Medicare's Comprehensive Primary Care Initiative - A Two Year Report

After all the buzz (for example) around the coming launch of CMS' Comprehensive Primary Care "Plus" program,  the New England Journal of Medicine (or NEJM) just published a "special article" on the original Comprehensive Primary Care (CPC) initiative.

This is important if you think CMS' approach to supporting primary care is the fix for what ails the U.S. health care system.

Population Health Blog readers may recall that two years ago, CMS launched CPC. This is a still ongoing four-year multi-payer study to determine whether primary care that is "turbocharged" with medical home-style capabilities (see here, here and here - see page 8) would increase quality and lower health care costs. 

The term "multi-payer" is important, because CMS recognized that clinics struggled with providing medical home care to some, but not all, patients on the basis of their insurance.  Better to have one standard of care to all patients.

The NEJM article is an analysis of CPC's results after two years. 

To summarize how CPC was set up, 502 clinics (from 978 applicants) across 8 states participated along with a total of 39 other insurers.  In addition to the usual fee schedules, the Medicare and the other insurers paid a per patient severity-based "care management fee" that, on average, ranged from $8 to $40 per beneficiary per month (PBPM). Practices were also promised an additional bonus if, after two years, they reduced health care costs (i.e., shared savings) and improved various quality measures and performed well in surveys about the patients' experience of care.

These CPC practices' outcomes were compared to a propensity matched group of non-participating practices with a similar electronic health record (EHR) infrastructure that cared for a set of patients with similar levels of disease and baseline costs. 30% of these practices had applied but were not accepted in the initiative. The total number of comparison practices was 908.

Results?  Not good.

Aft the end of two years, there was no statistically (p > .05) significant difference in the growth of health care costs between the CPC and control sites.  This was true whether just claims costs were examined (a negligible difference of $11 per patient per month favoring the CPC sites), or whether claims costs plus the additional fees were examined (a difference of $7 favoring the comparison sites).

When patient costs were examined by the burden of disease, there was no indication that more costly patients achieved any savings. 

CPC sites had a statistically significant reduction in outpatient office visits, but not in hospitalizations.

While the difference in claims expense failed to be statistically significant, the total additional fees collected by the participating sites amounted to a financially significant $389,000. This represented a 15% increase in their income. 

Was quality of care improved?

Patients with diabetes and a high burden of illness were more 3% more (p<.05) likely to receive the recommended follow-up measures to manage their disease. Otherwise, "the initiative did not have significant effects on the processes used as measures of the quality of care for the full sample."

Patient experience of care?

While surveys showed small increases in patient support, "there were no significant effects on other composite measures: ability of patients to obtain timely appointments, care, and information; how well providers communicate with patients; provider’s knowledge of care patient received from other providers; and overall rating of providers by patients."

Yikes. Ouch. Egads.

The authors correctly point out that CPC is a four year program and that it still may be too early to see the impact of the medical home turbocharging.  That was pointed out in the negative one year evaluation.  Maybe something will turn up at three or four years.

In addition, CMS has a lot of other value-based initiatives underway, which may have biased the results.  There may be a "ceiling effect" among the participating sites as well as the control sites, which were already working to reduce (for example) rehospitalizations or pursue the fee schedule modifiers.

It's also important to note that the impact on the other insurers' costs and patient quality was not reported.  It's possible that they saw a benefit.

The PHB's take?

1.  Many care management programs achieve claims reduction with savings (for example) within one to two years.  If CPC hasn't succeeded by now, it probably won't.  And if the just-announced CPC Plus is modelled after this, it's hard to see how that program will turn out any differently.

2. It is possible that, within all the statistical noise, there were some primary care sites with particularly robust approaches to care that did bend the cost curve.  CMS should seek these sites out and find out more about their secret sauce.  More on that in a future post.

2.  If CPC's approach to care is ultimately shown to not bend the curve, what's the problem? 

The PHB continues to believe that one size doesn't fit all and not all patients benefit from care management. Many patients, even those with chronic conditions are quite stable and need minimum attention; some patients are so sick that no intervention will keep them out of emergency rooms and hospitals. As pointed out here, as more and more patients are enrolled in care management, the return on investment can paradoxically go down. Better to focus on patients who are not only at risk, but have "impactable" condition profiles.

In addition, CPC is based on a 5 year-old model of care. Things have changed since then: modern population health brings many more resources to the table.  That not only includes in-depth analytics support (for example, to define those patients who are at greatest risk) but mHealth. For example, there is one innovative company (the PHB's Shameless Commerce Dept. over on the right side of your screen) that provides recently discharged patients with an app-enabled handheld configured to provide close follow-up.  And so on.

3. It may be that care management works best in a managed care setting.  CPC is a study of classic fee-fore-service Medicare beneficiaries with access to any participating Medicare provider. In Medicare managed care, the insurers and their providers have an even larger incentive to maximize quality and lower cost.  If that's the case, CMS - despite their commitment to innovation - may want to get out of the care management business, because they just don't know how to do it.

Of Rising Risk and ACO Success in the Medicare Shared Savings Program: Community Health Network and Pharos Innovations

To each according to their need, from each according to their ability.

While that famous (and paraphrased) adage was originally used to attack capitalism, it's also not a bad way to think about effective care management programs.  Ill persons have varying needs, and care providers have varying resources.  In a resource-constrained environment, the health system that matches the right needs with the right resources will win.

A case in point may be one of the few Medicare Shared Savings Program (MSSP) ACOs that met CMS' savings threshold.

"Community Health Network" is a joint venture between HealthEast Care System and Entira Family Clinics that serves Medicare beneficiaries in Minnesota's Twin Cities.  According to this Pharos Innovations case study (which can be found here), the organization analyzed their population's past utilization and future risk and realized that a relatively small group of beneficiaries were high need.

High need was defined as those individuals with "rising risk" or what the Population Health Blog has termed the "sweet middle." These are individuals who are not only burdened by chronic medical conditions (such as heart failure), but have a constellation of issues (such as a recent discharge from a hospital) that also can be mitigated or impacted.

Once these patients were identified, Pharos Innovations provided the "transition coaches" and "engagement specialists" for the high need/rising risk/sweet middle patients who were most likely to have an admission and/or readmission.

By pinpointing state-of-the-art heart failure treatment protocols, care management, self-care coaching and discharge-care interventions, avoidable admissions and avoidable readmissions - compared to a control group of patients - dropped in significant manner. That was enough to skew the ACO's overall admission and readmission costs downward and reach CMS' savings threshold.

Population Health Blog lessons:

1) If a healthcare organization is willing to take on the financial consequences of health insurance risk, it will have to array its covered population's risks from high to low, and deploy interventions that can address the needs of patients at high - yet modifiable - risk.

In other words, within any high risk subpopulation are sub-populations with specific health care needs that can be addressed with smart population-based care management interventions. 

2) The PHB looks forward to these data appearing in the peer-reviewed literature.  In the meantime, kudos to Pharos Innovations for achieving credible outcomes based on a comparison to a valid control group.

3) Patients who don't have to go into a hospital are better off for it.  Despite Karl Marx's antipathy, aligned economic incentives can be win-win for everyone.  Community Health Network deserves to be financially rewarded by CMS.

4) There is a good reason to believe that Community Health was destined to do well versus the other MSSP participants. As pointed out here, physician leadership may be one ingredient to the MSSP ACO secret sauce. According to the case study linked above, Community Health Network expended considerable resources to convince their physicians that this approach was a good idea.  What's more, their board is majority physician controlled.  In addition, Pharos Innovations was started by a doc and they have additional physician representation on their board.

The Majority of Medicare ACO Participants Appear to Have Lost Money in 2014

There's no other way to put it.

Like many wonks, the Population Health Blog glommed onto this recent CMS report report on the 2014 performance of the Pioneer and Medicare Shared Savings Accountable Care Organizations (ACOs). 

While there's some quality reporting data, the PHB decided to focus on the economics.

It ain't pretty.

Briefly, as the PHB understands it:

The 20 Pioneer and 333 Medicare Shared Savings Accountable Care Organizations generated a total of $411 million in savings.

Among the Pioneer participants:

15 out of 20 generated savings.  Only 11 of the 15 earned enough savings to trigger a payment from CMS that totaled $82 million.  The PHB calculates that's an average payment of approximately $7.5 million for each ACO. 

Three of the Pioneer ACOs had to provide clawbacks to CMS of $9 million, or an average $3 million each.

Of the 333 Medicare Shared Savings participants:

92 out of 333 saved $806 million in health care costs.  They received checks totaling $341 million.  The PHB calculates that's a payment of $3.7 million per ACO. 

Another 89 of the Medicare Shared Savings reduced costs, but not enough to trigger a payment from CMS.  That also means that the rest of these ACOs didn't even reduce costs.

The PHB's conclusions:

ACOs in the Pioneer program have about a 50% chance of getting some money back.  Assuming that there are from $2 million to $7 million per year in program support costs - in addition to the all of the foregone billable services - it's not clear to the PHB that the business model is sustainable (for example) for many of the Pioneer participants.  To add downside-risk insult to injury, there's a 15% chance a Pioneer ACO would have to pay Medicare.

ACOs in the Shared Savings program have a 75% chance that they won't be able to generate enough savings to cover the lost of income from fewer billable service or their program costs.

That's a majority of the participating ACOs.

Admittedly, there are several advantages to ACOs.  They 1) are an answer to the threat of rising health care costs, 2) are a laboratory for bundled payments, 3) promote care coordination and 4) are linked to medical homes.

But that's all for naught if the majority of the program participants are losing money in a massive exercise in risk transfer involving hundreds of millions of Medicare dollars.

This is health reform?

++++++++++++++++++++++

Coda: The PHB can't help noting that the title of the CMS report is "Medicare ACOs Provide Improved Care While Slowing Cost Growth in 2014."   That may be technically true, but that title is more about spin than about the science. The findings haven't been submitted to the scrutiny of peer-review, and until it is, the PHB won't really know what to believe.

Health Care Cost Inflation Returns

True, that....

Call it the return to the old normal.

With the slow recovery of the U.S. economy, the advent of some blockbuster drugs and the entry of more than 8 million newly-insured persons, healthcare cost inflation is ticking back up. Writing in Health Affairs, CMS' actuaries are projecting a 5.8% year-over-year rate of inflation that reminds them of the years prior to the Great Recession. This rate is projected to grow faster than the Gross Domestic Product (GDP), which means that by 2024, the U.S. will be devoting 19.6% of its economy to healthcare.

Some eye-catching observations:

1) If it weren't for consumer cost-sharing, the inflation rate would be even higher;

2) Drug treatment for a single disease - Hepatitis C -  is driving prescription drug costs "sharply higher" and adding to the overall 5.8% rate;

3) No mention of the impact of the administration's innovations, like accountable care organizations;

4) Substantial uncertainty.

The Population Health Blog's take:

In a highly competitive global economy, even single point increases in healthcare costs underlying the manufacture of items that make up the GDP, automobiles or washing machines, is bad news.  If the projections are true, business leaders could reconsider the merits of overseas outsourcing or start dropping employer-based health insurance.

Costs in 2015 and 2016 will be lower than the 5.8% rate, which means it won't hurt enough to make healthcare a big factor in the 2016 elections.  While the Affordable Care Act remains a rhetorically rich target environment, the PHB expects politicians on both sides of the partisan divide to find better red meat elsewhere, like building thousand-mile walls or buying hundreds of millions of solar panels.  So, if you're an investor in healthcare stocks, continue to go long.

Any good news in other sectors of the economy could paradoxically make healthcare costs look comparatively worse. As energy and housing costs creep along at a lower rate, consumers are going to see a greater percent of their income going toward healthcare - either in the form of health insurance premiums or out-of-pocket cost-sharing.  If (and that's a big if) the U.S. economy can return to its efficient cost-cutting ways, expect the healthcare debate to heat up and for calls for a government-sponsored option to increase. 

The mean increase of 5.8% is an average.  Some segments of the insured population will see higher costs and others will see lower costs "around" the mathematical mean.  Which voter block "loses" by paying more than the 5.8% could drive the coming debate as it shifts from insurance coverage to affordability and access.  Case in point: the PHB's spouse is registered to vote and she's not happy with the guesswork behind our pricey monthly insurance premium.

While Americans have reasons to be reluctant to travel overseas for cheaper surgery, they'll be far less so for access to a course of just-as-good medications that are under foreign price control.  Call it medication tourism.

And finally.... uncertain abounds.  No one saw that Hepatitis C would have such a near-term impact.  Who knows what else is out there?  A new epidemic?  Another cure?

Stay tuned!

Reform of Medicare's Sustainable Growth Rate: Be Careful What You Wish For

Be careful what you wish for.  The law of unintended consequences.  I'm from the government and I'm here to help. 

These were the nostrums that the Population Health Blog considered when the Senate passed House Bill 2 and killed the walking budgetary undead known as the Sustainable Growth Rate or SGR. 

As PHB readers know, the Balanced Budget Act of 1997 law attempted to use the SGR to substitute medical inflation with general inflation adjustments to the Medicare physician fee schedule.  Since the costs of CAT scans have risen faster than cat food, Congress periodically had to pass catch-up "fixes."

As the PHB understands it, the just-passed "Medicare Access and CHIP Reauthorization Act of 2015" undoes the SGR by substituting 0.5% increases for the next five years.  Medicare payment cuts that were scheduled to kick in immediately have been averted - just in time.

The PHB will review what the bill does.  Then it will look at some downsides.

What does the bill do?

During the five year period, Medicare will transition to two new payment models.

In 2019 the Physician Quality Reporting System (PQRS), Value-Based Modifier and electronic record Meaningful Use (MU) will be consolidated into single program dubbed the Merit-Based Incentive Payment System (MIPS).

Physicians who choose to participate in MIPS will be assessed on a consolidated measure of quality, cost/utilization and electronic record MU.  They will also have to report on participation in quality improvement activities. CMS will offer technical assistance for QI. Medical organizations will be able to provide input into quality. The quality data will be collected and housed in certified registries. More research will be applied to emerging science of risk adjustment for cost/utilization.

The MIPS composite performance score will range from 0 to 100 (it's on page 40 of the Bill). MIPS incentive payments will be adjusted based on change from baseline using the mean as a performance threshold. Physicians who fail to report or participate will automatically be assigned a score of zero.  Physicians participating in a medical home (as defined by Medicare) will automatically be assigned the highest score.

Physicians falling below the mean will experience percentage-based payment cuts.  Payment incentives for the winners will be budget based. Physician-specific data will be made publicly available.

MedPAC will be charged with monitoring MIPS impact on Medicare beneficiary access to care.

There are also incentives for physicians to leave MIPS behind and participate in alternative payment models (APMs). The incentives will be greater than the MIPS program, giving physicians another reason to join an ACO.  If successful, fee-for-service will eventually go away.

The PHB's take on the legislation? 

Something is better than nothing, but the PHB readers need to be aware of the potential downsides:

0.5% increases may not keep up with physician costs.  While the SGR was repugnant, the patches were tied to medical cost inflation. 

As Congress continues to "reform" health care, uncertainty will continue to abound.  Never mind the continued vulnerability of a fifth of our economy to partisan rancor, this particular bipartisan exercise in legislation still went to the wire.  That's success?

Congress - which admittedly knows little about health care - is still outsourcing considerable administrative judgment to the Secretary of HHS. This is a political appointee who presides over a vast and largely unaccountable bureaucracy.  That is, unless, you have pull like this.

While it's called "APS," it doubles down on ACOs, which still have an uncertain impact on cost and quality. We still do not know how to reconcile the theoretical efficiencies of large provider systems with the real world need for antitrust enforcement.

If - emphasis on the word if - MIPS and APS don't work out, more physicians will flee the Medicare program.  They'll cater to credit-card wielding patients, further reducing access to socioeconomically vulnerable persons who have no other options.  While the legislation charges MedPAC with monitoring access to care, they may not spot problems in time.

As for MIPS:

The economic upside incentives are based on an assumption that the money will be there and that Congress will fund it.

PQRS and MU programs, which are still based on dubious evidence (here and here), are alive and well.

Because there's a mean or median on a 0 to 100 scale, 50% of participating docs are guaranteed to be economic losers.  That information will be in the public domain.  And that's only part of the problem.

Gaming may still be possible. Examples include avoiding high risk patients, questionable links between reporting vs. outcomes and moving the goalposts by changing reporting thresholds. 

Reporting MIPS data may turn out to be odious; similar tone-deaf hassles and their associated costs led to the rebellion against specialty society maintenance of certification.

Medicare will provide technical assistance? Really?

The Patient Centered Medical Home, Medicare's Comprehensive Primary Care Intiative and Cost Neutrality

Like this, but with snow

Oh my, he was really angry.

Back when the teenage Population Health Blog was living in New York, our family had a small garden tractor that was outfitted with a snowplow. After a particularly heavy snowfall, the PHB's father assigned the son the task of clearing the driveway. When the obliging PHB ran out of space to push the snow, its solution was to eschew use of a shovel and ram piles of snow outward by repeatedly backing up and accelerating forward in 4th gear. Teenage cries of "ramming speed!" seemed like a good idea at the time, but it really mangled the metal struts that held the plow to the front end of the tractor.

In economic terms, any savings the father achieved in outsourcing the snow removal was chewed up by hours of do-it-yourself blacksmithing that weekend. The driveway may have been cleared, but to the PHB father, the entire transaction ultimately ended up being a cost neutral bust.

Which brings CMS' Comprehensive Primary Care ("CPC") Initiative to mind. Thanks to the just-concluded Medical Home Summit, the PHB got to hear one of the authors of a CPC deep-dive analysis speak to the initiative's first-year findings.

 The entire report can be found here.

Very briefly, by October of 2012, CMS got Medicaid and 29 commercial health insurers to agree to ALL align and have everyone - including Medicare - to pay participating primary care sites a fee for Patient Centered Medical Home (PCMH) style care management.

 The rationale for this arrangement was to spare the clinics from having to offer the PCMH to only some of their patients. By imposing a "critical mass of payers" all patients had equal access to the same benefit.  That meant that practices wouldn't have to deal with the variations of different payer-dependent work flows and payment structures.

More than 500 practices (with an average of 4.4 providers) serving more than 2.5 million patients in 7 Medicare regions agreed to participate. In order to do that, the practices had to demonstrate that they had met meaningful-use criteria for their electronic health records (EHRs), had been officially recognized as a PCMH and had experience in quality improvement.

Once they were in the CPC, they were not only paid additional care management fees by CMS, but received quarterly feedback reports and technical assistance in achieving CMS mandated "milestones" (they can be found on page 84)  Over the course of the first year, practices received a median of $226,000 in care management fees.

At the end of one year, compared to propensity-matched non-CPC practices, CMS averaged $20 per beneficiary per month in care management fees.  They saved $14 per beneficiary per month in claims expense.  Compared to the non-participating sites, that $6 in additional cost did not achieve statistical significance.  Because the confidence intervals crossed $0, the conclusion was that CPC was cost neutral (the results can be found on page 120).  Some of the regions had statistically significant savings, while other regions had statistically significant losses.

The PHB's take:

Good thing the PHB father isn't in charge. 

This isn't the transformative PCMH break-through, and if CMS is looking to bend the cost curve, these one year results suggest Ms. Burwell et al are going to have to look elsewhere.

That being said, it's possible that years 2, 3 and 4 will show savings.  Even if that's true, the PHB wishes CMS and the health system "good luck" in being able to execute anything outside of fiscal year blocks of time.  We'll see.

The good news? The PHB suspects that the participating primary care sites ended up in the black.  They had already absorbed the costs of their EHRs and becoming PCMHs prior to the start of the initiative, so most of their $226,000 probably flowed right to their bottom lines.

As an aside, some of the $14 PBPM savings were attributed to a reduction in 30-day readmissions.  As the PHB understands it, CMS already has a methodology to claw that cost back from the health care system.  If that's true, the PCMH readmission savings are being double counted.

Image from Wikipedia

Discovering What We Don't' Know About Risk-Adjustment for Hospital Readmission Rates in Medicare

Something like this?

When the Population Health Blog agreed with the spouse that it was time to replace the living-room gas fireplace insert with something more sleek and modern, it then turned its attention to changing the surrounding mantle. The PHB favored something heraldic, featuring partially-garbed warrior babes, sporting shields and sandals. Cherubs too.  Preferably oak.

After some counseling from the PHB spouse, it came to realize that its wayward tastes in interior design may be a function of going sans helmet during its childhood bicycle riding, its deepening appreciation of bourbon's mysteries and pausing too frequently on Fox News' The Kelly Files. 

Naturally, the PHB wants to know the relative influence of each. Increasing exposure will help it propose some ideas for the unfinished basement.

Hospital administrators are dealing with a similar problem when it comes to readmissions.

Approximately 20% of discharged Medicare beneficiaries come back within 30 days. In response, CMS financially penalizes hospitals with high readmission rates for heart attack, heart failure and pneumonia. To reduce that penalty, hospitals have asked about the quality of their care, discharge planning and follow-up outpatient care. 

But, what is the relative impact of each? Where should administrators focus their corrective actions? 

Or, like the PHB and interior design, are readmissions ominously outside of anyone's control?

According to some interesting research, it turns out that more than half of the variation in readmissions may be outside of hospitals' control.  What's worse, CMS doesn't account for that in its calculation of the penalty that uses patient factors, such as age, gender and illness burden.

That's the conclusion of this recent article appearing in HSR Health Services Research.

Herrin and colleagues correlated CMS's Hospital Compare readmission data with each hospital county's socioeconomic data (rural vs. urban, persons living alone, employment status and educational level), access to care (the per capita density of primary care and specialist physicians as well as hospital beds) and nursing home number and quality (the number beds and the number of high-risk, long-term patients with bed sores).

Based on risk-adjusted rates from 4,079 hospitals in 2,254 counties, the authors found that more half of the variation in hospital readmissions was statistically explained by the counties' data.  That included persons living alone, low educational attainment, urban setting, a higher number of Medicare beneficiaries, fewer primary care physicians, fewer nursing home beds, higher numbers of nursing home patients with bed sores.  More beds and more specialist physicians were also independently associated with higher readmission rates.

The Population Health Blog's take?

As it noted previously, much of the vituperation around the unexplained variation in health care has been less a function of an inefficient health care system and more a function of our inability to identify the underlying drivers of utilization.

And now we're getting better. The HSR article shows that when it comes to readmissions, much of that variation is a reflection of the poverty in our neighbors' homes as well as the strength of the primary care network and the ability of nursing homes to act as a cushion.

Hopefully the mandarins at CMS will take these findings into account as they continue to financially sanction hospitals for readmissions. A more sophisticated approach to risk adjustment could help lessen the budgetary impact of county-level factors that are outside the hospital administrators' control. 

And since hospitals' bottom lines typically reflect the populations they serve, better risk adjustment could also lessen the disparate impact on the nation's poorest hospitals.

Image from Wikipedia

I'm From CMS and I'm Here to Help

Writing in JAMA "online first," CMS Administrator Tavenner and colleagues offer a payment reform "framework" that includes "multipayer collaboration."  The article is wonky, so the Population Health Blog dons its universal adminispeak translator so us normal humans can better understand what CMS is up to.

According to the writers, CMS has a history of innovatively implementing reforms that were later adapted by other insurers. The most famous example is the hospital "DRG" system that, starting in 1983, paid for a diagnosis in lieu of a daily room rate.  Suddenly, hospitals had an incentive to shorten hospital stays, which is precisely what happened in the years that followed.

Buoyed by this success, the authors describe the merits of championing Medicare's transition from "category 1" fee-for-service without any link to quality to "category 4" population-based payments that are linked to quality. And, as CMS embarks on this excellent payment journey toward accountable care, they'll get other commercial insurers to mirror their efforts by:

"Being conveners" as in "working with" other insurers in a region or a state to implement large payment reforms.  Working with may include grants;

"Incentivizing," as in requiring the participation of other payers prior to funding any large pilot programs.

"Working with states" to implement additional reforms, when the state has sufficient influence over the health insurance or delivery system.

The Population Health Blog's take:

"Category 4 population-based payments" are a form of capitation that are ultimately designed to transfer insurance risk from CMS to providers. The PHB hopes the bureaucrats at CMS are aware of the risk re-introducing some 1990s-style managed care abuses. 
 
What also goes unmentioned by the JAMA article are examples of CMS payment reform unintentionally gone awry, including RVUs, regional payment variation and the SGR with lingering fraud. While CMS has had its successes, it's also had more than its share of problems.  Time will tell which track record will apply to population-based payments.

Convening was an art developed by Medicaid programs.

Ms. Tavenner implies that population-based payments (a form of capitation) are intrinsically linked to quality.  Nothing could be further from the truth, since it's possible to reward quality while also relying on a FFS methodology. 

Accountable population-based care remains a large experiment.  Ms. Tavenner implies that there is an aura of inevitability.  The PHB learned long ago that the sign of a good plan is an exit strategy in case things go south.  The PHB didn't read that here.

The Dichotomy of Medicare’s Data Release Policy: Moral Suasion and the Limits of Mass Data Transparency

The Disease Management Care Blog continues to welcome blog posts from outside authors. This is another one courtesy of Erik Tollefson, who works in the health policy field. He can be reached at erikDOTmDOTtollefsonATgmailDOTcom.

Medicare has had an interesting few weeks: Not only did Congress manage to pass another one-year “fix”  to the (unsustainable) sustainable growth rate reimbursement scheme, but planned Medicare Advantage cuts magically turned into a marginal increase (at least for some insurers) after deftly applied political pressure. This behind-the-scene politicking set the stage for CMS’s second massive release of provider data last Wednesday. Although the data release may further codify extant evidence of some specialists being more richly compensated than their primary care colleagues, coupled with the potential pursuit of fraudulent claims, unfiltered transparency reveals Medicare’s weakness in providing useful transparency for beneficiaries. 

CMS formally released data detailing the 100 most common inpatient services, 30 most common outpatient services, and all physician and other supplier procedures and services performed on 11 more Medicare beneficiaries. The data included information on the doctor who performed the procedure, as well as the city and zip code where the procedure was performed. The biggest related take away seems to be a rather intuitive one: specialists, particularly cardiologists, ophthalmologists, and oncologists, are the biggest recipients of Medicare reimbursements: The three groups of specialists accounted for 7% or $5.6 billion of reimbursements in 2012.

Some in the medical community have responded to the perceived public scorched earth exercise circumspectly: hell hath no fury like scorned ophthalmologists. Valid questions, however, have emerged not only regarding the veracity of released data, but also the lack of context: some individual provider numbers may serve as a pass-through for entire practices, and a longitudinal release of data might allow for a more accurate picture of how service and drug utilization has changed as the country’s demographic profile has grown older. 

In response, CMS and politicians have responded that the benefits of “transparency” would likely drive more cost-effective care with less waste. Putting aside concerns of what transparency actually means in this context, an economist might ask a more apposite question: while the literature shows that public excoriation (in limited doses) may be effective in reducing price variance in an established legislative framework on the supply side, where are equivalent measures to empower consumer (demand–side) decision making?

To perhaps put a finer point on it: while variance in the pricing of procedures by hospitals and providers is certainly a problem, an equal problem is the variance in treatment across patients using non-cost effective treatments and medical devices that add little or no value to outcomes.  On this critical point, CMS and their data are silent. While further data releases may address this critical lacuna in consumer information, it is not likely: statute prevents the agency from making drug and procedure approval decisions explicitly based on costs.  Thus, an odd dichotomy has emerged in Medicare’s transparency campaign: exposure of the downstream cost equation (doctors), while leaving the curtain back on the furtive upstream costs including the RUC committee and other important input prices that would help consumers to make more informed decisions. 

The conflation of releasing big data with transparency is not a fatal error. Numerous useful data products may ultimately be developed as a result of CMS’s efforts.   A bigger problem, however, may be the asymmetrical use of moral suasion to expose doctors to the glare of public scrutiny without giving consumers information on the cost and outcomes related to technology and drugs use. If transparency does not result in more informed decision making, some would argue it is not transparency at all.

Of Medicare Shared Savings Program (MSSP) ACOs, Start-Up Costs, Preliminary Financials and Data Support

The Disease Management Care Blog didn't know there was a "National Association of ACOs" either, but they've just released results from a "web" survey of the organization member ACOs that are participating in the Medicare Shared Savings Program.  You can read more about the Program here. 

Of the total number of 123 MSSP participants, 35 anonymously participated in the survey. Their covered beneficiary numbers ranged from 5,100 to 78,000.

Among the findings:

Start up costs in the first year of operation averaged $2 million, with a range from $300,000 to $6.7 million.  With continued operations, the average cost over two years was $3.5 million. Total capital needs averaged $4 million.

While Medicare has yet to release any formal financial results, the ACOs' estimated results showed that 13 guessed they would break even. Nine will gain an average of $1.3 million and six will lose $1.3 million.  Six had no estimates, while other gains and losses ranged from positive $9 million to negative $10 million, respectively.

The biggest problem? "CMS data and learning to access it and process it."  This required pricey information technology with an average of $413,000 internal and $443,000 external costs.

The DMCB's take:

Running an integrated delivery system or physician-hospital organization as part of an ACO is a very expensive and capital intense enterprise.  Given the additional costs of new technology, electronic records and personnel, some of the ACOs may not be able to afford the loss of millions of dollars.  It remains to be seen how Medicare will handle the downside of hospital lay offs or clinical program discontinuations among some of the MSSP participants.  Will members of Congress have to get involved on behalf of their local constituents?  Stay tuned!

As the disease management industry learned, it's one thing to "save money," it's another to save money in excess of fees plus program costs.  $3.5 million over two years is a lot of money to make up before you break even, making the DMCB wonder if cheaper programs (such as population health management) with a more modest scope (such as reducing readmissions) may have a better long term value proposition. Once again, stay tuned.

And the Disease Management Care Blog predicted there'd be problems with the data feeds here.  Recall that one of the problems with the Medicare Health Support program were "execution" problems with the timely provision of utilization data from CMS.  ACOs - and the Medicare beneficiaries they're taking care of - deserve better. 

Health & Human Services Office of the Inspector General: EHRs Can Facilitate Medicare Fraud

EHR fraud police?

Disease Management Care Blog readers are well aware that it is a nattering nabob of electronic health record (EHR) negativity. It not only has the professional scars from past encounters with these on-screen scourges, the DMCB's literature reviews suggest the impact of the EHR on quality is questionable and its ability to reduce costs is illusory In fact, there's evidence that it can increase costs and hike hospitalization rates.

In addition, the DMCB has repeatedly raised the phenomena of copying and pasting and zombie diagnoses that lead to bloated and inaccurate EHR notes.

Well, readers and detractors no longer have to take just the DMCB's word for it. Things are so bad that even CMS should be worried.

According to this just-released report from the Department of Health and Human Services' (HHS) Office of the Inspector General (OIG), "copy-pasting" and "overdocumentation" are increasing the rates of Medicare fraud.

The former can pepper the EHR with inaccurate information that leads to unnecessary testing and treatment, while the latter makes the work of patient care appear more complicated than it really is.

What's more, the OIG points out that while HHS has been very active (and remuneratively generous) in promoting EHR "meaningful use," it has done little to respond to EHR-enabled fraud. Short of a live human personally comparing multiple notes simultaneously, CMS and its contractors have no ability to systematically audit patient billing records. What's more, there are no consistent internal policies in place or agreement on what to do even if it is detected (such as payment suspensions, overpayment adjustments or referrals to law enforcement).

The DMCB's take:

It remains to be seen if this warning will lead the HHS bureaucracy to catch up with another unintended consequence of health information technology.  If it does, the DMCB is worried that CMS may take its cue from the hostile RAC audits and further alienate physicians. 

Time will tell.

Image from Wikipedia

Dr. Berwick Discovers Toxic Politics Too Late

Dr. Berwick listens to Ms. Sebelius

If you're interested in a post-mortem of Dr. Donald Berwick's failure to be confirmed as CMS Administrator, check out his November 13 JAMA article on "The Toxic Politics of Health Care." 

He identifies six causes of our national discontent, which the social media-minded Disease Management Care Blog has boiled down into 140 character or less tweetable summaries:

Money: there are too many entities making too much money to give up on the status quo. "Reducing costs" means cutting into someone's income.

Unorganized majority latent interests: the majority of Americans can't see or translate their interests into effective political action.

The Silence of Professions: Organized medicine has been all about the SGR and tort reform.  They should advocate for health reform.

Suspicion of Science: public trust in science is eroding because of its elitism. That, in turn, feeds into fear of rationing.

Duality of self interest: a lot of people work in the health care industry. Cutting costs will add to U.S. unemployment woes.

Ambivalence about Federalism: it's difficult to develop a coherent national health policy when power is shared with the states.

Ambivalence about the poor: it's difficult to convince the U.S. electorate that disadvantaged populations deserve public support.

For the record, the DMCB openly supported Dr. Berwick's nomination and still feels that he would have ably served his country as CMS Administrator.  That being said, one cause for his undoing was his failure identify these issues before he was forced to leave Administration. 

Docs like Dr. Berwick - and that includes the DMCB - unfortunately think that all they need are the facts to win the day. Not so: they need to address the money, catalyze coalitions, nudge stakeholders, reconcile multiple interests, cut deals and still do what's right.

He was the wrong guy at the wrong time.

Pioneer ACO Program Results: Why Saving Money for CMS Doesn't Mean The Business Model is Viable

According to South Dakota researchers, the predator status of Tyrannosaurus rex can no longer be questioned. After finding one of its teeth embedded in the healed spine of a Hadrosaurus, paleontologists now believe T rex was a fearsome hunter, not an carrion munching opportunist. 

But, asks the Disease Management Care Blog, how do we really know that that Hadrosaurus wasn't  pretending to be dead when the T rex took its bite?  Alternatively, the Hadrosaurus could have been sleeping and only looked dead to a slow-witted and lazy T rex. 

Dino doubts, says the DMCB, remain.

Such is the level of skepticism that the DMCB is bringing to its reading of the recent CMS press release describing the initial results of the Pioneer ACO program.  CMS says "positive" and "promising." The DMCB says "problematic" wonders if, like the T rex dilemma, there isn't an alternative interpretation.

The DMCB explains.

Recall that the Pioneer ACO program is designed to test whether large integrated organizations can be successfully rewarded for reducing health care costs through a program of "shared savings."  Under the program, if the savings exceed a minimum threshold, CMS will remit a portion of the upside savings back to the participating organizations.

According to the press release, the health care costs for the 669,000 Medicare beneficiaries cared for by the 32 Pioneer ACO program providers grew only .3% versus .8% for a parallel group of "similar beneficiaries." 13 organizations exceeded the savings threshold, which will lead to Uncle Sam writing checks for $76 million in shared savings.

This front page article in The Wall Street Journal has more detail. It says 18 of the 32 reduced health care costs, which leads the DMCB to conclude that five otherwise "successful" participants did not cross the required savings threshold. Two participants lost money. That, in turn, suggests the remainder, or twelve, broke even.

Details on how each individual institution fared are not readily available.  According to WSJ, Boston's Partners Healthcare reduced Medicare claims expense by $14 million.  They will be rewarded with a shared savings check of $7 million. Wisconsin's Bellin-ThedaCare will get "several million."

Good "win-win" news for the Pioneer organizations, CMS, Uncle Sam and U.S. taxpayers, right? A critical mass (40%) achieved millions in shared savings, which means proof of concept met and that a key part of Obamacare is successful, right?

"Not exactly," says the DMCB.

It figures 100% of the participating organizations had to each invest millions for personnel and other infrastructure to pursue the Medicare savings in the first place.  In other words, they were in the red before Pioneer even began.  That means that, in addition to the two participating organizations that lost money, the 12 that "broke even" as well as the 5 that did not make threshold also lost millions. 

That's 19 losers or almost 60% of the participating organizations.

In addition, it's possible that for some of the 13 "winners" that the shared savings awards won't  match their up-front multi-million dollar investment either.  Assuming that's true, it's possible that as many as two thirds of the Pioneer organizations lost money. No wonder 9 of the participants have signaled a desire to exit the program.

The DMCB's dinosaur analogy may be apt.  Given a two out of three likelihood of losing millions in the first year of operations, ACOs may just be too big and complicated to survive in the current health care environment.  Nonetheless, the Pioneer program will continue and the DMCB will stay tuned for the Year 2 results.

In the meantime, the DMCB wishes CMS good luck in using these "positive" and "promising" results to expand the program anytime in the near - or distant - future.  

The Hospital Readmissions Reduction Program: Cautions and Caveats

"Maybe you should go
back to the hospital!"

Ask most wonks - especially ones who never took care of a patient - about "readmissions," and, after quoting this article, these health policy Urkels will tell you that returning to a hospital is the poster-child of all that ails U.S. medical care. Providers who can't get it right the first time, they say, are not only giving slipshod care, but are double dipping because their mistakes generate even more fat fees the second time around.

"Balderdash!" says the Disease Management Care Blog. Many Medicare inpatients are so sick that it's a miracle that they get to go home in the first place.  Keeping patients in the hospital can be more life-threatening than the home environment and, when things don't get well after a discharge, it's often more a function of social support than medical skill. 

That doesn't mean that CMS is going to listen to docs and back off of its Hospital Readmissions Reduction Program (HRRP). Using risk-adjusted actuarial projections, every U.S. hospital will be prone to a possible payment reduction if their observed rate of readmissions for heart attack, heart failure, and pneumonia exceeds the expected rate. Based on those projections, approximately two thirds of hospitals could be penalized.

Writing in the New England Journal of Medicine, Karen Joynt and Ashish Jha point out that hospitals are concerned because 1) readmissions fall outside of their control and 2) the actuarial projections are imperfect.  As a result, hospitals that care for the most fragile and socioeconomically disadvantaged are at risk for paying more than their fair share of CMS's $280 million claw-back penalty. 

The NEJM authors recommend three modifications to CMS' HRRP:

1. Include patients' socioeconomic status in any risk adjustment modeling. One easy-to-obtain modifier, for example, could be whether the patient is on Supplemental Security Income.  Patients on SSI are less able to cope, which is why they quality for the program in the first place.

2. Include hospitals' mortality rates in any risk adjustment modeling.  Hospitals with special expertise are less likely to have borderline patients die on their inpatient services, which means they'll have their more than their fair share of fragile survivors.

3. Limit the penalty to readmissions that occur within hours or days of a discharge, instead of the current problematic policy of counting any readmission that occurs within 30 days.  It makes sense to believe that a premature discharge or slipshod discharge planning is at fault if the patient returns within 3 days instead of three weeks.

Since it's unlikely that HRRP program is going away, the DMCB agrees with the three recommendations.  In the meantime, it also suggests:

1. CMS should be held accountable by Congress to execute well on the program,

2) Claims analytics - possibly using a "Big Data" approach - should be applied to Medicare claims to examine whether hospitals are turning to two potential options to undermine the program:

a) gaming the system by altering how they "code" the billing for their readmission patients, or

b) accepting the penalty because of favorable income from readmissions.

Image from Wikipedia

The "Coporatization" of U.S. Health Care: Why the Good Prognosis for Health Insurers & ACOs May Be Guaranteed

Corporatization

The Disease Management Care Blog is ashamed to admit it, but it's reading Edward Klein's The Amateur. While much of the book is a conservative-partisan rehash of Mr. Obama's alleged personal and political shortcomings, it did raise one issue that intrigued the DMCB:

"Corporatization."   It seems this White House likes it.

As the DMCB understands it, this is a policy agenda that favors the formation of huge corporate organizations that dominate the national business climate. Its argument is that, thanks to their size and scope, these gigantic private, public and not-for profit corporations are better able to marshal the resources it takes to launch transformative programs, achieve efficiencies, take risks and make profits that are beyond the normal reach of traditional commerce. Think about the hundreds of billions-of-dollars-approaches to housing, financial services, battery operated cars, high speed rail, solar power, privatized space travel and, last but not least, health care insurance and delivery.

A key ingredient of corporatization is "partnering" with government in a way that blurs the line between private enterprise and the public interest. Ingredients include government-backed financing, special tax breaks, loans, grants, mixed Boards of Directors and sovereign investment funds.  The downsides are quite familiar also: crony capitalism and too-big-to-fail status 

The best example of corporatization is China. Beijing centrally orchestrates many of its key economic sectors including finance, banking, housing, public transportation and heavy industry with an opaque mix of public and private companies. While political reforms and respect for human rights have been found wanting, the prospect that China could eclipse the United States in the next 25 years has prompted many in the U.S. to admire China and reexamine the merits of old fashioned capitalism and unfettered markets. For an interesting example of that thinking, see this editorial by Andy Stern that recently appeared in the Wall Street Journal.

What could this explain and what are the implications?

1. The abandonment of the government-run "public option" early in the course of creating the Affordable Care Act. Despite his hostile anti-insurer rhetoric, Mr. Obama's ultimate belief in large mega-insurance corporations, a) regulations and b) public subsidies that bind the behemoth insurers to D.C. won the day.  And it ain't going away anytime soon.

2. The near ideological support by this Administration for Accountable Care Organizations. Despite little track record that ACOs offer a viable business model, the notion of large regional providers partnering with and led by CMS is fully consistent with a belief in corporatization.  This makes the DMCB wonder if Mr. Obama's intent is to assure that ACOs succeed, no matter what.

The Spin in HHS Secretary Sebelius' Year In Review Video

In her end-of-year-in-review video below, Secretary Sebelius extols the many accomplishments of HHS. As the Disease Management Care Blog has come to expect of our national leadership, this latest Affordable Care Act (ACA) commentary is laced with spin. Just repeatedly SAYING stuff about the ACA's impact on small businesses, health information technology, community health centers and anti-fraud efforts doesn't necessarily mean that its true, or that our Republic is getting our money's worth in government or leadership.

Some of the counter-arguments below are just partisan, but there is enough truth in all of them to make the DMCB hope that Ms. Sebelius' 2011 end-of-the-year review has more ballast and less bombast.

To wit:

Tax credits to help small businesses buying health insurance. "The value of the benefit declines quickly, so many business owners in high-cost states get no tax break, and those elsewhere often say the credit is too small to make much of a difference."

National standards for health information technology. "Among themes of cost savings, workflow efficiency, and quality, the only benefits to be reliably documented were those regarding efficiency, including improved access to test results and other data from outside the practice and decreased staff time for handling referrals and claims processing. Barriers included cost, privacy and liability concerns, organizational characteristics, and technical barriers. A positive return on investment has not been documented." (Assuming national standards are eventually shown to be effective, the ACA really sets up a process to define those standards which remain a controversial work in progress.)

Community Health Centers. "Although most people probably imagine that community health centers are an inexpensive way to provide health care to poor people, the Colorado experience suggests otherwise. Medicaid payments to the FQHCs are far above Medicaid rates for private physicians and clinics."

Tough Medicare anti-fraud efforts: "Congress has been increasing appropriations for the anti-fraud program that’s jointly run by Justice and HHS. Administration leaders promote the value of a special fraud prevention and enforcement task force known as HEAT. The health care law enacted this year dedicates even more federal dollars to these efforts. Yet, despite the record number of defendants, actual criminal convictions for health care fraud violations are flat resulting in a falling conviction rate" (After so many years or promises that we really REALLY mean it this time, can we prosecute our way out of the problem?)

To give credit where credit is due on the non ACA issues, the DMCB finds Ms. Sebelius was more truthful:

Dramatic changes in cigarette packaging. The link to the evidence says the FDA is getting this one right thanks to it's expanded powers under the recently passed Family Smoking Prevention and Tobacco Control Act. It remains to be seen if this will translate into the outcome that counts: declines in the national rate of tobacco use.

Childhood nutrition in public schools: The DMCB says Ms. Obama's Healthy, Hunger-Free Kids Act of 2010 is evidence-based, but let's see if it really makes any difference and leads to less childhood obesity: it was only just passed.

Emergency response efforts for the "Swine Flu" epidemic: The DMCB notes that CDC's expertise was outstanding but public support is not a given.