Medicare and Payment Innovation

The Disease Management Care Blog is very much looking forward to participating in a closing afternoon panel discussion in Washington DC this July 20. It'll be at the 6th Annual Leadership Summit on Medicare. The DMCB will be fortunate to be sharing the dais with Stuart Guterman of the Commonwealth Fund's Program on Payment System Reform and Len Nichols of George Mason University's Center for Health Policy Research and Ethics. By the way, the DMCB is also pleased to recognize both institutions' blogs (here and here) presence among the blogmos.

Is the DMCB anxious about being on a podium with such obviously smart speakers? Absolutely. Especially when the topic is "payment innovation in Medicare," including the coming pilots and demos, the mechanics of state and federal partnering, what's working and what's not and, last but not least, what the future holds.

To prepare itself, the DMCB has developed a kinder and gentler version of the sometimes obnoxious "talking points memo." It'll probably print out a copy of this blog and refer to it during the proceedings.

1. Does Quality Always Mean Lower Costs? Underlying much of D.C.'s interest in "innovation" is the assumption that clinical and organizational quality and efficiency inevitably lead to reduced claims expense. Unfortunately, while the notions certainly make intuitive sense, proof in many corners of the healthcare system has remained remarkably elusive. That's because a) measuring savings is a difficult exercise in measuring what doesn't happen in a "statistically noisy" environment of rising costs and b) any savings that are achieved may be exceeded by the direct, indirect and uncategorized costs of delivering the intervention in the first place. Reconciling this may be out of reach of even the Center for Medicare and Medicaid Innovation.

2. Can You Count on the Feds? Medicare has had more than its fair share of fickle behavior when it comes to partnering. Not only have the physicians been whipsawed, but witness what happened to the insurance community with Medicare+Choice in '93 and Medicare Advantage in 2010 That makes two constituencies that have been burned by the Feds. While these may be exceptions, consider the details Medicare's participation in the multi-payor medical home pilot. This may have implications for the prognosis of federal, state and commercial payor partnerships.

3. Is the Road to Being Covered by Medicare Lined with Demos? Many of the high visibility innovations out there, like the Patient Centered Medical Home (PCMH) and Accountable Care Organizations (ACOs) remain largely unproven outside of government sponsored insurance settings or integrated delivery systems. That's why the Affordable Care Act relegated them to pilots and demonstrations in the first place. While the past performance is no guarantee of future disappointment, Medicare's ability to execute on demos in general have not fared well. In fact, the experience of the disease management industry's star-crossed Medicare Health Support should give pause to the PCMH's and ACO's fans. That may be doubly true since, as pointed out here by one of the DMCB's fellow speakers, there is widespread bipartisan consensus that CMS is generally underfunded, which could hamper CMS' ability to manage the countless details of actually running a multi-site demo.

4. What Do Physicians in the Trenches Think? It is hard to underestimate mainstream physicians' disappointment over the Sustainable Growth Rate's (SGR's) impact on the Medicare fee schedule and the inaction on meaningful tort reform. The DMCB isn't fooled by organized medicine's political support for health reform, which has only obscured the distrust and cynicism in many grassroots doctor's offices. By the way, physicians have always been suspicious of their local hospitals also, so it remains to be seen how much they'll cooperate with the creation of ACOs. Accordingly, the DMCB rates physician discontent as the biggest threat to the future of Medicare's efforts at innovation.

There are two big suggestions that help address all of these challenges. The DMCB didn't think of them first, but that's not to stop it from bringing them up at the July 20 Summit. Those suggestions, my co-speakers' reactions and what the audience has to say will be discussed in greater detail in the next posting.