Changing Medicare to Improve Care, Cut Costs

MedicaidIf you feel like the more health-care providers you have, the less they talk to each other, you’re not alone.

But that may soon change for some patients. A part of the health-reform law that’s starting to take shape aims to improve care coordination for Medicare enrollees while reducing waste and duplication. Some commercial insurers also are taking steps to help patients under age 65 get more effective care, experts say, as more people embrace the twin goals of improving health care quality and cutting costs.

If you’re on Medicare, your health care providers soon may work harder to coordinate your care across disparate settings such as doctor’s offices, hospitals and long-term-care facilities. That’s because starting in January 2012, doctors and hospitals that see at least 5,000 Medicare beneficiaries and hit health care quality goals can earn up to 60 percent of the savings generated, according to regulations the Obama administration proposed on March 31.

“It is probably the most important quality challenge facing the Medicare program: fragmented and uncoordinated care,” said Dr. Elliott Fisher, director of population health and policy at the Dartmouth Institute for Health Policy and Clinical Practice in Lebanon, N.H.

“Any one of us caring for an elderly relative knows how hard it is to keep track of information,” he said. “You show up in the medical office, and they have no information about your mother or father.”

By banding together in what’s called accountable care organizations, doctors and hospitals can participate in the Medicare shared savings program, which will give them a chance to earn a portion of what they save the overall system.

They can do this in one of two ways: by signing up for a model that gives them a chance to recoup savings only for the first two years, or by immediately entering the double-sided track that will eventually be the universal model, which has them share in both gains and losses. Savings from the program could reach as much as $960 million over three years, according to the U.S. Department of Health & Human Services.

Doctors and hospitals that choose to become ACOs and participate in the program will have to alert their patients and explain what that means, says Reggie Hill, partner at Waller Lansden Dortch and Davis, a health care law firm in Nashville, Tenn. The proposed rules don’t restrict patient choice, he said. “The patient has the right to choose another provider.”

Patients also can opt out of sharing their health data among other providers in the accountable care organization, but that may defeat one of its main purposes, Hill said. “One of the goals of coordinating care in an ACO is that information will be shared and it presumably will be shared for the right reason: to better coordinate care.”

To claim a piece of the savings, ACOs will have to meet quality standards in five major areas: patient and caregiver experience, coordination of care, patient safety, preventive health and care of at-risk and frail elderly people. Proposed rules for the Medicare shared savings plan are open for public comment until June 6, and the Center for Medicare & Medicaid Services will issue a final rule later this year.

Health care providers who organize into ACOs will have an incentive to make sure patients are better educated about how to take care of themselves, Hill said.

“The patient should notice a greater amount of contact, particularly chronic-disease patients where follow-up and following the treatment plans is so important.”

Some people may think accountable care organizations sound like what private insurance companies tried to do with managed care during the 1990s, but ACOs are different, he said.

“It does have a cost-savings and cost-management component to it, but the requirement to meet quality measurements to share in any payments is a new feature that the old managed-care model of the ’90s did not have.”

How doctors communicate with patients will be critical to the success of the program, said Stuart Guterman, a vice president at the Commonwealth Fund, a private foundation in New York.

“The message needs to get through that ACOs are more about accountable care than organizations,” he said during a recent conference call with reporters. “The business of ACOs is accountable care.”

Accountable care involves moving from a payment system that rewards volume of services to one that rewards value for the money.

Integrated delivery systems often hailed for their quality of care, such as Kaiser Permanente, Mayo Clinic and Cleveland Clinic, may have an easier time joining the Medicare shared savings program if they choose to do so because many already have ACO-like features in place, said Dr. Jay Crosson, chairman of the Council of Accountable Physician Practices, a policy group based in Oakland, Calif. An estimated 10 percent of the U.S. population receives care from integrated groups such as these.

But even within the Council, health systems are different from each other, he said. For instance, some include hospitals while others don’t.

Accountable care involves changing the way medicine is practiced to think of patients’ health as a group rather than as individuals, said Dr. David Bronson, president of Cleveland Clinic Regional Hospitals. The Cleveland Clinic has 5 million patients across Ohio on the same information system, he said, which cuts down on the potential for needless duplication of tests done because a physician can’t easily locate a patient’s record.

Having electronic tools to monitor patients’ recent lab work and who’s due for routine care, for example, can help as well. “It’s saying, ‘How’s my group doing? Who’s not doing well? Let’s get them back in and help them.’ “

With physicians on salary, it reduces the financial incentive for them to order more tests or procedures than might be necessary. “They don’t get paid for doing more tests or more surgeries and they don’t get paid less for doing less,” Bronson said. “They’re salaried and get an annual performance evaluation that helps determine their compensation and career development.”

Medicare shared savings may convince doctors and hospitals to do what is otherwise not in their financial interest.

“In the long run, you want to avoid unnecessary hospitalizations and re-hospitalizations. That’s where the money is,” Bronson said. “The shared savings approach is a good one that means doctors and hospitals will be rewarded for keeping patients out of the hospital and everyone gets rewarded for bending the cost curve.”

Medicare, which covers nearly 47 million older and disabled people, is the 800-pound gorilla in the debate over how to reduce the national debt as lawmakers try to forge a deal. Last year it accounted for about 15 percent of the federal budget, and it’s expected to reach more than 17 percent by 2020, according to the Kaiser Family Foundation. Cost pressures are significant as the population ages and health costs continue to rise. By 2030, Medicare is expected to cover 80 million beneficiaries, double the number it covered in 2000.

Medicare spending varies widely across the country, Fisher said.

“If major cuts in payment levels go through, more physicians (and hospitals) will think shared savings looks like a good deal,” he said. “We already know that fee levels in Medicare are declining relative to overall costs. The more they decline, the more attractive it is to be in a payment system where you can capture a share of the savings you achieve by improving care.”

Of course, ACOs don’t address every problem in the health system. A big one: The looming shortage of primary-care doctors, such as family doctors and pediatricians, as fewer medical students choose to pursue those tracks relative to the higher-paid, procedure-heavy subspecialties such as cardiology, anesthesiology and other fields.

“We’re going to see it in a few years where it’s very difficult to find a general internist,” Crosson said. “If there’s nobody to hire, we can’t do anything about that. The solution to that still remains obscure.”

Source: McClatchy-Tribune Information Services.