Posts Tagged ‘Medicare’

New Study Reveals Where Healthcare Costs Are Rising

Thursday, May 31st, 2012

Higher prices charged by hospitals, outpatient centers and other providers drove up healthcare spending at twice the rate of inflation during the financial crisis – even as patients sought less medical care, according to the first-ever Health Care Cost and Utilization Report. According to Kaiser Health News, prices rose five times faster than the inflation rate for emergency room visits, outpatient surgery and facility-based mental health care from 2009 to 2010, according to the Health Care Cost Institute (HCCI), a nonpartisan research group funded by insurers.  Prices fell only in nursing home care, which declined by 3.2 percent in the cost per admission.  Rather surprisingly, the fastest growing spending was in children’s medical care.

“The story really does seem to be prices,” said Martin Gaynor, chair of the institute’s governing board and a healthcare economist at Carnegie Mellon University.  One of the most comprehensive analyses at real claim payments made by insurers, the study’s findings raise questions about the nation’s $2.6 trillion annual healthcare bill: Why are medical services costs rising significantly faster than inflation?  Is the fast increase in spending on children a glitch, or a long-standing drift with major implications for future costs?  “If you don’t know what the cause is, you don’t know what the right policy lever is (for a solution),” Gaynor said.

The study’s results are based on nearly three billion claims paid by Aetna, Humana and UnitedHealthcare for 33 million people with employer-based insurance.  The data represent approximately 20 percent of the people with insurance nationally, but do not include spending for people who are on Medicare, Medicaid or those who purchase private policies.

According to the report, people with job-based insurance “are paying more and getting less,” said Chapin White, a senior researcher at the Center for Studying Health System Change, a nonpartisan think tank.  Hospitals and other medical providers “just seem to be able to raise prices faster than general inflation.”

“This is an important study that clearly demonstrates that rising prices for medical services are driving health care cost growth,” said Karen Ignagni, president and CEO of America’s Health Insurance Plans, the industry lobby. “Reducing medical costs is essential to making health care coverage more affordable for individuals, families, and employers.”

Before this treasure trove of data was available, researchers have relied on far smaller surveys of employers or on government claims statistics from Medicare, which primarily covers Americans over age 65.

Healthcare researchers have wondered why, after more than 10 years of startling growth, healthcare spending is now rising more slowly.  The researchers’ numbers lend support to one of the most popular theories: People are using less healthcare.  According to the report, between 2009 and 2010, people with employer-sponsored insurance had 3.3 percent fewer admissions to hospitals and other medical facilities, 3.1 percent fewer “outpatient” visits, and virtually no change in the number of procedures performed at physicians’ offices.  There was a slight increase in procedures performed at medical facilities, which rose by two percent, and use of prescription drugs, which went up by just under one percent.

“People had speculated that there was a decline in utilization, but by analyzing over three billion claims we now know not only the trend but the magnitude of the trend,” said David Newman, the institute’s executive director.  “It’s one thing to believe something, it’s a completely different thing to actually know it.”

If these tendencies continue, Gaynor said, “we may need to think about where we’re directing our policies” to control costs.  That’s because healthcare reform initiatives like accountable care organizations — networks of hospitals and doctors that will work together to coordinate patients’ care and cut out unnecessary services — may not help if they’re still charging more for those services.  Gaynor suggested that it might be worthwhile to keep a closer eye on consolidation in the health care sector — since larger hospitals and health systems might have the leverage to demand higher prices from insurers. He also said it might be more effective to regulate prices or increase the portion of health costs insured people pay so that they demand better deals.

Although the insurers whose data was analyzed provided “seed funding” for the study, they did not limit the questions that researchers can ask and have no control over what they produce, Gaynor said.  The group plans to update the database with more-recent claims and make the information available for further study.  “There’s been an awful lot of consolidation in certain sectors of the healthcare industry, and we know that tends to lead to higher prices, but we can’t draw any conclusions yet,” Gaynor said.

Which One Do You Like? Healthcare Insurance Exchanges or Marketplaces?

Wednesday, May 23rd, 2012

If a Medicare staff recommendation is okayed, health insurance exchanges may be re-named.  According to Kaiser Health News , that is because, Medicare officials say consumers understand words like “marketplace” better.  “We are recommending not using the word ‘exchange’” in enrollment materials, said Julie Bataille, director of the CMS Office of Communications.  While Bataille didn’t mention the preferred substitute, she dropped hints.  “Words like ‘marketplace’ resonate much more with the consumer and also tend to be something that is all inclusive,” Bataille said.

According to Bataille, “exchange” can have a number of different meanings to consumers, including the idea that they may have something to trade.  The Patient Protection and Affordable Care Act (ACA) requires the federal government to establish health insurance exchanges in states that refuse to create their own.  They are often described as online marketplaces similar to Travelocity.com or Amazon.com, where consumers can search for insurance policies that fit certain criteria.  Enrollment information will become available in the fall of 2013 and the exchanges — or whatever the ultimate name is – will start operating in 2014, unless the Supreme Court declares the law unconstitutional.

The word “exchange” appears 247 times in the ACA, while “marketplace” is not mentioned once, according to Kaiser Health News.  But that doesn’t mean officials are obligated to use it, said Brenda Cude, a professor of consumer economics at the University of Georgia and a consumer representative for the National Association of Insurance Commissioners.  “I don’t believe that Congress is any kind of expert on how to communicate with consumers,” she said.  But “marketplace” may not be a fool-proof alternative, Cude said.  She is concerned that comparing a health insurance exchange to a shopping website encourages the notion that the lowest price policy is the best choice.  That may be true when looking for a commodity like a cheap airfare to a single destination, but not for healthcare policies offering different benefits.

Bataille said the Medicare staff’s advice to avoid the term “exchange” is supported by external research and the agency’s focus group testing this year in Cleveland, Dallas, Miami, Philadelphia and Phoenix.  CMS “routinely” tests its materials and websites with consumers “to make sure we are serving our beneficiaries as well as possible,” Bataille said.  “So we see our work on the exchanges as an extension of that.”  According to Bataille, CMS will seek public comment on the enrollment materials before finally deciding whether to use the word “exchange” or “marketplace”.

Non-Profit Hospitals Will Take Financial Hit If the Individual Mandate is Struck Down

Monday, May 14th, 2012

If the Supreme Court overturns the individual mandate that requires Americans to buy healthcare insurance that is contained in the Patient Protection and Affordable Care Act (ACA), non-profit hospitals will struggle with higher costs, according to Moody’s Investors Service.  The individual mandate has become the focus for legal attacks on the healthcare law.  It “would result in a significant reduction in uncompensated care delivered by hospitals” and reduce “utilization of expensive emergency room services,” the rating agency said.

“If the Supreme Court overturns the individual mandate, the private health insurance market would likely weaken under the unbalanced weight of strict provisions to cover all those who seek insurance without the counterbalancing benefit of a new, largely healthy, population segment that would be provided under the mandate,” Moody’s said.  “This scenario could become untenable for many insurers and hospitals, as costs would rise but revenues would not.”

There are additional challenges to non-profit hospitals in the ACA, specifically cuts in reimbursement rates for Medicare and reduction of funds paid to hospitals that serve a disproportionate share of Medicaid recipients, Moody’s said.  “Removing the mandate would make the negative features of reform loom much larger.”  Moody’s said the federal government could turn to a voucher system in which individuals would receive public help for them to buy health insurance, but the results for non-profits hospitals “would be more complex and hard to foresee.”

This is bad news because by a nearly five-to-one margin, hospitals expect the ACA to shrink their revenues. The result suggests that hospital executives are having second thoughts about the deal they made with the Obama administration in exchange for supporting the healthcare overhaul will help them weather the law’s financial repercussions.

According to a recent poll, 55 percent of hospitals and health systems anticipate falling revenues as a result of the law, while 12 percent expect an increase.  Twenty-eight percent were unsure of the law’s effect on revenue, indicating continued concern in the industry over the changes wrought by healthcare reform.  Hospital executives agreed to give up $155 billion in government payments over 10 years in a deal to cap costs borne by the industry as a result of the ACA.  The agreement followed a similar agreement with pharmaceutical companies and enabled the reform.  Two crucial hospital groups — the American Hospital Association and the Federation of American Hospitals — backed the law.  “Hospitals have acknowledged that significant healthcare savings can be achieved by improving efficiencies, realigning incentives to emphasize quality care instead of quantity of procedures,” Vice President Joe Biden said at the time.  “Today’s announcement, I believe, represents the essential role hospitals play in making reform a reality.”

“Hospital and health systems’ financial health has a direct impact on the benefits offered to their employees,” said Maureen Cotter, a senior principal at HighRoads, which took the poll.   “Even though 70 percent of those surveyed stated that they are committed to providing coverage in the long term, and no organizations have plans to discontinue coverage now or in the future, the coverage provided may take a new shape,” Cotter said.

There’s even more bad news in the fact that Howard Dean, a physician who formerly was chairman of the Democratic National Committee, a 2004 presidential candidate and governor of Vermont thinks that the high court will declare the mandate unconstitutional.  Dean believes that Justice Anthony Kennedy’s swing vote will side with the conservative justices when it comes to the individual mandate.  “I do believe that it’s likely the individual mandate will be declared unconstitutional.  Kennedy will probably side with the four right-wing justices. The question is going to be, is this individual mandate question, can that be considered separately from the rest of the bill?  And I think it will be.”

Dean also said the ACA can remain in place without the mandate.  “It’s definitely not necessary for the bill to succeed,” Dean said.  “It was mainly put in by academics who built the program for Governor Romney in Massachusetts, they had did it there, and for insurance companies who will benefit from extra customers.”

According to Dean, “The number of so-called free riders — people who will refuse to get insurance until they get sick — is going to be very, very small.”  Dean noted that the actual benefit of the individual mandate is “relatively small.  Everyone is a libertarian in America, whether Democratic, Republican or independent.  They don’t like to be told what to do by government.”

Aging Population Stresses Medicare

Tuesday, May 1st, 2012

The aging population as millions of baby boomers turn 65 and a slowly recovering economy are stretching the long-term finances of Social Security and Medicare.

Soaring healthcare costs have put Medicare in a worse position than Social Security.  But both programs are likely to become insolvent in the coming decades, unless Congress takes action.  In 2011, the trustees projected the Medicare hospital insurance fund would run out of money in 2024.  Social Security’s retirement fund was projected to dry up in 2038, while the SSDI (Social Security Disability Insurance) fund was projected to be empty by 2018. Revised projections provided a more ominous assessment of the disability program, which has seen growth in applications as more disabled workers lose jobs and apply for benefits.  The non-partisan Congressional Budget Office said the disability fund will run out of money in 2016.  Social Security’s trustees have asked Congress to strengthen the disability system by reallocating money from the retirement program.  There is precedent for this since lawmakers did the same thing in 1994.

If the Social Security and Medicare funds ever run out of money, both programs would collect only enough money in payroll taxes to pay partial benefits.  “I don’t know how to make it clear to the public, but in my mind the sirens are going off,” said Mary Johnson, policy analyst for the Senior Citizens League. “I wouldn’t say we’re under attack, but we are in a very, very serious position.”

Tax revenues have started to rebound but they are still below pre-recession levels.  Also, this year’s cost-of-living adjustment (COLA) was much higher than the trustees projected it would be.  Last spring, the trustee’s projected that Social Security recipients would get a benefit increase of 0.7 percent for this year, but higher-than-expected inflation pushed it to 3.6 percent.  That was good news for seniors but it drained more resources from the system.

The trustees overseeing the programs include Treasury Secretary Timothy Geithner, Labor Secretary Hilda Solis, Health and Human Services Secretary Kathleen Sebelius and Social Security Commissioner Michael Astrue.  More than 56 million retirees, disabled Americans, spouses and children collect Social Security.  The typical retirement benefit is $1,232 a month; the average benefit for disabled workers is $1,111.

According to Geithner, the trustees’ reports demonstrate a real need for Congress to make substantial changes to entitlement programs, although he continues to oppose Republican proposals to partially privatize Medicare.  “We will not support proposals that sow the seeds of their destruction in the name of reform, or that shift the cost of healthcare to seniors in order to sustain tax cuts for the most fortunate Americans,” Geithner said.  Last year, the trustees said that the Patient Protection and Affordable Care Act (ACA) would extend the life of the Medicare trust fund — a point that Geithner emphasized.  According to Kaiser Health News, “One of the most important things we can do right now to preserve Medicare is to implement the Affordable Care Act fully and effectively.” Geithner said.  “Still, more needs to be done.”

The positive news for Medicare is that the pace of cost increases has eased a bit. “The trends in Medicare are more modest than the cost increases we have seen in the private commercial sector,” said economist David Blitzer, who administers Standard & Poor’s index of healthcare costs.  “But both Medicare and the commercial sector face rising cost pressures no matter what, and they seem to come from virtually all directions.”

Medicare sets prices on take-it-or-leave-it terms for hospitals and doctors, who complain it doesn’t pay them adequately.  That causes them to charge privately insured patients at higher rates.  Some experts say the longer Congress waits to act on the two programs, the more difficult it could become to make effective changes.  If Congress acts quickly, it can phase in changes over time, perhaps sparing current retirees while giving those closing in on retirement time to prepare.  Unfortunately, Washington has had difficulty making tough political choices that involve raising taxes, cutting benefits or some combination of both.  Advocates for seniors oppose benefit cuts, noting that Social Security’s finances are secure for decades.

“No one is saying you don’t have to maintain it,” said Eric Kingson, co-chair of the Strengthen Social Security Campaign and professor of social work at Syracuse University.  “What I worry about is reducing the benefit structure or radically changing the system.”  Kingson believes that Social Security can be shored up by simply increasing the amount of wages subject to Social Security taxes — an idea that the majority of Republicans in Congress oppose.  Social Security is financed by a 6.2 percent tax on an individual’s first $110,100 in wages and is paid by employers and workers.  Congress temporarily reduced the tax on workers to 4.2 percent for 2011 and 2012; the program’s finances are being replace through increased government borrowing.  The Medicare tax rate is 1.45 percent on all wages, paid by employees and workers.

Is Medicare in Peril if the Supreme Court Rules Against the ACA

Monday, April 30th, 2012

Could there be collateral damage if the Supreme Court rules to overturn the Patient Protection and Affordable Care Act (ACA)? Some healthcare experts are warning of potential collateral damage if the Supreme Court strikes down the entire ACA: potential chaos for Medicare.  “The Affordable Care Act has become part and parcel of the Medicare system, encouraging providers to deliver better, more integrated, better coordinated care, at lower cost,” said Judy Feder, a public policy professor at Georgetown University and former Clinton administration health official.  “To all of a sudden eliminate that would be highly disruptive.”

Sara Rosenbaum, a professor of health law and policy at George Washington University, is more blunt: “We could find ourselves at kind of a grand stopping point for the entire healthcare system.”  It’s not only Democrats warning of potential problems.  Gail Wilensky, who ran Medicare and Medicaid during President George H.W. Bush’s administration, doesn’t think it’s likely that the court will strike down the entire health law.  But if it does, she warns, “it seems like it takes everything with it, including those aspects that are only very peripherally related to the expansion of coverage.”

One reason that so many experts are concerned is that the ACA altered the payment rates for nearly every type of healthcare professional who treats Medicare patients.  Every time Medicare sets a payment rate, it must cite a legal authority.  Since 2010, according to Rosenbaum, that legal authority has been the ACA.  If the law is ruled unconstitutional, she said, every one of those changes “doesn’t exist anymore because the law doesn’t exist.”  The result?  “You have agencies sitting on two years of policies that are up in smoke,” she said.  “Hospitals might not get paid.  Nursing homes might not get paid.  Doctors might not get paid.  Changes in coverage that have begun to take effect for the elderly, closing the donut hole might not happen.  We don’t know.”

Writing for the Huffington Post, Ethan Rome, Executive Director, Health Care for America Now, says that “The Supreme Court will uphold the ACA not only because it’s constitutional, but because to do otherwise would impose a massive judicial intervention in one of the economy’s most complex sectors and derail a train with millions of individuals and businesses on board.  If the conservative justices disregard decades of legal precedents and strike all or part of Obamacare, they would not merely be tearing down the most sweeping piece of social legislation since Medicare and Medicaid, they would be taking away substantial consumer protections and benefits from millions of America’s seniors, families and small businesses.  The court would have to take responsibility for dismantling the law piece by piece, a task as difficult as it is unconscionable.  The law is two years old.  Implementation is moving forward, and hundreds of complicated provisions are in effect, helping millions of Americans.  States, businesses, doctors, hospitals and insurance companies have undertaken major, costly changes in anticipation of the improved insurance marketplace developing right now.  The fact is that serious wreckage would result from a bad decision.  Attempting to unscramble this omelet would be a national nightmare.”

Politico’s J. Lester Feder offers this perspective. “If America is hoping a Supreme Court ruling will end the legal uncertainty hanging over the healthcare system once and for all, there’s a chance it could be sorely disappointed.  Most legal experts are hoping the Supreme Court will give a clear thumbs up or down to the healthcare law.  But they’re worried about the possibility that, if the court strikes down just part of the health law, it could outsource the job of figuring out precisely which provisions of the gargantuan law stay or go.  That could mean at least another year of legal proceedings before the country — and the states that have to build the health exchanges — really know the rules its health system will operate under.  And that doesn’t even include the wild card of the election.  The parties challenging the law attempted to head off this scenario by specifically asking the court to consider whether the individual mandate could be severed from the rest of the law.  But if the Supreme Court decided it lacked the capacity — or the desire — to settle questions of how dependent the various parts of the law are on the individual mandate, it could remand the case to the lower courts to work through the details, legal experts say.  Another outside possibility is that the Supreme Court could appoint a ‘special master’ to sift through it under the high court’s supervision, though special masters usually oversee complex settlements or disputes among states, not dismantling politically charged legislation.”

If the unthinkable happens and the Supreme Court does strike down President Barack Obama’s signature piece of legislation, employers and insurance companies — not the government — will be the primary drivers of change over the next decade.  They’ll borrow some ideas from Obamacare, and push harder to slash costs.  Business can’t and won’t take care of America’s 50 million uninsured.  Workers will pay more of their own medical costs as job coverage changes to plans with higher deductibles.  Another part of the equation will be tax-free accounts for routine medical expenses, to which employers can contribute.  Employees and their families will be steered to hospitals and doctors that can prove to insurers and employers that they deliver quality care.  These networks of medical providers would earn part of their fees for keeping patients healthy, similar to the accountable care organizations in the ACA.

CMS Chooses 27 Medicare Shared Savings Program ACOs

Wednesday, April 25th, 2012

As the nation waits for the Supreme Court to rule on the Patient Protection and Affordable Care Act (ACA), a key provision that will transform the delivery of healthcare is moving ahead.  According to Kaiser Health News, the Obama administration announced that 27 health systems have been designated as Accountable Care Organizations (ACOs) in Medicare’s Shared Savings Program, which offers financial incentives for physicians, hospitals and other healthcare providers to create more integrated healthcare delivery.  The new ACOs will serve an estimated 375,000 individuals in 18 states.

ACO supporters say they improve care for Medicare beneficiaries and slow rising costs by altering the incentives that affect how physicians and hospitals operate.  Experts cite as models such respected health systems as the Mayo Clinic and the Geisinger Health System of Pennsylvania.  Rather than being paid for each service, ACOs reward providers that manage chronic disease and meet certain quality standards, including reducing hospital admissions and emergency room visits.  If they improve care while holding down costs, the systems can share in the savings.

CMS is reviewing another 150 applications seeking to enter the program, suggesting that the Shared Savings Program is succeeding.  The program is “off to a very phenomenal start,” said Jonathan Blum, a CMS deputy administrator.  “We are on track to fundamentally transform the (Medicare) fee-for-service program.”

Late last year, the Department of Health and Human Services (HHS) chose 32 organizations to participate in an advanced version of the Medicare program.  These “pioneers” have made significant progress in developing the ACO model, with many already largely functioning as ACOs.  During their first two years the pioneers will assume more risk, but with a greater potential reward.  Although hospitals were expected to lead the ACO field, Blum noted that the majority of ACOs are physician-led organizations.  He also said many of the organizations are working with private health insurers to serve patients not in the Medicare program.

Chas Roades, chief research officer at the Advisory Board Company in Washington, D.C., warned that as the ACOS take off and “people actually start to deliver care in a different way, it’s messy and complicated.  There will be successes and failures, and it may go slower than policy-makers would like it to.”  According to Roades, it’s important that CMS create some way for the pioneer ACOs to share their data and best practices.  “It’s a slow ramp but everyone will be watching very closely to see how these early ACOs succeed,” Roades said.

Under the shared savings program, ACOs must meet 33 quality measures relating to care coordination and patient safety, appropriate preventive health services, improved care for at-risk populations and the patient experience of care – while reducing the costs of care.  ACOs that meet the standards will be eligible to share in the program’s savings.

“We are encouraged by this strong start and confident that by the end of this year, we will have a robust program in place, benefitting millions of seniors and people with disabilities across the country,” said CMS Acting Administrator Marilyn Tavenner.

Regarding the anticipated Supreme Court ruling, Emily Brower, an executive director with Atrius Health, operator of a pioneer ACO in Massachusetts, said “It’s not changing anything for us.  This is a model of care we’ve been trying to evolve into since before the pioneer program existed.  We’ll continue making investments, and if the law is overturned, we’ll be asking where the return on investment is for us, if not in shared savings.”

Writing for the e-Care Management blog, Vince Kuraitis is unimpressed.  “I had been anticipating this announcement as a defining moment for Medicare’s thrust into accountable care.  My expectations had been that we would see either:  Boom — a big splash of new Medicare shared savings ACOs announced, including big name hospitals and medical groups that were starting large scale ACOs, perhaps with hundreds of thousands of patients.  Bust — no one showed up at the party.  Providers would have concluded that Medicare ACOs were too risky, bureaucratic, and high effort.  This isn’t the defining moment I thought it would be.  But that defining moment might be just around the corner.  Medicare’s announcement included a mention that they have 150 more Shared Savings ACO applications waiting in the wings.  Is the boom around the corner?”

Medicare to Tie Physician Pay to Quality, Cost

Tuesday, April 24th, 2012

Approximately 20,000 physicians in four Midwest states recently had a sneak peak at their financial future. According to Kaiser Health News, they were e-mailed links to Medicare reports detailing the amount their patients cost on average as well as the quality of the care they provided.  Additionally, the reports showed how Medicare spending on each doctor’s patients compared to their peers in Kansas, Iowa, Missouri and Nebraska.

The so-called “resource use” reports, which Medicare eventually plans to distribute to doctors nationally, are one of the most visible phases of the government’s efforts to enact a complex and delicate although little-known proviso of the Patient Protection and Affordable Care Act (ACA): paying more to doctors who provide quality care at lower cost to Medicare, and cutting payments to physicians who add to Medicare’s costs without improved results.

Requiring providers to pay closer attention to cost and quality is seen as crucial if the nation is to succeed at controlling its healthcare spending — currently more than $2.5 trillion a year.  It’s also vital to Medicare’s solvency.  Efforts are already underway to transform the way Medicare pays hospitals, physicians and other providers who agree to work together in accountable care organizations.  This fall, Medicare – which covers 47 million seniors and disabled people — will fine-tune hospital reimbursements based on quality of care.  It plans to take cost into account as early as next year.

But applying these same precepts to doctors is much more difficult, experts agree. Doctors see far fewer patients than do hospitals, so making statistically accurate assessments of doctors’ care is much harder. Comparing specialists is tricky, since some focus on particular kinds of patients that tend to be more costly.  Properly assessing how a physician impacts costs must include not just the specific services provided, but also care other providers may give.

“It may be the most difficult measurement challenge in the whole world of value-based purchasing,” said Dr. Donald Berwick, the former administrator of the federal Centers for Medicare and Medicaid Services (CMS).  “We do have to be cautious in this case.  It could lead to levels of gaming and misunderstanding and incorrect signals to physicians that might not be best for everyone.”

Dr. Michael Kitchell, a neurologist and chairman of the McFarland Clinic in Ames, IA, predicted that the Medicare reports “will be a huge surprise to almost every physician.”  That’s because the calculations of how much those doctors’ patients cost Medicare not only include the services of the individual doctor but of all the physicians who provided any treatment to the patient.  Kitchell said his own patients typically saw 13 other physicians.  “You’re a victim or a beneficiary of your medical neighborhood,” Kitchell said.  “If the primary-care doctors are doing the preventative screening tests, you’ll get credit for that, but if you’re in a community where the community doctors are doing a poor job, you’re going to look bad.”

Medicare officials are attempting to improve the way they measure physicians as they follow the ACA’s directive to phase in the new payment system, called a Physician Value-Based Payment Modifier, which is scheduled to begin in 2015.  At first, it will apply solely to physician groups and some specialists selected by the government; by 2017, the payment change is intended to apply to most if not all doctors.  The assessment “is a very important change we’re putting into place, one where we’re going to need a lot of feedback and deliberation,” said Jonathan Blum, CMS’s deputy administrator. “We’re not blind to the challenges that are coming toward us.”  Although the program is still being worked out, it will become reality for many doctors in January, because CMS wants to base its 2015 bonuses or penalties on a doctor’s patients’ outcomes during 2013.

Private insurers may decide to use a formula similar to Medicare’s, said Paul Ginsburg, president of the Center for Studying Health System Change.  Medicare’s ultimate method of judging and paying physicians could become “a valuable asset for private insurers, with a tool that will be somewhat bulletproof, that physicians won’t attack because they’ve been part of the process of developing them.”

Getting physician support might not be a peace of cake, said Margaret O’Kane, president of the National Committee for Quality Assurance.  “Doctors are a very powerful political segment,” she said. Additionally, “Patients are not behind this agenda.  The public is very scared about managing costs.”

Dana Gelb Safran, who measures quality for Blue Cross Blue Shield of Massachusetts, doubts it will be possible for the government to judge individual doctors.  “There really are very few measures that we can reliably evaluate on the individual doctor level,” she said.  “When they move forward with the value-based modifier, there is going to have to be a way to allow physicians to identify other physicians with whom they say they practice and who they say they share clinical risk for performance.”

Sebelius Asks Civil Right Activists to Defend the ACA

Monday, April 23rd, 2012

Secretary of Health and Human Services Kathleen Sebelius has asked civil rights activists to help defend the Patient Protection and Affordable Care Act (ACA), noting that the healthcare law faces an “enemy” whose goal is to set American health policy back half a century.  The remarks come two months before the Supreme Court is expected to issue a ruling that could strike down the law.

Sebelius described the ACA as an crucial weapon against racial disparities that have long meant higher infant mortality rates, shorter life spans and limited access to medical services for minorities.  “The enemy is at the door and we know that they would like to dismantle these initiatives,” Sebelius told the annual convention of the National Action Network, a civil rights group led by the Reverend Al Sharpton“Healthcare inequalities have been one of the most persistent forms of injustice,” she said. “Now is not the time to turn back.”

Civil rights advocates and the minorities they often represent form a key segment of the Democratic base, especially if the Supreme Court strikes down Obama’s signature domestic policy achievement.  Research shows that low-income Americans, including many minorities, have significantly less access to medical care and suffer higher rates of childhood illnesses, hypertension, heart disease, AIDS and other diseases.

Designed to bring healthcare coverage to more than 30 million uninsured Americans, the ACA has become a pet target for Republicans mainly because of an `individual mandate that requires most Americans to have healthcare insurance by 2014.  “We’ve got folks who are committed to undoing…the important initiatives that we’ve made in the last few years,” Sebelius said.  “Frankly, they want to go back and undo Medicare and Medicaid from the mid-1960s.  They want to roll us back years and years.”

The House of Representatives voted recently to partially privatize Medicare and convert Medicaid to a block-grant program for states, although the legislation is likely to be stalled in the Senate.  “I’m here to ask you to help,” Sebelius said.  “If we can begin to close the disparities in health, we begin to close disparities in other areas, too.”

Sebelius asked religious leaders, health advocates and other minority leaders to help the Obama administration educate the public about the healthcare law’s many benefits. The law, which becomes fully effective on January 1, 2014, has already benefited minorities by extending private insurance coverage to young adults, providing free preventive services for those with insurance and prohibiting coverage denials for children with pre-existing conditions.

CMS Chooses 27 Medicare Shared Savings Program ACOs

Wednesday, April 18th, 2012

As the nation waits for the Supreme Court to rule on the Patient Protection and Affordable Care Act (ACA), a key provision that will transform the delivery of healthcare is moving ahead.  According to Kaiser Health News, the Obama administration announced that 27 health systems have been designated as Accountable Care Organizations (ACOs) in Medicare’s Shared Savings Program, which offers financial incentives for physicians, hospitals and other healthcare providers to create more integrated healthcare delivery.  The new ACOs will serve an estimated 375,000 individuals in 18 states.

ACO supporters say they improve care for Medicare beneficiaries and slow rising costs by altering the incentives that affect how physicians and hospitals operate.  Experts cite as models such respected health systems as the Mayo Clinic and the Geisinger Health System of Pennsylvania.  Rather than being paid for each service, ACOs reward providers that manage chronic disease and meet certain quality standards, including reducing hospital admissions and emergency room visits.  If they improve care while holding down costs, the systems can share in the savings.

CMS is reviewing another 150 applications seeking to enter the program, suggesting that the Shared Savings Program is succeeding.  The program is “off to a very phenomenal start,” said Jonathan Blum, a CMS deputy administrator.  “We are on track to fundamentally transform the (Medicare) fee-for-service program.”

Late last year, the Department of Health and Human Services (HHS) chose 32 organizations to participate in an advanced version of the Medicare program.  These “pioneers” have made significant progress in developing the ACO model, with many already largely functioning as ACOs.  During their first two years the pioneers will assume more risk, but with a greater potential reward.  Although hospitals were expected to lead the ACO field, Blum noted that the majority of ACOs are physician-led organizations.  He also said many of the organizations are working with private health insurers to serve patients not in the Medicare program.

Chas Roades, chief research officer at the Advisory Board Company in Washington, D.C., warned that as the ACOS take off and “people actually start to deliver care in a different way, it’s messy and complicated.  There will be successes and failures, and it may go slower than policy-makers would like it to.”  According to Roades, it’s important that CMS create some way for the pioneer ACOs to share their data and best practices.  “It’s a slow ramp but everyone will be watching very closely to see how these early ACOs succeed,” Roades said.

Under the shared savings program, ACOs must meet 33 quality measures relating to care coordination and patient safety, appropriate preventive health services, improved care for at-risk populations and the patient experience of care – while reducing the costs of care.  ACOs that meet the standards will be eligible to share in the program’s savings.

“We are encouraged by this strong start and confident that by the end of this year, we will have a robust program in place, benefitting millions of seniors and people with disabilities across the country,” said CMS Acting Administrator Marilyn Tavenner.

Regarding the anticipated Supreme Court ruling, Emily Brower, an executive director with Atrius Health, operator of a pioneer ACO in Massachusetts, said “It’s not changing anything for us.  This is a model of care we’ve been trying to evolve into since before the pioneer program existed.  We’ll continue making investments, and if the law is overturned, we’ll be asking where the return on investment is for us, if not in shared savings.”

Writing for the e-Care Management blog, Vince Kuraitis is unimpressed.  “I had been anticipating this announcement as a defining moment for Medicare’s thrust into accountable care.  My expectations had been that we would see either:  Boom — a big splash of new Medicare shared savings ACOs announced, including big name hospitals and medical groups that were starting large scale ACOs, perhaps with hundreds of thousands of patients.  Bust — no one showed up at the party.  Providers would have concluded that Medicare ACOs were too risky, bureaucratic, and high effort.  This isn’t the defining moment I thought it would be.  But that defining moment might be just around the corner.  Medicare’s announcement included a mention that they have 150 more Shared Savings ACO applications waiting in the wings.  Is the boom around the corner?”

Physician Groups Go After Unnecessary Medical Tests

Tuesday, April 17th, 2012

America’s physicians are embarking on an initiative to cut healthcare costs by ordering fewer unnecessary tests and treatments for their patients.  Nine prominent physician groups released lists of 45 common procedures they say are often unnecessary and may even harm patients. According to Kaiser Health News, “The move represents a high-profile effort by physicians to help reduce the extraordinary amount of unnecessary treatment, said to account for as much as a third of the $2.6 trillion Americans spend on healthcare each year.  Each of the societies, representing both primary care doctors and specialists, picked five procedures that medical evidence shows have little or no value for certain conditions, and which they say should be questioned by patients and their doctors.  The list includes such common practices as routine electrocardiograms for patients at low risk for heart disease, and antibiotics for mild sinus infections.”

Dr. Donald Berwick, formerly the Medicare administrator, called the campaign “a game changer.  This could be a turning point if it’s approached with energy,” Berwick said.  “Here you have scientifically grounded guidance from a number of major specialty societies addressing a very important problem, which is the overuse of ineffective care.”

“We need to use this opportunity to raise awareness that sometimes overtreatment or testing can be harmful,” said Glen Stream, president of the American Academy of Family Physicians, one of the nine participating physician groups.  The Choosing Wisely campaign comes amid efforts – some called for in the Patient Protection and Affordable Care Act (ACA) – to compare the effectiveness of treatments and to change payment incentives to physicians and hospitals to reward quality and penalize inefficiency.  But efforts to slow medical spending growth tend to be political, giving rise to fears of healthcare rationing or death panels.  “Anytime you are recommending against a test or treatment, people wonder ‘is it for some economic interest?’” Stream noted.

Among the nine groups backing the initiative are the American College of Cardiology and the American Society of Clinical Oncology.  The effort is being spearheaded by the American Board of Internal Medicine Foundation (ABIM). Together, the participants represent nearly 375,000 physicians.

Writing in Time, Alice Park says that “Each of the nine professional groups has come up with five tests or procedures that it believes doctors and patients overuse routinely. The American Gastroenterological Association, for example, is recommending against repeat colonoscopies within 10 years of a normal result from a first colonoscopy for patients with no family history of colon cancer.  The American College of Physicians is advising against using MRI to image patients any time they complain of generalized low back pain, and heart experts say doctors should stop using stress echocardiograms in routine check-ups for patients who don’t have chest pain or other risk factors for heart disease or heart attack.”

One of the initiative’s goals is to make people “feel empowered to go to their doctor and say, ‘Do I really need this test?’” said Christine Cassel, president of the ABIM and the group’s foundation. John Santa, an internist and the director of the Health Ratings Center for Consumer Reports, said, “I think it’s courageous of cardiologists, internists and family physicians to suggest reducing services that they know generate income for some of their members.  I’m sure some of their members won’t be happy.”

According to Dr. Steven Weinberger, CEO of the American College of Physicians, “Most of us feel something like $750 billion or so could be eliminated from the system that we spend on healthcare.”  Weinberger said that unneeded diagnostic tests almost certainly account for $250 billion annually.  “I talk about this a fair amount around the country, and invariably physicians come up to me and recount their own anecdotes about overuse and misuse of care.”