Cherry-picking Statistics to Bash Sanders’ Medicare-for-All Plan

Contrary to Claims by the Washington Post and Fortune, the Vast Majority of the Poor Would Gain

By Steffie Woolhandler and David Himmelstein
The Huffington Post, March 4, 2016

In the heat of battling Sen. Bernie Sanders, Hillary Clinton’s camp (and the camp followers at the Washington Post and Fortune magazine) has made a remarkable discovery: National health insurance (aka Medicare-for-All) hurts poor people.

How is that possible? It’s not. But a widely-quoted analysis by Ken Thorpe, a former Clinton administration official, used statistical sleight of hand to zoom in on the tiny slice of the poor who might pay more (while getting better care), and hide the vast majority who would gain.

Here are the real numbers we came up with by analyzing data from the Census Bureau’s 2015 Current Population Survey, the standard source for estimates of income and health insurance coverage.

At present 9.2 million people living in poverty — and 8.8 million just above the poverty line — are uninsured. They often can’t get vital care, and when they do, they face ruinous medical bills. For these 18 million, Medicare-for-All would be a godsend.

Another 10.7 million poor Americans and 21.5 million near-poor have private insurance. For virtually all of them, the new Medicare-for-All taxes would cost less than their current premiums.

Some of this windfall would go directly to families that now pay all or part of their own premiums. The rest would go to employers who now chip in to premiums for the poor and near-poor workers, but most economists believe these gains would be passed on to workers since benefit costs are, in fact, deducted from wages.

About 9.7 million poor and near-poor people have Medicare, without wrap-around private or Medicaid supplements. The vast majority of them would be better off under Medicare-for-All, which would relieve them of Medicare premiums, as well as onerous co-payments and deductibles.

What about the 42 million poor and near-poor Medicaid recipients? This is the group that Thorpe (and recent articles and editorials in the Washington Post and Fortune) claims would be hit hard by the new Medicare-for-All payroll taxes, which their employers would pass on to them by lowering their wages.

Yet, 34.6 million (82 percent) of these 42 million are children, retirees or others who have no earnings. Hence, they wouldn’t pay any new payroll tax.

Two million others earn no more than $7.25 an hour, the minimum wage, so employers couldn’t lower their wages to make up for the new taxes.

Only 3 percent (1.2 million) of poor and near-poor Medicaid recipients earn more than $15 an hour — the minimum wage that Sanders has proposed. That’s the number of poor households at risk of financial losses. But even that overstates how many might be harmed, since some pay out-of-pocket costs that Medicare-for-All would eliminate.

It’s a shame that even this small group might suffer, and we’d recommend that Sen. Sanders tweak his plan to protect them. That shouldn’t be hard.

But his plan would relieve the poor, as well as the middle class, from the daunting co-payments and deductibles that obstruct care and threaten finances. And it would abolish the narrow provider networks that restrict patients’ choice of doctors and hospitals. Instead, Americans could go anywhere for care, a privilege that every Canadian enjoys, but is rapidly vanishing in our country.

In every nation with national health insurance the poor — and middle-class families — fare better than here. They bear less of the health care cost burden, have better access to care, and live longer and healthier lives.

It takes extraordinary mental and rhetorical gymnastics to portray universal health care as bad for the poor. Having mastered that art, perhaps the Clinton team will turn its attention to repealing the law of gravity.

Steffie Woolhandler, M.D., M.P.H, and David U. Himmelstein, M.D., are professors of health policy and management at the City University of New York School of Public Health and lecturers in medicine at Harvard Medical School. The views expressed do not necessarily reflect the views of those institutions.

http://www.huffingtonpost.com/steffie-woolhandler/bernie-sanders-medicare-for-all_b_9385012.html

***

Comment:

By Don McCanne, M.D.

An Improved Medicare for All system would provide for everyone all necessary health care, and it would be funded with progressive taxes that are fair and affordable for each of us. Using one tentative set of tax policies as an example of how the system could be funded does not change this basic truth.

Selected numbers associated with Bernie Sanders’ loosely sketched out Medicare for All proposal have been used to attack the fundamental concept of single payer with no acknowledgement that eventual legislation would ferret out any numbers or assumptions that might be slightly off (though that’s in dispute) and then carefully tune them to get the financing right.

One example, using the widely circulated set of numbers, indicates that some lower income individuals might end up paying more than they do now, though the extent and intensity of the deficits have been exaggerated, as the analysis by Steffie Woolhandler and David Himmelstein shows. The point is that tax policies are quite malleable, with many potential sources and variable rates. They can be adjusted to ensure that taxes would be equitable for all.

Under the tentative Sanders numbers, about 1.2 million lower-income individuals might be slightly worse off financially, but at least they would be insured. Compare that to the 2.9 million adults who are in the ACA coverage gap who remain uninsured – a far worse problem than facing a modest financial imbalance. It would be far easier to adjust the taxes under a single payer system than it would be to fill in the coverage gap resulting from the complex administrative infrastructure created by ACA.

Those who continue to bash the Medicare for All concept based on tentative numbers and then conclude that we should stick with the Affordable Care Act are being disingenuous.

The Medicare for All model only needs fine tuning to meet the goal of health care for all, whereas merely patching the irreparably flawed ACA infrastructure will always leave us short of the goal. We need the right infrastructure, and then we can get them numbers right.

Physicians for a National Health Program (PNHP) is a nonpartisan educational organization. It neither supports nor opposes any candidates for public office.

Cherry-picking Statistics to Bash Sanders’ Medicare-for-All Plan

Contrary to Claims by the Washington Post and Fortune, the Vast Majority of the Poor Would Gain

By Steffie Woolhandler and David Himmelstein
The Huffington Post, March 4, 2016

In the heat of battling Sen. Bernie Sanders, Hillary Clinton’s camp (and the camp followers at the Washington Post and Fortune magazine) has made a remarkable discovery: National health insurance (aka Medicare-for-All) hurts poor people.

How is that possible? It’s not. But a widely-quoted analysis by Ken Thorpe, a former Clinton administration official, used statistical sleight of hand to zoom in on the tiny slice of the poor who might pay more (while getting better care), and hide the vast majority who would gain.

Here are the real numbers we came up with by analyzing data from the Census Bureau’s 2015 Current Population Survey, the standard source for estimates of income and health insurance coverage.

At present 9.2 million people living in poverty — and 8.8 million just above the poverty line — are uninsured. They often can’t get vital care, and when they do, they face ruinous medical bills. For these 18 million, Medicare-for-All would be a godsend.

Another 10.7 million poor Americans and 21.5 million near-poor have private insurance. For virtually all of them, the new Medicare-for-All taxes would cost less than their current premiums.

Some of this windfall would go directly to families that now pay all or part of their own premiums. The rest would go to employers who now chip in to premiums for the poor and near-poor workers, but most economists believe these gains would be passed on to workers since benefit costs are, in fact, deducted from wages.

About 9.7 million poor and near-poor people have Medicare, without wrap-around private or Medicaid supplements. The vast majority of them would be better off under Medicare-for-All, which would relieve them of Medicare premiums, as well as onerous co-payments and deductibles.

What about the 42 million poor and near-poor Medicaid recipients? This is the group that Thorpe (and recent articles and editorials in the Washington Post and Fortune) claims would be hit hard by the new Medicare-for-All payroll taxes, which their employers would pass on to them by lowering their wages.

Yet, 34.6 million (82 percent) of these 42 million are children, retirees or others who have no earnings. Hence, they wouldn’t pay any new payroll tax.

Two million others earn no more than $7.25 an hour, the minimum wage, so employers couldn’t lower their wages to make up for the new taxes.

Only 3 percent (1.2 million) of poor and near-poor Medicaid recipients earn more than $15 an hour — the minimum wage that Sanders has proposed. That’s the number of poor households at risk of financial losses. But even that overstates how many might be harmed, since some pay out-of-pocket costs that Medicare-for-All would eliminate.

It’s a shame that even this small group might suffer, and we’d recommend that Sen. Sanders tweak his plan to protect them. That shouldn’t be hard.

But his plan would relieve the poor, as well as the middle class, from the daunting co-payments and deductibles that obstruct care and threaten finances. And it would abolish the narrow provider networks that restrict patients’ choice of doctors and hospitals. Instead, Americans could go anywhere for care, a privilege that every Canadian enjoys, but is rapidly vanishing in our country.

In every nation with national health insurance the poor — and middle-class families — fare better than here. They bear less of the health care cost burden, have better access to care, and live longer and healthier lives.

It takes extraordinary mental and rhetorical gymnastics to portray universal health care as bad for the poor. Having mastered that art, perhaps the Clinton team will turn its attention to repealing the law of gravity.

Steffie Woolhandler, M.D., M.P.H, and David U. Himmelstein, M.D., are professors of health policy and management at the City University of New York School of Public Health and lecturers in medicine at Harvard Medical School. The views expressed do not necessarily reflect the views of those institutions.

http://www.huffingtonpost.com/steffie-woolhandler/bernie-sanders-medicare-for-all_b_9385012.html

An Improved Medicare for All system would provide for everyone all necessary health care, and it would be funded with progressive taxes that are fair and affordable for each of us. Using one tentative set of tax policies as an example of how the system could be funded does not change this basic truth.Selected numbers associated with Bernie Sanders’ loosely sketched out Medicare for All proposal have been used to attack the fundamental concept of single payer with no acknowledgement that eventual legislation would ferret out any numbers or assumptions that might be slightly off (though that’s in dispute) and then carefully tune them to get the financing right.

One example, using the widely circulated set of numbers, indicates that some lower income individuals might end up paying more than they do now, though the extent and intensity of the deficits have been exaggerated, as the analysis by Steffie Woolhandler and David Himmelstein shows. The point is that tax policies are quite malleable, with many potential sources and variable rates. They can be adjusted to ensure that taxes would be equitable for all.

Under the tentative Sanders numbers, about 1.2 million lower-income individuals might be slightly worse off financially, but at least they would be insured. Compare that to the 2.9 million adults who are in the ACA coverage gap who remain uninsured – a far worse problem than facing a modest financial imbalance. It would be far easier to adjust the taxes under a single payer system than it would be to fill in the coverage gap resulting from the complex administrative infrastructure created by ACA.

Those who continue to bash the Medicare for All concept based on tentative numbers and then conclude that we should stick with the Affordable Care Act are being disingenuous.

The Medicare for All model only needs fine tuning to meet the goal of health care for all, whereas merely patching the irreparably flawed ACA infrastructure will always leave us short of the goal. We need the right infrastructure, and then we can get them numbers right.

Physicians for a National Health Program (PNHP) is a nonpartisan educational organization. It neither supports nor opposes any candidates for public office.

Healthcare Reform to Make America Great Again

Donald J. Trump for President

As it appears Obamacare is certain to collapse of its own weight, the damage done by the Democrats and President Obama, and abetted by the Supreme Court, will be difficult to repair unless the next President and a Republican congress lead the effort to bring much-needed free market reforms to the healthcare industry.

By following free market principles and working together to create sound public policy that will broaden healthcare access, make healthcare more affordable and improve the quality of the care available to all Americans.

Congress must act. Our elected representatives in the House and Senate must:

1.  Completely repeal Obamacare.

2.  Modify existing law that inhibits the sale of health insurance across state lines.

3.  Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system.

4.  Allow individuals to use Health Savings Accounts (HSAs).

5.  Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals.

6.  Block-grant Medicaid to the states.

7.  Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products.

The reforms outlined above will lower healthcare costs for all Americans. They are simply a place to start. There are other reforms that might be considered if they serve to lower costs, remove uncertainty and provide financial security for all Americans.

https://www.donaldjtrump.com/positions/healthcare-reform

***

Comment:

By Don McCanne, M.D.

As the leading candidate for the Republican nomination for president, we should be aware of Donald Trump’s health policy proposals. His descriptions to date have been vague — replace Obamacare with something terrific, remove the lines around states, and can’t let people die in the streets. Responding to demands for specifics, Trump plays it safe and now releases a brief list of standard recommendations long held by mainstream Republican politicians.

Most of these proposals have been extensively analyzed and would have very little impact on resolving the problems with our health care financing. But repealing Obamacare and using block-grants to reduce Medicaid funding would further impair access to care for millions of Americans. Doesn’t really sound like something terrific.

Trump has said that single payer systems work well in other nations, but his political base is not supportive of such a system here, and so it does not appear on his list of proposed reforms. Once again, politics trumps policy.

Physicians for a National Health Program (PNHP) is a nonpartisan educational organization. It neither supports nor opposes any candidates for public office.

Healthcare Reform to Make America Great Again

Donald J. Trump for President

As it appears Obamacare is certain to collapse of its own weight, the damage done by the Democrats and President Obama, and abetted by the Supreme Court, will be difficult to repair unless the next President and a Republican congress lead the effort to bring much-needed free market reforms to the healthcare industry.

By following free market principles and working together to create sound public policy that will broaden healthcare access, make healthcare more affordable and improve the quality of the care available to all Americans.

Congress must act. Our elected representatives in the House and Senate must:

1.  Completely repeal Obamacare.

2.  Modify existing law that inhibits the sale of health insurance across state lines.

3.  Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system.

4.  Allow individuals to use Health Savings Accounts (HSAs).

5.  Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals.

6.  Block-grant Medicaid to the states.

7.  Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products.

The reforms outlined above will lower healthcare costs for all Americans. They are simply a place to start. There are other reforms that might be considered if they serve to lower costs, remove uncertainty and provide financial security for all Americans.

https://www.donaldjtrump.com/positions/healthcare-reform

As the leading candidate for the Republican nomination for president, we should be aware of Donald Trump’s health policy proposals. His descriptions to date have been vague — replace Obamacare with something terrific, remove the lines around states, and can’t let people die in the streets. Responding to demands for specifics, Trump plays it safe and now releases a brief list of standard recommendations long held by mainstream Republican politicians.

Most of these proposals have been extensively analyzed and would have very little impact on resolving the problems with our health care financing. But repealing Obamacare and using block-grants to reduce Medicaid funding would further impair access to care for millions of Americans. Doesn’t really sound like something terrific.

Trump has said that single payer systems work well in other nations, but his political base is not supportive of such a system here, and so it does not appear on his list of proposed reforms. Once again, politics trumps policy.

Physicians for a National Health Program (PNHP) is a nonpartisan educational organization. It neither supports nor opposes any candidates for public office.

MIPS: The ‘death knell’ for small practices?

By Joseph Burns
Medical Economics, February 25, 2016

Beginning in 2019, the new Merit-based Incentive Payment System (MIPS), which is part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), will raise the focus on physician performance measurement to a new level.

MIPS will replace the Physician Quality Reporting System (PQRS) and CMS will adjust Medicare payments to most physicians either up or down by as much as 9% depending on how well they score in four performance categories: quality, resource use, clinical practice improvement activities, and meaningful use of electronic health records systems. Also, physicians who score extremely high will be eligible for a 27% payment bonus.

Robert A. Berenson, MD, a fellow at the Urban Institute in Washington, DC… is one of the nation’s best-known health policy experts. In the interview below, Berenson elaborates on his views regarding MIPS.

Medical Economics:  You’ve been critical of the measurement approach that CMS and other payers have adopted, and you focus in particular on MIPS. Are you concerned that MIPS will have some unintended consequences, and, if so, what concerns you most?

Robert Berenson:  We lack measures that are core to what is central to the performance we expect from particular specialists. I also have concerns that the approach may compromise physicians’ intrinsic motivation to practice high-quality care for their patients as they respond to specific incentives for particular aspects of performance.

With MIPS, Congress is combining PQRS, Meaningful Use and the value-based modifier. Those were three separate programs that were going to add up to a little more than 2% of a physician’s Medicare payment. But the penalties under MIPS now add up to 9%, with potential gains of 27% for some lucky physicians. They’ve created a whole new formula for how you get either rewards or penalties.

Only about 50% of physicians in private practice today are submitting data for PQRS because of the administrative burden and the lack of respect practicing physicians have for what they are being measured on. But now, the total they stand to lose is only 2% or so. No one can afford to lose 9%, which means MIPS has the potential to hasten the demise of small practices.

ME:  Are you saying that physicians in small practices will get a bonus of 9% and have the potential to get a 27% bonus, but that’s not enough of a financial gain to keep physicians in private practice?

RB:  The problem is that you as a physician would have to either spend money to bring in a consultant to produce the data from your medical records or you would have to use one of the registry options that CMS is offering. Both are resource intensive. Some doctors will say, ‘I’m going to have to be part of somebody’s system because I can’t produce this data.’ That happened to my former practice. Shortly after I left they said, ‘We can’t administer this practice. It’s getting too complicated. We’re just going to sell to a hospital system.’

ME:  By ‘too complicated,’ do you mean physicians don’t have the sophisticated IT systems that they would need to collect and report the MIPS data? They don’t have the staff to do it, and there are too many other demands on their time to do MIPS and still see 20 to 40 patients a day?

RB:  That’s right. The obligations required to submit the data mean they will have to pay someone to do it for them. And we already know that small practices are just getting by and accept much lower payment levels from insurers than large practices do. To get back the 2% lost under PQRS, physicians could see a few more patients each week. But when [the loss is] 9% and the requirements are more complex, that’s a whole different situation.

Included in the same MACRA legislation was a replacement for [Medicare] sustainable growth rate payments but that amounted to only nominal fee increases for the next decade. It’s virtually nothing, meaning physician payment is not keeping pace with inflation and then you have the potential of losing 9% on top of that.

So, we’re talking about the potential loss of payment above 9% and perhaps well into double digits. Look at it this way: because the fee increases aren’t keeping up with inflation, practices will need some bonus income to stay even.

ME:  So if it’s no longer financially viable to operate a small physician practice, then is the only alternative to be acquired by a hospital, health system, or some larger entity, in particular because so many payers are moving to value-based care?

RB:  Yes. That’s how it looks, and there are a lot of people in the insurer and provider worlds who say that the Affordable Care Act and now MACRA are all about bigness, meaning consolidation. I don’t believe that myself. But I believe the MACRA legislation indicates that physicians unwilling to accept the yet unproved value-based payment approaches will take a real hit, and when you combine that hit with all the other trends in the market, then you see all these factors pressuring small practices.

ME:  To play devil’s advocate, is it necessarily bad that many physicians will join larger organizations?

RB:  Well, in essence, we are under-valuing small practices and we now have MIPS which could be the death knell of many small practices. And for what? There’s good evidence from a Health Affairs paper by Lawrence P. Casalino, MD, MPH, PhD, and others that, in fact, the smallest practices had the best performance on avoiding unnecessary hospital admissions. The researchers were surprised because they assumed that you needed systemic processes in place to keep ambulatory care-sensitive admissions down.

But what Casalino and others found is not surprising to me. Those doctors know their patients, and when something’s wrong, they see them or they’re on the phone with them. Then they solve the problem without admitting the patient or sending the patient to the ER, which often guarantees an admission. Conversely, many practices in large health systems don’t know their patients as well. I am not saying small practices do as well on all aspects of care, just that what they do well is often underappreciated.

ME:  You question whether we should even be using the performance measures we currently use.

RB:  At the individual doctor level, I believe — and behavioral economists have said so as well — that pay for performance (P4P) actually often is counter-productive. I’d like to know what impact P4P has before enacting a program like the MIPS. So far the evidence hasn’t shown that the approach improves care. We need to evaluate not only what happens to the measures we incentivize, but what happens to overall care when health professionals are financially incentivized to improve particular aspects of care — the only ones we can measure. It may be that ‘testing to the test‘ is the result.

ME:  So, there’s much work to be done. Is there any hope that Congress or CMS will even be willing to improve the MIPS program and perhaps take up some of these issues?

RB:  Well, MACRA, including MIPS, is the law now. Congress tells CMS to do it and CMS has to implement it. My prediction is we will see an annual review not unlike the SGR ‘doc fix,’ except this one will be easier to pass because there will be little budgetary impact. If there is enough pushback or unintended consequences, we may see a willingness to revisit the program.

http://medicaleconomics.modernmedicine.com/medical-economics/news/mips-death-knell-small-practices

***

URGENT: Explaining MIPS; Action required

By Don McCanne, M.D.
Quote of the Day, March 21, 2015

Yesterday’s Quote of the Day message sounded the alarm on legislation that would replace the flawed Sustainable Growth Rate formula (SGR) for updating Medicare payments with a new Merit-based Incentive Payment System (MIPS) – legislation with strong bipartisan support that will be taken up in Congress this week and is expected to pass.

The SGR formula is considered to be flawed primarily because economic factors considered in the formula would result in inappropriate payment reductions in many of the yearly adjustments. Thus there is consensus that the formula should be repealed. However, it did provide an administratively simple process for trying to keep Medicare rates from increasing well beyond the growth in the economy. That is, there was no administrative burden placed on the providers; they merely had to accept adjustments in their payments.

The concern is over its replacement: MIPS. On reading the summary of the “SGR Repeal and Medicare Provider Payment Modernization Act,” you will see that MIPS places a tremendous administrative burden on health care professionals in a health care system that is already overwhelmingly overburdened with administrative excesses. The only way to escape this additional burden is to participate in Alternative Payment Models (APMs) which, in themselves, create further significant administrative burdens (ACOs, PCMHs, etc.). MIPS is an administrative nightmare.

Under the MIPS payment system, eligible professionals with higher scores will receive positive payment adjustments (and may be eligible for an additional incentive payment). We have observed repeatedly how such systems are gamed in order to receive these extra payments. The problem is that those who do not game the system, and especially those with practice situations and patient populations that make it very difficult to score higher points, will almost automatically receive performance scores below the threshold since their performances will be compared with the gamers. This will result in negative payment adjustments – reducing payments by up to nine percent. If you think SGR is unfair, MIPS robs from these hard-working professionals who are just trying to make the system work for their patients, and gives the spoils to those who likely have consultants to show them how to game the system.

https://www.pnhp.org/news/2015/march/urgent-explaining-mips-action-required

***

Comment:

By Don McCanne, M.D.

Physicians were so relieved to get rid of the sustainable growth rate (SGR) method of adjusting Medicare payments that they seemed to care less about the replacement: the Merit-based Incentive Payment System (MIPS) and the Alternative Payment Models (APMs). They should have cared. Robert Berenson explains why.

After a period of grief, financial stress and burnout, physicians who have not yet bailed out may be ready to push back. Berenson gives us some limited reassurance that since there will not be a huge budgetary impact like there was with repeal of SGR, Congress may be more willing to revisit this legislation. But the protesting physicians had better bring along their pitchforks, just to be sure.

MIPS: The ‘death knell’ for small practices?

By Joseph Burns
Medical Economics, February 25, 2016

Beginning in 2019, the new Merit-based Incentive Payment System (MIPS), which is part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), will raise the focus on physician performance measurement to a new level.

MIPS will replace the Physician Quality Reporting System (PQRS) and CMS will adjust Medicare payments to most physicians either up or down by as much as 9% depending on how well they score in four performance categories: quality, resource use, clinical practice improvement activities, and meaningful use of electronic health records systems. Also, physicians who score extremely high will be eligible for a 27% payment bonus.

Robert A. Berenson, MD, a fellow at the Urban Institute in Washington, DC… is one of the nation’s best-known health policy experts. In the interview below, Berenson elaborates on his views regarding MIPS.

Medical Economics:  You’ve been critical of the measurement approach that CMS and other payers have adopted, and you focus in particular on MIPS. Are you concerned that MIPS will have some unintended consequences, and, if so, what concerns you most?

Robert Berenson:  We lack measures that are core to what is central to the performance we expect from particular specialists. I also have concerns that the approach may compromise physicians’ intrinsic motivation to practice high-quality care for their patients as they respond to specific incentives for particular aspects of performance.

With MIPS, Congress is combining PQRS, Meaningful Use and the value-based modifier. Those were three separate programs that were going to add up to a little more than 2% of a physician’s Medicare payment. But the penalties under MIPS now add up to 9%, with potential gains of 27% for some lucky physicians. They’ve created a whole new formula for how you get either rewards or penalties.

Only about 50% of physicians in private practice today are submitting data for PQRS because of the administrative burden and the lack of respect practicing physicians have for what they are being measured on. But now, the total they stand to lose is only 2% or so. No one can afford to lose 9%, which means MIPS has the potential to hasten the demise of small practices.

ME:  Are you saying that physicians in small practices will get a bonus of 9% and have the potential to get a 27% bonus, but that’s not enough of a financial gain to keep physicians in private practice?

RB:  The problem is that you as a physician would have to either spend money to bring in a consultant to produce the data from your medical records or you would have to use one of the registry options that CMS is offering. Both are resource intensive. Some doctors will say, ‘I’m going to have to be part of somebody’s system because I can’t produce this data.’ That happened to my former practice. Shortly after I left they said, ‘We can’t administer this practice. It’s getting too complicated. We’re just going to sell to a hospital system.’

ME:  By ‘too complicated,’ do you mean physicians don’t have the sophisticated IT systems that they would need to collect and report the MIPS data? They don’t have the staff to do it, and there are too many other demands on their time to do MIPS and still see 20 to 40 patients a day?

RB:  That’s right. The obligations required to submit the data mean they will have to pay someone to do it for them. And we already know that small practices are just getting by and accept much lower payment levels from insurers than large practices do. To get back the 2% lost under PQRS, physicians could see a few more patients each week. But when [the loss is] 9% and the requirements are more complex, that’s a whole different situation.

Included in the same MACRA legislation was a replacement for [Medicare] sustainable growth rate payments but that amounted to only nominal fee increases for the next decade. It’s virtually nothing, meaning physician payment is not keeping pace with inflation and then you have the potential of losing 9% on top of that.

So, we’re talking about the potential loss of payment above 9% and perhaps well into double digits. Look at it this way: because the fee increases aren’t keeping up with inflation, practices will need some bonus income to stay even.

ME:  So if it’s no longer financially viable to operate a small physician practice, then is the only alternative to be acquired by a hospital, health system, or some larger entity, in particular because so many payers are moving to value-based care?

RB:  Yes. That’s how it looks, and there are a lot of people in the insurer and provider worlds who say that the Affordable Care Act and now MACRA are all about bigness, meaning consolidation. I don’t believe that myself. But I believe the MACRA legislation indicates that physicians unwilling to accept the yet unproved value-based payment approaches will take a real hit, and when you combine that hit with all the other trends in the market, then you see all these factors pressuring small practices.

ME:  To play devil’s advocate, is it necessarily bad that many physicians will join larger organizations?

RB:  Well, in essence, we are under-valuing small practices and we now have MIPS which could be the death knell of many small practices. And for what? There’s good evidence from a Health Affairs paper by Lawrence P. Casalino, MD, MPH, PhD, and others that, in fact, the smallest practices had the best performance on avoiding unnecessary hospital admissions. The researchers were surprised because they assumed that you needed systemic processes in place to keep ambulatory care-sensitive admissions down.

But what Casalino and others found is not surprising to me. Those doctors know their patients, and when something’s wrong, they see them or they’re on the phone with them. Then they solve the problem without admitting the patient or sending the patient to the ER, which often guarantees an admission. Conversely, many practices in large health systems don’t know their patients as well. I am not saying small practices do as well on all aspects of care, just that what they do well is often underappreciated.

ME:  You question whether we should even be using the performance measures we currently use.

RB:  At the individual doctor level, I believe — and behavioral economists have said so as well — that pay for performance (P4P) actually often is counter-productive. I’d like to know what impact P4P has before enacting a program like the MIPS. So far the evidence hasn’t shown that the approach improves care. We need to evaluate not only what happens to the measures we incentivize, but what happens to overall care when health professionals are financially incentivized to improve particular aspects of care — the only ones we can measure. It may be that ‘testing to the test‘ is the result.

ME:  So, there’s much work to be done. Is there any hope that Congress or CMS will even be willing to improve the MIPS program and perhaps take up some of these issues?

RB:  Well, MACRA, including MIPS, is the law now. Congress tells CMS to do it and CMS has to implement it. My prediction is we will see an annual review not unlike the SGR ‘doc fix,’ except this one will be easier to pass because there will be little budgetary impact. If there is enough pushback or unintended consequences, we may see a willingness to revisit the program.

http://medicaleconomics.modernmedicine.com/medical-economics/news/mips-death-knell-small-practices

***

URGENT: Explaining MIPS; Action required

By Don McCanne, M.D.
Quote of the Day, March 21, 2015

Yesterday’s Quote of the Day message sounded the alarm on legislation that would replace the flawed Sustainable Growth Rate formula (SGR) for updating Medicare payments with a new Merit-based Incentive Payment System (MIPS) – legislation with strong bipartisan support that will be taken up in Congress this week and is expected to pass.

The SGR formula is considered to be flawed primarily because economic factors considered in the formula would result in inappropriate payment reductions in many of the yearly adjustments. Thus there is consensus that the formula should be repealed. However, it did provide an administratively simple process for trying to keep Medicare rates from increasing well beyond the growth in the economy. That is, there was no administrative burden placed on the providers; they merely had to accept adjustments in their payments.

The concern is over its replacement: MIPS. On reading the summary of the “SGR Repeal and Medicare Provider Payment Modernization Act,” you will see that MIPS places a tremendous administrative burden on health care professionals in a health care system that is already overwhelmingly overburdened with administrative excesses. The only way to escape this additional burden is to participate in Alternative Payment Models (APMs) which, in themselves, create further significant administrative burdens (ACOs, PCMHs, etc.). MIPS is an administrative nightmare.

Under the MIPS payment system, eligible professionals with higher scores will receive positive payment adjustments (and may be eligible for an additional incentive payment). We have observed repeatedly how such systems are gamed in order to receive these extra payments. The problem is that those who do not game the system, and especially those with practice situations and patient populations that make it very difficult to score higher points, will almost automatically receive performance scores below the threshold since their performances will be compared with the gamers. This will result in negative payment adjustments – reducing payments by up to nine percent. If you think SGR is unfair, MIPS robs from these hard-working professionals who are just trying to make the system work for their patients, and gives the spoils to those who likely have consultants to show them how to game the system.

https://pnhp.org/news/2015/march/urgent-explaining-mips-action-required

Physicians were so relieved to get rid of the sustainable growth rate (SGR) method of adjusting Medicare payments that they seemed to care less about the replacement: the Merit-based Incentive Payment System (MIPS) and the Alternative Payment Models (APMs). They should have cared. Robert Berenson explains why.

After a period of grief, financial stress and burnout, physicians who have not yet bailed out may be ready to push back. Berenson gives us some limited reassurance that since there will not be a huge budgetary impact like there was with repeal of SGR, Congress may be more willing to revisit this legislation. But the protesting physicians had better bring along their pitchforks, just to be sure.

Slavitt: Health Care ‘Retailization’ Is Coming

By Dan Diamond
Politico Pulse, March 1, 2016

Speaking at the Federation of American Hospitals annual meeting on Monday, CMS acting administrator Andy Slavitt invited providers to join the agency’s ongoing push for the “retailization” of health care.

“A retail strategy calls on you to imagine you are negotiating directly with a cash paying consumer who used to be a source of bad debt — except one who now has the wherewithal to pay for services and wants to build a relationship where they can also find elective, outpatient and wellness services,” Slavitt said. He went on to elaborate about the need for further price and billing transparency in health care — just like in other consumer markets.

http://www.politico.com/tipsheets/politico-pulse/2016/03/cms-issues-final-marketplace-rule-slavitt-health-care-retailization-is-coming-why-no-medicaid-expansion-in-south-dakota-this-year-212964

***

Comment:

By Don McCanne, M.D.

Yesterday, at the annual meeting of the Federation of American Hospitals, Acting CMS Administrator Andy Slavitt asked the for-profit hospitals to join CMS’s ongoing push for the “retailization” of health care.

Retailization? Providers should imagine negotiating with cash paying consumers. They should strive for “further price and billing transparency in health care — just like in other consumer markets.”

Could there be a more explicit advocacy of consumer-driven health care – placing the patient-consumer in charge of health care spending? It fits with CMS’s efforts to privatize Medicare by over-paying the private Medicare Advantage plans, with overtures to convert Medicare to a premium support (voucher) market of private plans.

Politics? This is coming from an administration headed by a Democrat – a neoliberal administration that has been mislabeled as progressive – and supported by a presidential candidate who rejects Medicare for All and wants to build on Obamacare with its high deductible private health plans that place the patient-consumer in charge.

Retailization. Watch out, here it comes!

Slavitt: Health Care ‘Retailization’ Is Coming

By Dan Diamond
Politico Pulse, March 1, 2016

Speaking at the Federation of American Hospitals annual meeting on Monday, CMS acting administrator Andy Slavitt invited providers to join the agency’s ongoing push for the “retailization” of health care.

“A retail strategy calls on you to imagine you are negotiating directly with a cash paying consumer who used to be a source of bad debt — except one who now has the wherewithal to pay for services and wants to build a relationship where they can also find elective, outpatient and wellness services,” Slavitt said. He went on to elaborate about the need for further price and billing transparency in health care — just like in other consumer markets.

http://www.politico.com/tipsheets/politico-pulse/2016/03/cms-issues-final-marketplace-rule-slavitt-health-care-retailization-is-coming-why-no-medicaid-expansion-in-south-dakota-this-year-212964

Yesterday, at the annual meeting of the Federation of American Hospitals, Acting CMS Administrator Andy Slavitt asked the for-profit hospitals to join CMS’s ongoing push for the “retailization” of health care.Retailization? Providers should imagine negotiating with cash paying consumers. They should strive for “further price and billing transparency in health care — just like in other consumer markets.”

Could there be a more explicit advocacy of consumer-driven health care – placing the patient-consumer in charge of health care spending? It fits with CMS’s efforts to privatize Medicare by over-paying the private Medicare Advantage plans, with overtures to convert Medicare to a premium support (voucher) market of private plans.

Politics? This is coming from an administration headed by a Democrat – a neoliberal administration that has been mislabeled as progressive – and supported by a presidential candidate who rejects Medicare for All and wants to build on Obamacare with its high deductible private health plans that place the patient-consumer in charge.

Retailization. Watch out, here it comes!