. To illustrate what is wrong with the MedPAC study, I will compare it with an excellent study published by Ankur Gupta et al. in JAMA Cardiology in November 2017. Like MedPAC, Gupta et al. reported that 30-day CHF readmission rates dropped after the HRRP went into effect. Unlike MedPAC, Gupta et al. reported an increase in mortality rates among CHF patients. 
We will see that the study by Gupta et al. is more credible than MedPAC’s for several reasons, the most important of which are: (1) Gupta et al. separated in-patient from post-discharge mortality, while MedPAC collapsed those two measures into one, thus disguising any increase in mortality during the 30 days after discharge; (2) Gupta et al.’s method of controlling for differences in patient health was superior to MedPAC’s because they used medical records data plus claims data, while MedPAC used only claims data.
I will discuss as well research demonstrating that readmission rates have not fallen when the increase in observation stays and readmissions following observations stays are taken into account, and that some hospitals are more willing to substitute observation stays for admissions than others and thereby escape the HRRP penalties.
All this research taken together indicates the HRRP has given CHF patients the worst of all worlds: No reduction in readmissions but an increase in mortality, and possibly higher out-of-pocket costs for those who should have been admitted but were assigned to observation status instead.
Egged on by the Medicare Payment Advisory Commission (MedPAC), Congress has imposed multiple pay-for-performance (P4P) schemes on the fee-for-service Medicare program. MedPAC recommended most of these schemes between 2003 and 2008, and Congress subsequently imposed them on Medicare, primarily via the Affordable Care Act (ACA) of 2010 and the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.
MedPAC’s five-year P4P binge began with the endorsement of the general concept of P4P at all levels – hospital, clinic, and individual physician – in a series of reports to Congress in 2003, 2004, and 2005. This was followed by endorsements of vaguely described iterations of P4P, notably the “accountable care organization” in 2006 , punishment of hospitals for “excess” readmissions in 2007 , the “medical home” in 2008 and the “bundled payment” in 2008. None of these proposals were backed up by anything resembling evidence.
Congress endorsed all these schemes without asking for evidence or further details. Congress dealt with the vagueness of, and lack of evidence supporting, MedPAC’s proposals simply by ordering CMS to figure out how to make them work. CMS staff added a few more details to these proposals in the regulations they drafted, but the details were petty and arbitrarily adopted (how many primary doctors had to be in an ACO, how many patients had to sit on the advisory committee of a “patient-centered medical home,” how many days had to expire between a discharge and an admission to constitute a “readmission,” etc.).
New rule, new culture
This process – invention of nebulous P4P schemes by MedPAC, unquestioning endorsement by Congress, and clumsy implementation by CMS – is not working. Every one of the proposals listed above has failed to cut costs (with the possible exception of bundled payments for hip and knee replacements) and may be doing more harm than good to patients. These proposals are failing for an obvious reason – MedPAC and Congress subscribe to the belief that health policies do not need to be tested for effectiveness and safety before they are implemented. In their view, mere opinion suffices.
This has to stop. In this two-part essay I argue for a new rule: MedPAC shall not propose, and Congress shall not authorize, any program that has not been shown by rigorously conducted experiments to be effective at lowering cost without harming patients, improving quality, or both. This will require a culture change at MedPAC. Since its formation in 1997, MedPAC has taken the attitude that it does not have to provide any evidence for its proposals, and it does not have think through its proposals in enough detail to be tested. Over the last two decades MedPAC has demonstrated repeatedly that it believes merely opining about a poorly described solution is sufficient to discharge its obligation to Congress, taxpayers, and Medicare enrollees. Continue reading…
To review: Dr. Yarhagi discusses a draft congressional bill that calls for the creation of a “Charter Organization” that “shall consist of one member from each of the standard development organizations accredited by the American National Standards Institute and representatives that include healthcare providers, EHR vendors, and health insurers.”
Four agreements: I agree with Dr. Yarhagi’s conclusion that the proposed charter organization will not succeed; I agree with his prediction that it won’t be able to develop useful interoperability measures (hint: these are the same vendors that have refused to cooperate for the past 30 years); I agree that the ONC or CMS will not decertify an EHR vendor that has over 50% of all American patients and providers; and I agree that there are some medical providers who intentionally refuse to share patient information (because they think it gives them a competitive advantage over their local rivals).
One disagreement: But I disagree strongly with Dr. Yarhagi’s faith in the market to ensure that healthcare information technology (HIT) vendors will be obliged to “develop sustainable revenue stream through reasonable exchange fees negotiated with the medical providers.” That is, he asserts that if there were a real market without federal subsidies and requirements that all healthcare providers buy the HIT, then providers and the HIT vendors would agree on reasonable fees for exchanging patient records.Continue reading…
Late last week, House Republican leaders declared their intention to bring H.R. 4015, the bipartisan, bicameral SGR repeal measure, to the floor for a vote.
Good news, you’d think, for doctors and the broader healthcare system, that we might finally be rid of the SGR’s broken machinations and perverse cycle of congressional intervention.
But House leaders added a footnote: the measure would be paid for by delaying the individual mandate, which CBO opined last week would save money through reduced enrollment in Exchanges and Medicaid. To cover the approximate $150 billion cost of the SGR measure, the mandate would probably need to be delayed by at least 10 years.
While sparing us a rehash of the individual mandate debate here, suffice it to say that the Obama Administration, the authors of the Affordable Care Act, and most healthcare insurers and providers consider it to be a linchpin of the health reform regime.
Without it, most agree, the consumer protections established by the ACA would precipitate spiraling premiums that would quickly destroy the market.
In other words, the House measure is DOA in the Democrat-controlled Senate and White House, which House leaders know all too well. In a move whose political deftness is hard to quibble with, they are coupling two very popular measures into a single package that they know the vast majority of Democrats can’t support.
Good politics? Probably. Good for enactment of SGR repeal? More like the opposite.
But don’t blame House leaders for the demise of SGR repeal. This move is a symptom, not a cause, of its end. As previously reported, the well-intentioned negotiators were having difficulty finding common ground on the so-called extenders package that would be included, and were miles apart on the offsets that would be used to fund it.
Congress just had an uncharacteristically big week – with significant implications for healthcare policy. It flew by fast and furious, so here we pause to unpack the most significant developments and what they teach us about the future.
1. The Permanent Doc Fix Effort is Real. You have to hand it to the committees of jurisdiction, they have kept their heads down and plugged away all year at permanently repealing the broken Sustainable Growth Rate (SGR) formula that dictates Medicare payments to doctors. They’ve floated new payment methodologies, added policy addressing the package of “extenders” that perennially travels with the “doc fix,” and now all three have successfully completed bipartisan mark-ups of their respective approaches. Furthermore, the three month SGR patch that was included in the budget deal is an implicit endorsement by congressional leadership that there’s actually a chance this could happen in the first quarter of next year.
The next step is to identify savings to pay the roughly $150 billion price tag, which has always of course been the biggest rub. That process is going to take center stage early next year in a “Super Committee-lite” process of negotiating various potential cuts to healthcare programs. The cynics are still betting against it, but we’re closer than we’ve ever been before to replacing the 15+ year-old SGR.
2. The Long-Term Care Hospital Sector Will Never be the Same. In a lesser-noticed component of the three month doc fix patch alluded to above, Congress eliminated the payment differential for LTCHs (pronounced el taks) and regular inpatient hospitals for patients who do not meet clinical complexity criteria. What began as an esoteric exemption for a small handful of hospitals in the early 1980’s and grew to a $6 billion Medicare benefit annually is now going to start to plateau.
The market liked the change, paradoxically, because it was gentler than some bean counters had recommended and gave plenty of time (four years) for sophisticated companies to adjust. But the hot LTCH business just got some pretty cold water poured on it.
3. The Budget Deal Helps Healthcare Programs. The Murray-Ryan agreement to set spending levels for the next two years alleviated some of the impact of the sequester on discretionary spending programs like those at the FDA, NIH and HRSA. This means that funding for new product approvals, clinical research, workforce development programs and some primary care services will be modestly improved in 2014 and 2015.
As we shake off the carb-coma and make our pre-resolutions, Congress and the Administration head into a sprint to the holiday recess fraught with health policy implications. Unlike every December in recent memory, there isn’t very much Congress actually has to do. Here are the top five things you need to know to follow the fun and prepare your organization for the changes afoot. A key theme to take home is that December 2013 is a month of anti-deadlines.
The Nov. 30/Dec. 1 “fix” to Healthcare.gov was set arbitrarily and has simply teed up another pivot point for opponents to pounce. We already know the wand hasn’t tapped the electro-synapses of the site yet to make the dang thing work like it should. Expect more incremental improvements through the month and enrollment numbers to come in above current rock-bottom expectations, with a healthy chunk coming from the proud, the few … the state-based exchanges.
The Dec. 13 deadline for budget conferees to produce a joint resolution is similarly fictional and self-imposed. While there are some burgeoning reports that co-chairs Murray and Ryan might be able to agree to FY14 funding levels and potentially alleviate some of the sequester, the buzz-o-sphere in Washington still has deep doubts. Even if the two negotiators come to agreement, House and Senate leadership have the bigger challenge of getting a bipartisan deal through their chambers.
Jan. 15 is the real deadline for a budget agreement and the real goal is writing a check to fund the government through Sept. 30. A budget resolution is helpful to give appropriators time to write actual spending policy, but it can be bypassed if the end-game is a continuing resolution that keeps current funding allocations in place. (Congress hasn’t passed an actual budget resolution since Democrats controlled both chambers.) At the end of the day, we’ll be back to the all-too-familiar roundtable of congressional leaders and Obama reps hatching a last-minute deal to avert a shutdown.
A minority of the Members of Congress are threatening to cause the United States government to default on its debts, unless the majority members agree to repeal or defund the Affordable Care Act, which Congress passed just a few years ago. There will presumably be some sort of negotiated solution. I worry that the negotiation range is being defined in a skewed way, between one pole and a moderate status quo, which is already the result of a prior negotiation. Seems like we have a one-way ratchet here.
My thought: perhaps the negotiations should go both ways, so that the end-result is more balanced. What if the Democrats made symmetric threats to cause default, unless:
Medicare is expanded to cover all the poor who do not qualify for Medicaid (filling the gap the Supreme Court created in its “coercion” opinion),
The Federal government creates a public health insurance option, to compete along with the corporate insurers (which was killed in final negotiations to pass the ACA),
The Federal government gets explicit authority to provide insurance subsidies in the health insurance exchanges it sets up for states that have refused, oh and, as a kicker,
Ronald Reagan International Airport (DCA) is re-named Jimmy Carter International Airport.
Ok, that last one is silly, but it might make for a fun bargaining chip, since it symbolizes the strategic game that is now being played, as we re-legislate settled questions. Positional bargaining is not pretty or enlightened, but if these chips can be traded, we might end up in the fallback position of keeping the Affordable Care Act as the negotiated compromise that it already is. Of course, the ACA is also the default rule, which has a nice double meaning in this context.
Christopher Robertson, JD, PhD is a visiting professor at Harvard Law School, an associate professor at the James E. Rogers College of Law, University of Arizona, and a research associate with the Edmond J. Safra Center for Ethics at Harvard Law School. He blogs at the Petrie-Flom Center’s Bill of Health, where this post originally appeared.
Congress is in recess, but you’d hardly know it. This has been the most do-nothing, gridlocked Congress in decades. But the recess at least offers a pause in the ongoing partisan fighting that’s sure to resume in a few weeks.
It also offers an opportunity to step back and ask ourselves what’s really at stake.
A society — any society —- is defined as a set of mutual benefits and duties embodied most visibly in public institutions: public schools, public libraries, public transportation, public hospitals, public parks, public museums, public recreation, public universities, and so on.
Public institutions are supported by all taxpayers, and are available to all. If the tax system is progressive, those who are better off (and who, presumably, have benefitted from many of these same public institutions) help pay for everyone else.
“Privatize” means “Pay for it yourself.” The practical consequence of this in an economy whose wealth and income are now more concentrated than at any time in the past 90 years is to make high-quality public goods available to fewer and fewer.
In fact, much of what’s called “public” is increasingly a private good paid for by users — ever-higher tolls on public highways and public bridges, higher tuitions at so-called public universities, higher admission fees at public parks and public museums.
Much of the rest of what’s considered “public” has become so shoddy that those who can afford to do so find private alternatives. As public schools deteriorate, the upper-middle class and wealthy send their kids to private ones. As public pools and playgrounds decay, the better-off buy memberships in private tennis and swimming clubs. As public hospitals decline, the well-off pay premium rates for private care.