New Payment Methods—Some Early Results
Unless you have been living in a remote jungle, you have no doubt heard that CMS is trying to drive payment for services away from the traditional fee for service model, in the belief that the model is inherently inflationary and a major contributor to the “over-production” of medical services. The Henry J. Kaiser Foundation has published a primer detailing the various models and their current state of deployment, which I recommend for those who want to bring their understanding up to date. The authors conclude that, as would be expected from new programs, results are uneven, with some, but not all, showing improvement in various quality measures, but most showing little financial benefit to CMS.
I have previously discussed the issues revolving around the current state of quality measures and will not revisit them here. Instead, I want to focus on a recent report from the Partners HealthCare ACO project. It is generally recognized that relatively few patients in a health insurance pool account for a major portion of the expenses. This paper set out to study the variation in clinical characteristics and care-utilization patterns among payer-defined groups. They looked at the costliest 1% of patients in each payer category for Partners HealthCare, a large integrated delivery system in Massachusetts.
For Medicare patients, the costliest patients had an average of eight co-morbid conditions, and more than half had end-stage sequelae of ischemic heart disease, congestive heart failure, or chronic kidney disease. In the Medicaid population, mental health disorders, hypertension, and asthma were the principal diagnoses, while in the commercially-insured population, hypertension, depression, arthritis, and chronic kidney disease were the most common. Much of the high cost was associated with use of biological agents for arthritis and cancer treatment.
The authors note that care management programs would need to be different to manage these issues in the different groups. For instance, in the Medicaid population, mental health resources are crucial, whereas in the commercially insured population, traditional pharmacy benefit management might be more useful.
“Focusing on high-cost patients has become an attractively simple approach to improving care and reducing costs. But this policy panacea is challenged by the reality that patient demographics, health needs, and utilization patterns vary substantially among populations. Optimizing investments in this area will require improving analysis of which patients are amenable to care-delivery interventions and prioritizing interventions according to the specific needs of the subpopulations.”
Since my expertise is in care of patients with end-stage kidney disease, I am not surprised to find they are in the high-cost group for both commercial and Medicare patients. I have considered my experience with a view toward identifying instances where the system could be changed to save money and improve outcomes without resorting to overt rationing. Unfortunately, there are not many major opportunities. Let me use two examples.
Much effort has been expended on getting patients on hemodialysis to have a functional AV fistula. Clearly, no one thinks a catheter is a good option, and I, like most of my colleagues, make a serious effort to get a permanent access placed ahead of time. Now some patients “parachute” into the system, but there are also many patients who refuse to keep appointments with the surgeon out of fear. I have noted, too, that dialysis patients appear “sick” to ER physicians and hospitalists, who tend to admit them more quickly than the attending nephrologist might. Some of this reflects the fragmentation of care that has increased in recent years, and that I have also commented on before. But I am not sure care management is going to solve the fragmentation issue.
Perhaps what we need is a personal physician for the high-cost patient—someone who is aware of the patient’s functional state, wishes, and accepts responsibility to guide the patient through the care process. Of course, ancillary staff can help with this process, but perhaps the high-cost patient needs a “medical home” coordinated by the specialist. Now this might work for dialysis patients, but is is practical for patients with congestive heart failure? I can see a couple of problems. First, the heart failure patient is not seen as often as the dialysis patient, and it will be very expensive to have that patient seen. Remote access monitoring is fine, but I don’t think there will be a substitute for personal, face-to-face contact. Second, the cardiologist is personally invested in and handsomely rewarded for procedures, so what is going to induce him/her to give that up for the low-paid evaluation & management services of the congestive heart failure patient?
We are clearly in the midst of a massive experiment with how we pay for medical care, but I suspect the results will continue to be conflicting and generally unsatisfactory until we can arrive at a societal consensus about what we want. I still think most well people want Wal-Mart medical care—everyday low prices and open 24 hours/day. But when those people become sick they want Neiman-Marcus medical care—the best that money can buy. One delivery system is going to be hard pressed to do both.
17 April 2016
 Baseman S, Boccuti C, Moon M, Griffin S, Dutta T. Payment and Delivery System Reform in Medicare: A Primer on Medical Homes, Accountable Care Organizations, and Bundled Payment. February 2016. Kaiser Family Foundation. Accessed 25 March 2015 at https://kaiserfamilyfoundation.files.wordpress.com/2016/02/8837-payment-and-delivery-system-reform-in-medicare1.pdf.
 Powers BW, Chaguturu SK. ACOs and High-Cost Patients. N Engl J Med 2016;374(3):203-205. doi: 10.1056/NEJMp1511131.
Confronting The Quality Paradox - Part 1
Confronting The Quality Paradox - Part 2
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Confronting The Quality Paradox - Part 3
Confronting The Quality Paradox - Part 4
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Confronting The Quality Paradox - Part 5
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The Practicing Physician and Medicare