Medpac struggles to define “medical home”

Medicare Payment Advisory Commission (MedPAC) Public Meeting, March 6, 2014

>From the transcript:

DR. [JULIE] SOMERS: Good afternoon. In this session, [Medpac staff] Kevin [Hayes], Katelyn [Smalley], and I would like to explore with you the idea of creating a per-beneficiary payment for primary care practitioners in the fee-for-service Medicare program. [p. 239]

…. [T]he Commission recommended establishing a medical home pilot [in 2008]. Variants of the recommendations for a primary care bonus and a medical home pilot were established under PPACA. … The [primary care bonus] program expires at the end of 2015, so we’d … like to hear the Commission’s views about extending the current program or replacing it with a per-beneficiary payment for primary care. [p. 240]

MR. [GLENN] HACKBARTH [MEDPAC CHAIR]: Okay. …. I am the one to blame if you don’t like this topic. I’m the instigator behind this, and I wanted just to say why that is. Why take this up now when there [are] … a number of medical home demonstration projects underway, some of which include Medicare? …. Why not just wait for the end of the medical home demonstrations?

There are two reasons for that. First … is the existing primary care bonus expires at the end of 2015…. Do we want to continue the existing bonus, or do we want to reconfigure it and do something like this?….

The second reason … is that I’ve become increasingly concerned about the medical home demonstrations on a number of different grounds. First of all, I am a little bit worried that the medical home model has … become gold-plated, and that in order to meet all of the NCQA requirements, et cetera, there are a lot of bells and whistles that have been added to it…. [M]y impression is that not all of them have really been validated as adding value, but they add cost, and so I’m worried that maybe the medical home model has a real cost disadvantage…. [pp. 251-253]

http://www.medpac.gov/transcripts/0314MedPAC_transcript.pdf

If you endorse a vague plan based on conventional wisdom rather than evidence and it doesn’t work, how do you revise it? Upon what evidence, by what logic, do you alter this or that part of the plan? The Medicare Payment Advisory Commission (Medpac) struggled with that problem at its March 6 meeting in the course of reviewing the performance of the “patient-centered medical home” (PCMH), an amorphous concept Medpac endorsed in 2008. The struggle did not go well. Commissioner after commissioner raised serious questions about the PCMH, but none of their questions triggered a productive discussion, the rationale for Medpac’s 2008 endorsement of the PCMH was never mentioned much less reviewed, and when the meeting was over it was impossible to say whether or how Medpac will propose changing the definition of the PCMH.

Revisiting the PCMH concept was Chairman Glenn Hackbarth’s idea. Hackbarth explained to his fellow commissioners that he wanted the commission to consider yet another PCMH experiment  because a temporary bonus for Medicare primary care doctors, authorized by the Affordable Care Act, is due to expire at the end of 2015. (The bonus is measured as a percent of each claim submitted by primary care doctors for Medicare patients.)

Mr. Hackbarth posed three questions to his fellow commissioners:

(1) Is it a good idea to extend the bonus beyond 2015?

(2) If so, should Medpac recommend that the bonus be extended as is or should the bonus be converted to a per-patient-per-year (capitation) payment?

(3) If the commission recommends converting the bonus to a capitation payment, should doctors be required to meet all the requirements of a “patient-centered medical home” (PCMH) established by the National Committee for Quality Assurance (NCQA)?

Commission members seemed unanimously to support extending the bonus, and 13 of the 17 commissioners expressed support for converting the bonus to “home” payments. But not a single commissioner offered an answer to Hackbarth’s third question – what requirements, if any, in the current definition of the PCMH should be stripped out?

Commission members made it clear they are concerned about the performance of the PCMH. Hackbarth opened the discussion by stating he believes the PCMH has become “gold-plated” – burdened with so many requirements (“electronic medical records and … 24-hour coverage and a long list of other requirements,” as he put it) that it can’t save money. (p. 267)

Other commissioners concurred. Scott Armstrong (CEO of Group Health Cooperative) and Dr. Rita Redberg observed that giving patients expanded access to doctors via e-mail has greatly expanded “virtual visits” without lowering face-to-face visits. (Armstrong added that “a lot” of what patients talk about in their e-mails “is useless.”) (pp. 275-276) Vice Chair Dr. Michael Chernew said he thought the “administrative requirements” currently imposed on the PCMH were a “hassle” and could outweigh any benefits the PCMH could achieve (p. 288). Willis Gradison said “adding too many requirements … to the structure of primary care” was driving doctors “into the arms of the hospitals.” (pp. 269-270)

Dr. David Nerenz suggested that the PCMH’s problem is more serious than merely being “gold-plated.” He questioned one of the most fundamental premises of the PCMH and all other managed care fads, namely, the claim that “care coordination … pays for itself [through] fewer admissions, fewer readmissions, fewer complications, fewer ED visits, fewer this, fewer that.” [p. 283]

John Christiansen (p. 279) and Peter Butler (p. 306) noted that the large systems that are buying up physician practices may not use PCMH payments for primary care, and Jack Hoadley observed that doctors may not be aware of the small capitation payments most PCMH programs pay to cover “home” services (p. 302).

Drs. Chernew (p. 291) and Rita Redberg (p. 278) noted that a growing body of research questions the conventional wisdom that the PCMH can cut costs by improving quality. Redberg, the editor of JAMA Internal Medicine, noted that she is seeing “a lot of manuscripts” that demonstrate the PCMH is not working as well “as one had hoped.”

Totally missing from this critical review of the PCMH was any discussion of Medpac’s justification for endorsing the PCMH in the first place. By a 16-0 vote, Medpac endorsed the “medical home” in its June 2008 report to Congresshttp://www.medpac.gov/chapters/Jun08_Ch02.pdf . But there was nothing in that report that resembled an evidence-based rationale for the PCMH. The “rationale” the Commission did offer exhibited the features typical of all managed care manifestos: The concept it purported to endorse was extremely vague, it was not supported by evidence, and it was oversold.

The 2008 report listed the usual string of vague attributes “homes” are supposed to have, including “use health IT” and “maintain 24-hour patient communication and rapid access,” the two features Mr. Hackbarth objected to. The report went on specifically to recommend that Medicare impose pay-for-performance schemes on “homes,” and that “homes” be required to use e-mail as a method of maintaining 24-hour access. But the report failed to offer any justification for its recommended list of PCMH features, and cited not a single study in support of the list or any item on the list. The report seemed to say Medpac relied on interviews with “experts” to derive this list, but even that is unclear.

Is it any wonder, then, that Medpac commissioners and staff did not revisit Medpac’s 2008 report for guidance on how to alter the definition of the PCMH in 2014?

Medpac has repeatedly made it clear it endorses the PCMH for the same reasons the American Academy of Family Physicians and other primary care groups did in 2007http://www.aafp.org/dam/AAFP/documents/practice_management/pcmh/initiati…  – as a means to bring more resources into primary care and to cut costs. The PCMH is probably not going to cut costs, and consequently it may backfire as a method of strengthening primary care. If we want to strengthen primary care and cut costs at the same time, we will have to enact a single-payer system.

Geographic Imbalances in Doctor Supply and Policy Responses

By Tomoko Ono, Michael Schoenstein, James Buchan
OECD Health Working Papers No. 69, April 3, 2014

Doctors are distributed unequally across different regions in virtually all OECD countries, and this causes concern about how to continue to ensure access to health services everywhere. In particular access to services in rural regions is the focus of attention of policymakers, although in some countries, poor urban and sub-urban regions pose a challenge as well. Despite numerous efforts this maldistribution of physician supply persists. This working paper first examines the drivers of the location choice of physicians, and second, it examines policy responses in a number of OECD countries.

The choice of practice location is complex, but across the examined OECD countries, several key factors have emerged in studies of doctors and medical students in recent years. First, the relative unattractiveness as places to live and work is the root of an unequal distribution of physicians across regions and areas. Second, the mode of employment and payment for physicians set the frame for their options for location choices. Third, while incomes for general practitioners in rural regions are higher than those in urban regions in some counties, it may not be sufficient compensation as they work for longer hours and in generally more difficult working conditions. Furthermore, professional prestige plays a role as more prestigious specialties tend to be concentrated in urban areas and by default making rural practice less attractive. Finally rural origins and experience in rural settings are influential factors as doctors who are from rural regions are much more likely to go and practice in rural setting compared to those with an urban upbringing.

While a truly comprehensive regional development policy is helpful to tackle the maldistribution of physicians across regions, policymakers in the health sector have three broad strategies to respond to imbalances in physician distribution.

* The first strategy is to target future physicians to maximize the pool of physicians available for practice in relatively underserved regions. This means increasing the number of qualified physicians who are interested in practice in underserved regions, and/or the number of working hours they are willing to provide. The crucial focal point of action for this strategy is the selection and education of medical students.

* The second strategy is to target current physicians to maximise the share of physicians in the health system who practice in underserved regions. This requires a suitable incentive system, which may include both “carrots and sticks”, i.e. not only financial incentives, but also suitable regulatory measures to influence physicians’ location choices.

* The third strategy is to do with less, i.e. accept that staffing levels will be lower in some regions and focus on service re-design or configuration solutions. This can be done through expansion of involvement in health service delivery by non-physician providers. Service delivery innovations can also make a difference, by the use of technology (e.g. through better use of telemedicine), better management of human resources and their workload, or a combination thereof.

Policymakers in most countries will have to blend a range of elements of these three strategies, and review this mix over time. The best mix of such strategies will depend on various factors: patient needs, demography of the population and the physician workforce, health system characteristics, the budgetary situation, and the overall health reform context. While broad characteristics of interventions can be identified, more robust evaluations are required to improve the evidence basis for these policies and strategies in order to support policymakers to make better informed choices.

http://dx.doi.org/10.1787/5jz5sq5ls1wl-en

All OECD countries experience maldistribution of the physician supply. Of particular concern is the distribution of primary care physicians, especially the lack of their presence in underserved regions. This OECD working paper describes the problem and suggests some approaches to improve distribution.

Currently I am in San Francisco, participating in the National Conference on Primary Health Care Access presented by the Coastal Research Group. The chief of adult medicine of a highly respected California family medicine residency that is noted for training physicians who would more likely practice in community health centers in underserved communities told me that though their program is initially very successful, their graduates experience burn-out, typically after about three years of practice. This is a very serious problem that obviously requires the attention of public policymakers. This OECD report suggests some strategies that could help.

The fact that all OECD nations experience these problems indicates that the health care financing system alone cannot be expected to correct these deficiencies. However, a public financing system, such as single payer, should improve the flexibility to work with the health care delivery system to drive improvement in the distribution of health care professionals. Our current fragmented financing system provides little opportunity to incentivize strategies that might help.

We do need a single payer national health system, but also we need to elect public officials who believe in better health care for all. Although correcting maldistribution will always remain a challenge, there is much that can be done, but we need people in charge who will want do it.

Structuring Incentives Within Organizations: The Case of Accountable Care Organizations

By Brigham Frandsen, James B. Rebitzer
NBER, April 2014

Accountable Care Organizations (ACOs) are new organizations created by the Affordable Care Act to encourage more efficient, integrated care delivery. To promote efficiency, ACOs sign contracts under which they keep a fraction of the savings from keeping costs below target provided they also maintain quality levels. To promote integration and facilitate measurement, ACOs are required to have at least 5,000 enrollees and so must coordinate across many providers. We calibrate a model of optimal ACO incentives using proprietary performance measures from a large insurer. Our key finding is that free-riding is a severe problem and causes optimal incentive payments to exceed cost savings unless ACOs simultaneously achieve extremely large efficiency gains. This implies that successful ACOs will likely rely on motivational strategies that amplify the effects of under-powered incentives. These motivational strategies raise important questions about the limits of ACOs as a policy for promoting more efficient, integrated care.

http://www.nber.org/papers/w20034

The growth in the number of accountable care organizations (ACOs) has been phenomenal considering that they are primarily only a wish on the part of the policy community and bureaucrats that such organizations would increase efficiencies to reduce health care spending, especially when earlier results have been very disappointing. This study has added to the doubts about ACOs by showing that incentive payments that they receive will exceed cost savings unless the ACOs “achieve extremely large efficiency gains” – an extremely unlikely outcome.

The policy literature is saturated with these “wish they would work” reports and recommendations to further expand the use of ACOs. The experiment has already failed, and we are meandering back into the disdained managed care organization model disguised as ACOs. The tragedy is that this has distracted our politicians and bureaucrats from moving forward with a model that actually would increase efficiencies, not to mention meeting other goals such as universality and removing financial barriers to care – a single payer national health program.

Health-care changes seem to be paying off in B.C.

By Keith Baldrey
Surrey Now, April 8, 2014

Have we finally wrestled that voracious gobbler of tax dollars – the public health-care system – to a standoff, if not to the ground? By that I mean the days of the system automatically devouring increasingly large amounts of money every year to feed itself may be drawing to a close, at least in British Columbia.

Of course, I don’t mean the health-care system will stop being the biggest area of government spending by far (the health-care budget this year is pegged at $16.9 billion, out of a budget of $44.4 billion).

But the rate of growth in spending is slowing down significantly. The annual hike is down to 2.6 per cent this year, compared to just several years ago when it was above five per cent.

Now, there are those who think this is bad news. After all, shouldn’t we be plowing even more money into the system rather than less? If we don’t, won’t health-care standards suffer? The answers are: a) not necessarily and b) no.

The ideological defenders of the public health-care system (who think the answer to everything is to blindly spend gargantuan amounts of more money) think the only measuring stick worth anything is per capita spending. In other words, B.C. should spend more dollars per person than anywhere else, and things will take care of themselves.

But those with experience in the system, who study it and come up with good ideas for change, point to another and far better measurement: health outcomes.

And in that regard, B.C. ranks the highest in the country. While we sit second-to-last in per-capita spending, (only Quebec ranks lower) we beat most other provinces in all kinds of areas: best cancer survival rates, lowest heart attack rate, longest life expectancy, lowest smoking rate, lowest infant mortality rate, etc.

When it comes to wait times for certain surgeries (an admittedly frustrating situation for many people on those wait-lists), they’ve been mostly going down and not up. The median wait time for a hip joint replacement has declined to 13 weeks from 19 weeks over the last 10 years, while a knee joint replacement has gone from 25 weeks to 18 weeks over the same time period.

None of this is to suggest the health-care system does not need constant up-keeping and reform (crowded emergency rooms, for example, seem to be a chronic problem, and we could always use more nurses). But it is encouraging that blind yearly spending hikes are being replaced by newer, innovative ways of spending that are both efficient and lead to healthier outcomes for the users of the system.

Not being able to count on big increases in funding every year has brought some much-needed discipline to the system, and employing some different models has also helped.

One of the most significant changes that is paying off is the government’s relationship with doctors.

In the past, physicians were viewed as costly, self-interested cogs in the system.

Now, however, they are viewed as equal partners who have real responsibilities when it comes to running the health-care system.

For example, several joint committees have been established with the Doctors of B.C. (formerly called the B.C. Medical Association) where doctors and the government shape policies that are aimed at improving patient health, rather than protecting the financial interest of either party.

One committee is for general practitioner services (overseeing improvements to the primary care system), another is for specialist services (aimed at improving access for specialist care) and a third is for shared care (focused on better integration of all levels of care).

As well, something called the Divisions of Family Practice has been created. It links family doctor practices and is designed to improve common healthcare goals in a particular region (improved maternity coverage, for example).

Committees such as these were unheard of a decade ago. They appear to be improving patient care by focusing on smart, evidence-based decisions rather than on simply demanding more money, either for doctors’ pay packets or a health authority’s budget.

The Canada Health Accord between the provinces and the federal government died last week. It means Ottawa will be cutting in half its annual transfer of money to pay for health care.

The fact the B.C. government hardly said a peep about the accord’s demise is evidence of how much the system has changed in the past few years.

http://www.thenownewspaper.com/opinion/baldrey-health-care-changes-seem-…

Evidence based health care. Why should that be controversial? Yet it is. It provokes accusations of “cook book medicine,” or “bureaucrats interfering with your health care.” Current efforts in British Columbia can provide us with a more rational perspective than is being provided by these negative memes.

Physicians from the B.C. medical association (Doctors of B.C.) and the government are cooperating on efforts to improve patient health in manners other than by simply increasing spending (though that should not be neglected when there is an obvious imperative). Such efforts to spend better rather than simply spending more will be particularly important now that the federal government is being run by individuals who promised to protect Canada’s medicare but instead cut federal spending on the program in half.

Although single payer systems are often criticized for being bogged down by government inflexibility and laggardly progress, the activities in B.C. demonstrate that such processes need not be an inevitability. In fact, B.C. is showing us that their single payer system does have the flexibility to make needed improvements.

In the United States we are currently using models, such as accountable care organizations, supposedly to achieve higher quality at a lower cost. Unfortunately, the model seems to have been misdirected away from efforts to improve health care based on evidence to efforts granting nominal awards based on penny pinching and a few negligible teach-to-the-test measures. Under our fragmented, multipayer system it is difficult achieve widespread adaptation of systemic improvements, simply because it is our unique, dysfunctional financing system that is so inflexible.

This is not to belittle the efforts of AHRQ toward expanding the use of evidence based medicine. Rather it is to make the point that government efforts such as those of AHRQ can be more effective if we get the dysfunctional financing system out of the way, especially the intrusive private insurers, and allow AHRQ and other public entities to cooperate more effectively with the people actually delivering health care.

Does Winning a Pay-for-Performance Bonus Improve Subsequent Quality Performance? Evidence from the Hospital Quality Incentive Demonstration

By Andrew Ryan, Matthew Sutton and Tim Doran
HSR, April 2014

To test whether receiving a financial bonus for quality in the Premier Hospital Quality Incentive Demonstration (HQID) stimulated subsequent quality improvement.

Under the HQID, hospitals received a 1 percent bonus on Medicare payments for scoring between the 80th and 90th percentiles on a composite quality measure, and a 2 percent bonus for scoring at the 90th percentile or above.

We found little evidence that hospitals’ receipt of quality bonuses was associated with subsequent improvement in performance. This raises questions about whether winning in pay-for-performance programs, such as Hospital Value-Based Purchasing, will lead to subsequent quality improvement.

http://www.hsr.org/hsr/abstract.jsp?aid=49319522092

Quality derives from dedicated professionals, working within a well-designed health care infrastructure, striving to obtain the best health care for their patients.

Politicians and the policy community seem to miss this point as they continue to look for administrative gimmicks that are essentially managed care innovations. What we don’t need in the United States is more administrative excess. Pay-for-performance (P4P) continues to fail as an incentive for true quality improvement, even if some studies have shown almost worthless teach-to-the-test increases in scores.

If we really want quality, we need to work on our health care infrastructure, beginning with implementing a financing system that drives quality – a single payer national health program.

Why We’re in a New Gilded Age

By Paul Krugman
The New York Review of Books, May 8, 2014

Review of “Capital in the Twenty-First Century”

By Thomas Piketty, translated from the French by Arthur Goldhammer
Belknap Press/Harvard University Press, 685 pp., $39.95

Thomas Piketty, professor at the Paris School of Economics, isn’t a household name, although that may change with the English-language publication of his magnificent, sweeping meditation on inequality, Capital in the Twenty-First Century. Yet his influence runs deep. It has become a commonplace to say that we are living in a second Gilded Age — or, as Piketty likes to put it, a second Belle Époque — defined by the incredible rise of the “one percent.” But it has only become a commonplace thanks to Piketty’s work.

The big idea of Capital in the Twenty-First Century is that we haven’t just gone back to nineteenth-century levels of income inequality, we’re also on a path back to “patrimonial capitalism,” in which the commanding heights of the economy are controlled not by talented individuals but by family dynasties.

This is a book that will change both the way we think about society and the way we do economics.

Capital in the Twenty-First Century is, as I hope I’ve made clear, an awesome work. At a time when the concentration of wealth and income in the hands of a few has resurfaced as a central political issue, Piketty doesn’t just offer invaluable documentation of what is happening, with unmatched historical depth. He also offers what amounts to a unified field theory of inequality, one that integrates economic growth, the distribution of income between capital and labor, and the distribution of wealth and income among individuals into a single frame.

The current generation of the very rich in America may consist largely of executives rather than rentiers, people who live off accumulated capital, but these executives have heirs. And America two decades from now could be a rentier-dominated society even more unequal than Belle Époque Europe.

But this doesn’t have to happen.

At times, Piketty almost seems to offer a deterministic view of history, in which everything flows from the rates of population growth and technological progress. In reality, however, Capital in the Twenty-First Century makes it clear that public policy can make an enormous difference, that even if the underlying economic conditions point toward extreme inequality, what Piketty calls “a drift toward oligarchy” can be halted and even reversed if the body politic so chooses.

The key point is that when we make the crucial comparison between the rate of return on wealth and the rate of economic growth, what matters is the after-tax return on wealth. So progressive taxation — in particular taxation of wealth and inheritance — can be a powerful force limiting inequality. Indeed, Piketty concludes his masterwork with a plea for just such a form of taxation. Unfortunately, the history covered in his own book does not encourage optimism.

Piketty ends Capital in the Twenty-First Century with a call to arms — a call, in particular, for wealth taxes, global if possible, to restrain the growing power of inherited wealth. It’s easy to be cynical about the prospects for anything of the kind. But surely Piketty’s masterly diagnosis of where we are and where we’re heading makes such a thing considerably more likely. So Capital in the Twenty-First Century is an extremely important book on all fronts. Piketty has transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to.

http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-…

Hopefully the excerpts above from Paul Krugman’s review of Thomas Piketty’s “Capital in the Twenty-First Century” will entice you to read Krugman’s full review, and then that will entice you to read Piketty’s full book. If you do so, you’ll understand why Krugman says, “we’ll never talk about wealth and inequality the same way we used to.”

Although a book on capital would seem to be off the topic of health care, Piketty provides us with the background to understand why we can’t seem to get health care financing right here in the United States, though he doesn’t discuss it specifically.

We do use progressive tax policies to partially fund health care through general revenues, but we also burden wage earners with the cost of health plans partially financed through regressive tax expenditures – the tax deductibility of employer-sponsored plans paid by employees through forgone wage increases.

Whereas median household income in the United States is now about $50,000, the cost of health care for the typical family of four is now about $22,000 (Milliman Medical Index). These numbers no longer compute, but they tend to be lost in the fragmented, dysfunctional way in which we finance health care. They cry out for reform.

There are two general approaches – on spending and on revenues – that seem to be imperative. One would be to reduce the wasteful spending in health care that occurs from our profound administrative excesses, our high prices, and the maldistribution of our resources due to a lack of adequate public oversight. A single payer system would redirect our resources to much better use.

The other approach that we need – as the disconnect between income and health costs demonstrates – would be to fund the single payer system through much better defined progressive taxes. Piketty’s treatise shows us that we really don’t have any other alternative. And since we already spend such a large portion of our GDP on health care, a progressively financed single payer system would provide a significant step in the visionary direction that Piketty has laid out for us.

Primary Care Access for New Patients on the Eve of Health Care Reform

By Karin V. Rhodes, MD, MS; Genevieve M. Kenney, PhD; Ari B. Friedman, MS; Brendan Saloner, PhD; Charlotte C. Lawson, BA; David Chearo, MA; Douglas Wissoker, PhD; Daniel Polsky, PhD
JAMA Internal Medicine, April 7, 2014

The goal of the current study was to simulate the experience of nonelderly adults with 1 of 3 insurance types—private, Medicaid, and uninsured—seeking new patient appointments in 10 diverse states to obtain precise estimates of primary care access before the ACA coverage expansions.

Between November 13, 2012, and April 4, 2013, we made 12,907 calls to 7788 primary care practices requesting new patient appointments. Across the 10 states, 84.7% of privately insured and 57.9% of Medicaid callers received an appointment. Appointment rates were 78.8% for uninsured patients with full cash payment but only 15.4% if payment required at the time of the visit was restricted to $75 or less.

http://archinte.jamanetwork.com/article.aspx?articleid=1857092

This study reveals the success rates in obtaining a primary care appointment as a new patient by non-elderly adults, prior to full implementation of the Affordable Care Act. So what was it like then, what will the Affordable Care Act do for that, and what would single payer have done to change the results?

Being privately insured provided the greatest probability of success in obtaining an appointment – 85% were able to do so. Close to that – at 79% – were new patients who would pay cash in full at the time of the visit. Medicaid patients had more difficulty – with only 58% being able to make an appointment. Worst of all was for those who would pay cash, but no more than $75 at the time of the visit – only 15% were successful.

Of course, this is what we’ve known all along. Privately insured patients have good access, Medicaid patients have poorer access by virtue of being covered by an underfunded welfare program, and uninsured patients with limited resources have the worst access of all. Those willing to pay cash in full may have been covered by a high-deductible plan but, in any event, were likely to to have the means to pay upfront charges. So money or good insurance will open the doors, whereas Medicaid is dependent on the willingness of the primary care provider to participate in the Medicaid program, and being poor and uninsured… well, good luck.

What will happen now that ACA is well on its way to full implementation? The answer is complex, which is no surprise because the ACA model is itself complex. Let’s look at each category of coverage.

For the very wealthy who are quite willing to pay full fees in cash, and the scheduling staff of the primary care practice understands that, access should approach 100%. If any queues exist, those individuals likely can buy their way to the front of the queue.

For privately insured individuals, whether obtaining coverage through employment or through individually purchased plans within or outside of the exchanges, access may be less than it is now since insurers with the new narrower networks exclude many primary care professionals from their panels. Most individuals will not want to select an out-of-network primary care professional, especially since out-of-pocket costs could be staggering since the cap applies only to in-network care (except for certain emergencies).

Even those employer-sponsored plans that ACA was designed to protect are now moving in the direction of higher deductibles, narrower networks, and even private exchanges with a shift to defined-contribution vouchers. Although the percentage of practices accepting specific insurance plans will decline because of the doctor being excluded from the networks, patients will probably still choose private plans as being their best option. It’s just that they will have to shop more before they find practices that accept their specific insurance.

Finding primary care practices that accept Medicaid may be more difficult. Although there is a temporary increase in primary care evaluation and management payments, that will end very soon. It is likely that there will not be much of an increase in the number of physicians who will agree to accept the low Medicaid payment rates. If those who do accept Medicaid find that the increased volume is crowding out their privately insured patients, then they may feel that they have to cut back or eliminate accepting new Medicaid patients as well.

With an increase in Medicaid managed care organizations, Medicaid patients may have this option, but then that limits their access since they must go to the managed care providers. Also the low payment rates for Medicaid managed care organizations may result in relatively spartan care merely because of the insufficiency of funds. Another possibility is that federally-qualified health centers may be able to increase their capacity because of new funds authorized by ACA. Hopefully these two expansions will provide enough capacity to ensure access of Medicaid patients to at least some form of primary care.

Access for the low-income uninsured – and there will be tens of millions of them – will certainly continue to be impaired. If Congress further expands the funding of federally-qualified health centers, then the uninsured will have that option. But specialized care will likely be out of reach for most.

So, in general, access to primary care is unlikely to change to any major degree as the result of the provisions of ACA. Patients will have less choice of providers, more exposure to out-of-pocket costs, but an increase in funding should improve access to other options such as Medicaid managed care organizations or federally-qualified health centers – especially important for low-income individuals.

What if we had a single payer system instead? Primary care practices would never have to ask a new patient what insurance they had, or whether they intended to pay cash. Patients would never have to check network lists to see whom they could call. (There would still be some “networks” such as Kaiser Permanente, but they would be integrated health systems that patients would choose because of their own preferences.)

With single payer, never again would a new patient have to hear this response from a receptionist: “New patient? What kind of insurance do you have? Oh, I’m sorry. The doctor isn’t able to accept any new patients now.”

(Unless you are a masochist, skip down to the comment at the end. The following excerpts from the CMS documents are merely to provide verification for the statements in the comment.)

CMS Ensures Higher Value and Quality for Medicare Health and Drug Plans

CMS, April 7, 2014

Today, the Centers for Medicare & Medicaid Services (CMS) issued the 2015 rate announcement and final call letter for Medicare Advantage and prescription drug benefit (Part D) programs.

Payments to Medicare Advantage Plans:

*  CMS estimates that the overall net change to plan payments between 2014 and 2015 to be +0.4 percent, compared to the estimated overall net change to plan payments of -1.9 percent for the proposals in the Advance Notice Individual plan payments will vary by plan based on, but not limited to, its location and star rating.

*  Before the Affordable Care Act, Medicare Advantage plans were paid more than 10 percent compared to traditional Medicare, costing the program more than $1,000 per person each year, while quality and health outcomes were similar to those enrolled in traditional Medicare. The changes underway reduce excessive payments to Medicare Advantage plans, while incentivizing quality improvements by basing part of Medicare Advantage payment on plan quality performance.

*  To provide for continued stability in the Medicare Advantage program, CMS will implement a new phase-in schedule for the Part C risk adjustment model introduced in 2014. In addition, to improve payment accuracy, CMS has refined its risk adjustment methodology to account for the impact of the influx of baby boomers. In addition, for 2015, CMS will not finalize the proposal to exclude diagnoses from enrollee risk assessments.

http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2014-Pre…

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Announcement of Calendar Year (CY) 2015 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter

CMS, April 7, 2014

Key Changes from the Advance Notice:

Growth Percentages

CMS-HCC Risk Adjustment Models for CY2015

Medicare Advantage Enrollee Risk Assessments

Normalization Factors

RxHCC Risk Adjustment Model

International Classification of Diseases-10 (ICD-10) Code Sets and Diagnosis Data Sources for 2015 Risk Scores:

Attachment III

Section A. Final Estimate of the National Per Capita Growth Percentage and the Fee-for- Service (FFS) Growth Percentage for Calendar Year 2015

Comment: Several commenters had concerns about the magnitude of changes proposed in the Advance Notice and the potential impact to Medicare beneficiaries and plans. Commenters raised concerns that the payment reductions described in the Advance Notice would lead to significantly higher MA premiums, significantly reduced benefits, or both. Some commenters argued that these cuts would lead to MA plans exiting the market. Some providers noted that the reductions to MA contained in the Advance Notice would seriously threaten their ability to provide high quality care to beneficiaries. We also received comments that the cuts would lead to market contraction, less competition, and ultimately less access for beneficiaries. Commenters requested that we keep Medicare Advantage revenue flat for 2015.

Response: We are committed to a strong, stable Medicare Advantage program and to continued access to high quality plan choices for Medicare beneficiaries. Over the past several years, even as the Medicare Advantage program transitioned to payments that are more aligned with FFS Medicare costs, enrollment in Medicare Advantage has increased to an all-time high of approximately 15 million beneficiaries. Today, nearly 30 percent of Medicare beneficiaries are enrolled in a Medicare Advantage plan and benefits remain stable. We believe that the proposals outlined in the Advance Notice will continue the transition to payments that are more comparable to FFS costs, while at the same time continuing the trend toward greater enrollment in high quality plans.

Section G. CMS-HCC (Hierarchical Condition Category) Risk Adjustment Model for CY 2015

Comment: We received a few comments opposing our proposal to use a blend of the 2013 CMS-HCC model and 2014 CMS-HCC model in 2015, and supporting instead calculating risk scores using exclusively the 2013 CMS-HCC model. Many commenters were in support of continuing to use a blend of risk scores from two different models. Two commenters were in favor of ending the phase-in of the clinically revised model introduced in 2014 and calculating risk scores in 2015 using only this model.

Response: As we remain committed to the clinically revised model introduced for the 2014 payment year, we will not use risk scores exclusively from the 2013 CMS-HCC model as recommended by some commenters. Because we still believe that additional time to transition to the 2014 model is needed, we also will not use risk scores from the 2014 model exclusively as recommended by two commenters, and will continue for 2015 payment year to blend the risk scores calculated using the 2013 CMS-HCC and 2014 CMS-HCC models.

In light of the impact of the final payment updates and changes for 2015, however, we are concerned that the use of the 2014 blend percentages of 75% and 25% that we proposed to continue in the Advance Notice would not have the same effects on payment stability that they had last year, and that we assumed they would have when proposing them this year. As in 2014, we will continue to blend the risk scores from the old and new models, in order to both support our intention to move to the updated model while also providing time for plans to transition to its use in payment. Thus, to further our goal of promoting stability and given concerns about the impact of payment changes for 2015, we will blend the two scores using a 67 percent and 33 percent blend, respectively. Specifically, we will blend the risk scores calculated using the 2014 CMS-HCC model with risk scores using the 2013 CMS-HCC model, each appropriately normalized, weighting the normalized risk scores from the 2013 model by 67 percent and the normalized risk scores from the 2014 model by 33 percent. These risk scores from the 2013 and 2014 CMS-HCC models will include the risk scores calculated from the community, institutional, new enrollee, and C-SNP new enrollee segments of the model and will be used in Part C payment for aged/disabled beneficiaries enrolled in MA plans. See Section II.G of the 2014 Advance Notice and Section III.D of the 2014 Rate Announcement for more details on the clinically revised CMS-HCC model.

Section H. Medicare Advantage Enrollee Risk Assessments

Comment: Many commenters opposed the proposal to exclude diagnoses that resulted from home visits, including enrollee risk assessments, unless there was a subsequent clinical encounter.

Response: CMS continues to support the use of enrollee risk assessments for wellness, care coordination, and disease prevention; however, we remain concerned that many home visits are being used primarily for the gathering of diagnoses for payment rather than to provide treatment and/or follow-up care to beneficiaries. We recently instituted a new requirement for MA organizations to identify, in the diagnoses they submit to CMS, which diagnoses are from home visits. These new data will enable CMS, for the first time, to evaluate how many diagnoses are identified in home visits and to assess what effect the home assessments have on the care provided to beneficiaries. In order to allow our policy to be informed by this analysis, we have decided not to implement the proposal to exclude diagnoses from home visits for 2015 payments. We will study the data submitted by MA organizations to determine appropriate policy options for consideration for 2016 and future years.

Section J. Normalization Factors

Comment: The majority of commenters supported CMS’ proposal to calculate the normalization factors for the CMS-HCC and RxHCC risk scores using a methodology to better capture the increased proportion of younger beneficiaries known as the “baby boomers.” Several commenters recommended that CMS make retroactive adjustments to the normalization factors.

Response: We appreciate the support for modifying the normalization factor methodology to account for the influx of baby boomers to the Medicare population. CMS uses historical data to develop normalization factors prior to a payment year in order to promote stability for bidding purposes. Given this policy, CMS will not retroactively change the normalization factors for prior years. However, we did consider whether using more historical data could better inform the calculation of the 2015 normalization factors (in the Advance Notice we proposed using 2012 and 2013 risk scores to estimate annual trends for the CMS-HCC models). By using a quadratic functional form fit to risk scores from 2010 through 2013, the normalization factors will better reflect more recent changes in the population trends. Thus, we are finalizing the 2015 normalization factors for the CMS-HCC and RxHCC models as shown in Table III-2:

Excerpts from Table III-2 2015 Normalization Factors:

0.992  CMS-HCC model implemented in 2013

0.978  Clinically revised CMS-HCC model implemented in 2014

Comment: A number of commenters asked for more transparency around the calculation of the normalization factors.

Response: In Table III-3. below, we show the risk scores used to calculate the normalization factors for 2015.

Excerpts from Table III-3. 2010-2013 Risk Scores Used to Calculate 2015 Normalization Factors

CMS-HCC model implemented in 2013

2010  0.986

2011  0.977

2012  1.009

2013  1.008

Clinically revised CMS-HCC model implemented in 2014

2010  0.978

2011  0.988

2012  0.997

2013  0.995

To access this 154 page announcement, at the following link select “Announcements and Documents” from the left column, and then select “”2015 Announcement” with a release date of “2014-04-07”: http://www.cms.hhs.gov/MedicareAdvtgSpecRateStats/

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Washington insiders crossing the line in defense of Medicare Advantage

Quote of the Day, April 3, 2014

The Affordable Care Act included provisions to reduce these overpayments to levels comparable to the costs of patients in the traditional Medicare program. AHIP has already used its influence to convince the administration to use chicanery to reduce the cutbacks in the first two years of the reductions (by issuing phony quality awards and by using accounting gimmickry with the scheduled but deferred SGR adjustments). Since the administration seems to be resisting further chicanery (we’ll soon find out) AHIP has intensified its public campaign using some of Washington’s “finest.”

http://www.pnhp.org/news/2014/april/washington-insiders-crossing-the-lin…

In an effort to privatize Medicare, conservatives in Congress enacted legislation to provide private Medicare Advantage plans with a 14 percent overpayment in order to unfairly compete with the traditional Medicare program. The Affordable Care Act included measures to gradually eliminate this overpayment. CMS appears to be thwarting the intent of Congress to correct this injustice.

Because of pressure from the insurance industry, the Obama administration used chicanery in the first two years of the ACA implementation to maintain higher Medicare Advantage rates. This year the reduction was to have been 1.9 percent. So the insurance industry initiated an intensive campaign to reverse these reductions. Once again, CMS has used more chicanery to convert their reduction into a 0.4 percent gain – reassuring private insurers that they can continue to expand their private takeover of Medicare.

There are numerous gimmicks that were used, and some of them are quite obscure. For instance, perhaps the most important revision was in the “normalization factors.” Because of the influx of baby boomers into the Medicare program, it was decided to use “a quadratic functional form fit to risk scores from 2010 through 2013” in the CMS Hierarchical Condition Category. To provide “transparency around the calculation of the normalization factors,” they showed “the risk scores used to calculate the normalization factors for 2015.” Glad that’s clear.

Seriously, CMS has used innovative accounting to increase payments to Medicare Advantage plans based on the fact that there is an influx of baby boomers – a subset of Medicare beneficiaries that is younger, healthier, and less expensive than the older beneficiaries already enrolled. Taxpayers will pay more for lower cost beneficiaries. I remember the quadratic equation, but I don’t remember it ever being used to cheat taxpayers and reward the private insurer rentiers.

Rentiers? Those are individuals whose income is derived from capital, and now our nation’s capital is being concentrated in the top centile. If you missed yesterday’s Quote of the Day on Thomas Piketty’s “CAPITAL,” you should not bother reading the CMS song and dance above, and instead read yesterday’s message.

Congress and the Obama administration are serving the interests of the rentiers, and this Medicare Advantage payment scam is only one example. It is time for the people to take control. As Thomas Piketty wrote, “if we are to regain control of capitalism, we must bet everything on democracy.”

qotd: Thomas Piketty – “CAPITAL in the Twenty-First Century”:http://www.pnhp.org/news/2014/april/thomas-piketty-capital-in-the-twenty…

CAPITAL in the Twenty-First Century

By Thomas Piketty
Harvard University Press

The overall conclusion of this study is that a market economy based on private property, if left to itself, contains powerful forces of convergence, associated in particular with the diffusion of knowledge and skills; but it also contains powerful forces of divergence, which are potentially threatening to democratic societies and to the values of social justice on which they are based.

The principle destabilizing force has to do with the fact that the private rate of return on capital, r, can be significantly higher for long periods of time than the rate of growth of income and output, g.

The inequality r>g implies that wealth accumulated in the past grows more rapidly than output and wages. This inequality expresses a fundamental legal contradiction. The entrepreneur inevitably tends to become a rentier, more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. The past devours the future.

The consequences for the long-term dynamics of the wealth distribution are potentially terrifying, especially when one adds that the return on capital varies directly with the size of the initial stake and that the divergence in the wealth distribution is occurring on a global scale.

The problem is enormous, and there is no simple solution.

Many people worry that moving toward greater cooperation and political integration within, say, the European Union only undermines existing achievements (starting with the social states that the various countries of Europe constructed in response to the shocks of the twentieth century) without constructing anything new other than a vast market predicated on ever purer and more perfect competition. Yet pure and perfect competition cannot alter the inequality r>g, which is not the consequence of any market “imperfection.” On the contrary. Although the risk is real, I do not see any genuine alternative: if we are to regain control of capitalism, we must bet everything on democracy.

http://www.hup.harvard.edu/catalog.php?isbn=9780674430006

Although the English translation of Thomas Piketty’s “CAPITAL in the Twenty-First Century” was published only this month, it has already become a classic in the economics literature. This book is not about health care, but it provides us with an excellent background for understanding why we need to reform our current health care financing system. It is a must read, not just for those advocating for health care reform, but for everyone.

Our health care system is designed to support rentiers. Current trends in income and in wealth accumulation indicate that a disproportionate share of global income will continue to shift more and more to the control of the rentiers. We are already seeing a relative decline in financing of health care for wage earners, manifested by higher cost sharing and by more limited access through narrower, lower-cost provider networks.

Piketty shows us how the concentration of capital at the top drives an ever greater percentage of income upwards, with the rentiers having to do nothing further to accomplish that feat. He explains how the solution is progressive income taxes and progressive wealth taxes.

Expanding progressive financing through single payer would provide a step forward in implementing solutions to the iniquities of concentrated wealth. And it would be a significant move since health care constitutes such a large part of our GDP.

Without intervention, there is the risk of major social disruption. If we wish to avoid this, people are going to have to rediscover democracy. As Thomas Piketty says, “if we are to regain control of capitalism, we must bet everything on democracy.”

Avoiding Low-Value Care

Panel: Atul A. Gawande, M.D., M.P.H., Carrie H. Colla, Ph.D., Scott D. Halpern, M.D., Ph.D., M.Bioethics, and Bruce E. Landon, M.D., M.B.A., M.Sc.
The New England Journal of Medicine, April 3, 2014

(Excerpts here are not in continuity.)

Atul Gawande:  When a service is widely recognized as providing little or no benefit, or maybe even harm, what should be done to reduce its use?

I want to start with a seemingly simple question. How do you define low-value care?

Bruce Landon:  It turns out that there are very, very few services that are low-value in all clinical situations. So I actually think it’s really important to use a clinical lens, and particularly for, as I’m taking care of patients, it’s a lens that really focuses on that patient in front of me.

Scott Halpern:  Well, I think it’s incredibly difficult to draw lines, particularly because all our definitions are predicated at the population level. And population-level estimates don’t apply very naturally to individual patients.

So when we describe something as low-value, I think what we’re typically trying to do is to distinguish it from something that is no-value. But it turns out that no-value interventions, first of all, are probably very few and far between. There are very few things we do in medicine that truly could not help any patient to which we might consider applying it.

Landon:  I think it’s going to be hard to address the problem of low-value care by having payers and policymakers make rules, because there’s this clinical heterogeneity story.

Halpern:  The right rates at which we utilize these quote-unquote low-value services is not zero. We don’t want to practice so frugally that we’re missing opportunities to provide benefits to patients by not intervening. So I think at some level, physicians should be comfortable that they can make clearly well-thought-out choices that, although there are recommendations not to do things for the overwhelming majority of patients who fit a particular description, that there may be exceptions where the service is in fact a reasonable choice.

Carrie Colla:  I think that there’s a danger that blunt payment instruments will reduce the high-value care as well, and so I think to some extent that’s why thinking about it at a broader level while also monitoring outcomes, but thinking about it at a broader level in terms of payments makes more sense.

Gawande:  What would you say that the policies of the government ought to be, or of insurers ought to be, in order to make sure decision making more effective for both patients and physicians under these circumstances?

Halpern:  If we had one health insurance coverage system, all the prices would be a lot easier to keep track of, for physicians and patients alike. And it would be much easier to have a set menu at the bedside as these conversations are unfolding, of all the types of information that we would want. I recognize that may be a long way away. But it is one of the sort of unintended consequences of our variegated reimbursement system as it exists today.

Video (30 minute) and link to transcript:http://www.nejm.org/doi/full/10.1056/NEJMp1401245?query=TOC

Diagnostic and therapeutic interventions that are of low value remain a dilemma. In this age with an emphasis on containing costs, should interventions that have a high cost in relation to an anticipated minimal or negligible benefit be avoided simply to help “bend the cost curve”? Or should such interventions be offered since even the smallest potential benefit should not be withheld from the patient if the patient desires such?

The easiest decision to be made would be about interventions that clearly provide no benefit under any circumstances, and may even potentially inflict harm. This is not low-value care, but rather it is no-value care. Obviously such interventions should be abandoned. For the few health care professionals using them who fail to respond to educational processes, discipline should be considered.

What about interventions that have a significant risk of major harm but could provide a small benefit that is not commensurate with the potential harm? Clinical judgement begins to enter here, but it would be a rare circumstance where other factors may warrant proceeding with the intervention.

What about the intervention that is very expensive but potentially provides only minimal benefit? Although some might use measures such as anticipated increase in quality-adjusted life years (QALY), there are levels of spending that common sense tells you are far beyond the value of the potential benefit. Rejecting such interventions risks being labeled as rationing, but such a charge does not mean that common sense should be abandoned.

A variation of this category would be lucrative procedures in widespread use for which only a paucity of conflicting data provides a rationale for these practices – high cost but low benefit. Sometimes these correlate with excess capacity in the system, a problem that separate budgeting of capital improvements could improve. Also, administered pricing could lower payments to more closely match the extent of the benefit.

What about the expensive diagnostic intervention that has a very low probability of of turning up a disorder for which therapeutic interventions could be of great benefit, perhaps even life saving? This is where clinical judgement and being sure that the patient is well informed play a crucial role. This is also where those citing the Dartmouth studies hope to reduce health care spending. But if a low-yield test has a real chance of leading to an intervention of potentially great benefit, then the payer should not intervene.

A frequent criticism is that such low-yield tests are done too often to reduce the risk of a malpractice lawsuit, and that we could reduce the costs of malpractice if we did away with these “unnecessary” tests. Since such tests are low yield, frequently nothing significant is found and therefore no lawsuit was prevented. But the judgement should not be based on the cost per lawsuit prevented, but rather on the clinical benefit to the patient. This is why attacking low-yield tests is not a productive way of reducing malpractice costs.

What about the patient who demands an intervention when it is clear that there is no value in what the patient wants? It is the health care professional’s responsibility to inform the patient why such an intervention should not be entertained. Most patients will appreciate informed advice. For the rare ones that do not, physicians should never conspire with a patient to do wrong, even if it results in the patient seeking care elsewhere.

In all of these situations, the interests of the patient must come first. Clinical judgement is required for most of them.

So how do we address the costs? The current leading approaches are to erect financial barriers to care and to impair access by using narrow provider networks. These interventions are inappropriate because they save costs by preventing the patients from receiving appropriate care that they should have.

There is a far better method of reducing inappropriate spending, and that would be to enact a single payer system – an improved Medicare for all. Such a model dramatically reduces administrative waste and improves pricing of health care services. Under a single payer system it is much easier to match payment with value.