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2016 Healthcare Town Hall

The Healthcare Blog - Wed, 04/27/2016 - 12:44

BY THE EDITORS

THCB is pleased to introduce the 2016 Healthcare Town Hall, a special online feature brought to you in partnership with Health Catalyst. This is an experiment. The idea is to open up an ongoing dialogue around the issues that are transforming healthcare in the second decade of the 21st Century.  From where you stand, what are the biggest problems facing healthcare today? What aren’t we talking about enough? What are the opportunities? We want to hear your ideas. On the national level, if you could direct a question to one of the Presidential candidates about their healthcare policies what would it be?

We’re kicking things off with an online panel featuring THCB Editor John Irvine and the HealthCatalyst leadership including Dale Sanders, John Haughom and Bryan Oshiro. 

John Irvine: Let’s start with the recent decision at CMS to transition from the Meaningful Use the program to a new program that will be a component of MACRA.  A lot of people were extremely surprised with the news that Meaningful Use is going away. The follow up development, of course, is that CMS has agreed in principle to a new set of core clinical quality measures that will change the way doctors are evaluated. I’m hearing a lot of positive feedback about the Meaningful Use decision. Reactions?

Dale Sanders: I was surprised, yes. As I think you know, I’ve spent a lot of time in Washington. I know how government works. People in government generally do not reverse themselves, unless it is very clear that there is no other available option. That’s Washington 101. Read into that what you will.  It’s far easier to allow a program to keep on going than to admit that something isn’t working or that it has outlived it’s usefulness. I think a lot of people are missing the fact that It took political courage to do that.  I will say that I was one of the first to publicly call for the suspension of Meaningful Use, and you guys posted the blog that I wrote about it. At Northwestern, we published a one page policy entitled, “Principles of EMR Utilization” that was written and endorsed by our physicians, facilitated by me when I recognized that our EMRs were being used for little more than a multi-million dollar word processor. That one-page document is all we needed to achieve the same concepts as Meaningful Use. The last time I counted, the Meaningful Use regulations totaled over 350 pages. In typical fashion, the government turned a good concept into a mess. So, I’m cautiously optimistic that we are going to return to common sense.

Bryan Oshiro:  The intent of Meaningful Use was noble.  However, it placed a great deal of burden on physicians.  Who would not want to use technology to improve quality, safety, efficiency, and coordination of care for the purposes of improving the health of the population.  At the same time, Meaningful Use incentives made it easier for doctors to afford the transition to purchasing a technological solution.  It was also helpful that the implementation of this transition  was staged.  The first stage concentrating on data capture and data sharing.  However, this goal was only partially met.  Indeed, the medical information was being captured electronically, but there was no standard way of inputting the information and therefore analyzing this information to improve patient care was difficult to do.  Furthermore, data sharing was made more difficult due to the fact that there was no incentives for interoperability between systems.  There was enough angst and push back that there was a reconsideration to get away from  regulating a way to get to improved outcomes as outlined in stage 3. The unintended consequence was the increased time and workload burden that was placed on physicians.  

John Haughom: On the other hand, a lot of people would say yes, we spent a lot of money and sure there were some problems, but in the end we got where we wanted to go. The EHR adoption numbers have shifted dramatically. Since 2008, they’re up from 9% to nearly 60%.  

John Irvine: That’s true. It’s a very impressive jump. There’s clearly a lot of potential. I think that’s why people are so frustrated. This is not unimportant stuff.  There are so many cool things we can be doing here.

Bryan Oshiro:  Clearly things were not working as expected and something had to change.  I was encouraged from what Karen DeSalvo, acting assistant secretary for health and Andy Slavitt, acting administrator for CMS said at HIMSS. Clearly there is a renewed focus on interoperability.  This will be good for physicians, hospital systems and patients.  However, the issue of usability needs to be addressed.  The EMRs are still not easy to use.  Ordering medications is very cumbersome.  Navigation is not easy.  The EMR still adds an increased burden on a physician’s time.  And, it has not improved the physician-patient interaction.We are paying more attention to the computer screen and not on the patient.

Dale Sanders: Allow me to rant.

John Irvine: Please rant.

Dale Sanders: This is the sort of thing that makes sense on paper if you’re a bureaucrat sitting in Washington and never works in the real world. We have 20-something kids with brilliant IQs and wonderful intent, but no real world experience writing all of these regulations. “Oh yeah, sure that makes sense, we’ll do that. We’ll incentivize them. And then we’ll measure how well they’re doing. And yeah, it’ll be great.” And it doesn’t work out that way. And everybody stands around scratching their head wondering why it isn’t working? There’s a reason that EHRs didn’t sell on their own and required federal money to create the demand. Their value to efficiency, quality, and cost of care is simply not compelling, yet.

John Haughom: So true. That’s why I’m excited. And why I think it’s important that we move on. There’s so much potential.

John Irvine:  So, the future of MACRA. We now know a lot more about what’s up ahead than we did. Last month CMS announced core clinical quality measures in key areas, the idea being that the quality improvement process needs to be streamlined.  What can we expect to see from Washington? Are you cynical? Cautiously optimistic? Any thoughts? More to the point, what do you think we need to see?

Dale Sanders:  I’m pleased that meaningful use is going through an evolution, but having been in this game for a long time I tend to be on the skeptical side. How many quality metrics are we tracking now? There are 1,958 quality metrics in the national clearinghouse and only 7% of those have anything to do with patient outcomes. The rest are process measures, not quality measures. We are measuring what docs do, not what they achieve for patients, believing that reducing variability in process will inherently lead to a good outcome. But I could care less how physicians achieve a good outcome for me, as long as they are ethical and affordable; it’s the outcome that matters. We’ve gone nuts with measures that don’t really matter and actually alienate physicians’ sense of purpose and autonomy.

John Irvine: What do you make of the core quality measures?

Dale Sanders: As I mentioned earlier, we are not measuring quality. We are measuring processes and variability, with the assumption that reducing variability in processes will lead to better outcomes. There is some truth to that assumption, but if you think about it, personalized medicine is the antithesis of standardized medicine. We should throw all of the process and quality measures away, replace them with patient reported outcomes, and make those publicly transparent, because outcomes are all that matter. Let physicians and organizations figure out whatever process they want to use to achieve great outcomes, both clinically and financially.

Bryan Oshiro: I think we need to look very closely at what quality measurements we’re rolling out and what we’re asking of people. It’s clear that we’re asking a lot from people.

John Irvine: Sure. Bob Wachter, who is a guy a lot of people look to for leadership in this area,  had an opinion piece in the New York Times recently that basically made the point you’re making, which is that the measurement thing has gotten a little out of hand, we have to be a little more selective, perhaps a little more thoughtful about what we do with measurement. What matters? What doesn’t?

John Haughom: This is the way doctor politics work. I’ll tell you what people respond to.  They respond to things that are meaningful to them.  We need to give them data that is meaningful to them. Then they’ll get excited.

Chris Keller: We’ve done a lot of work at HealthCatalyst around this. I was part of a team that went to Europe this summer and talked to a lot of really prominent people doing work with quality measurement, which was a pretty great introduction to the field. We like the idea of user-driven quality metrics. If I’m a patient, what’s important to my life? If I’m a doctor, what matters to me?  How are my patients doing? How are my colleagues; patients doing? A lot of this stuff that matters to patients just doesn’t get measured in the medicine of today. I think we are on the cusp of seeing that change for the better with some of the interesting work being done by ICHOM and others to measure outcomes that patients care about.

John Irvine: That’s how you get people involved.

John Irvine: If there was a story of the year in health IT 2015, it was probably physician dissatisfaction with electronic health records.  The electronic health records industry has taken a lot of heat for producing products that frustrate users and that lack innovation. Do you see a light at the end of the tunnel?

Bryan Oshiro: Usability is a huge issue for not only physicians, but any health care team member.  There are some companies that have niche products that work well.  However, the industry as a whole has to fundamentally change the way their EMRs are designed.  

John Irvine: What is needed in your view?

Bryan Oshiro: Functionality is key.  A system should be highly intuitive to use.  Put the most relevant information right in front of me, at the right time, in the right place, and the proper context.  The system should also allow me to communicate information to other relevant team members.  The same information should not have to be repeatedly entered by a nurse, doctor, receptionist, etc.  Decision support tools should be easy and simple to use and be contextual.  The care team should be able to partner with patients in their own care.  Thus, there is a huge need to build systems that incorporate the patient into the system.  Messaging, alerting of potential problems, reminders, questions should easily flow between patients, providers and the care team.

Dale Sanders: We violated every law of common sense when we used $30B in federal money to stimulate the uptake of today’s EHRs. Imagine what would have happened if we dangled just $1B of that in front of modern software engineers in a winner-take-all competition to build a compelling, new generation EHR. The reason that physicians and healthcare systems didn’t buy EHRs with their own money is because the current design of EHRs adds little or no value to a physician’s ability to apply their skills in the best way possible, or engage patients in their own care. The entire industry sunk money into products that most physicians don’t want and we are going to live with the consequences of that multi-billion dollar decision for at least 10 years. In the meantime, there will be a new generation of EHR emerge that will finally offer what the industry needs.

Bryan Oshiro: I am starting to hear talk about all kinds of cool stuff. Lots of stuff that’s coming out for the iPad on the visual representation side. Things that people are doing to reduce the information overload, give people better hands on their data, to communicate with other members of the care team.  One of the things I’d like to get out of this exercise, I’d personally like to hear what people are using. I’d also like to hear what they want to be using.

John Irvine: I’d like each patient’s screen to be customizable, so I see the information I need. It’s going to be different each time, you know.  And tags. Something to allow me to order the information I’m dealing with in the way my brain works. Not the way a developer sitting in a cubicle works. I think essentially what you need is something that’s something like an CRM system. This is patient relationship management, after all.   

Dr. Mitra: I like that term, because it really is the doctor patient relationship we’re talking about.

Bryan Oshiro: One of the things we’re hoping to accomplish with this conversation is learn a little bit about what people are doing. What new tools they’re using. What they think the next generation of tools should look like.  This is the kind of conversation the internet is perfect for.

John Haughom: If I were a young physician today, I’d be thinking about ways to create tools to help physicians work with live data. Give people access to data that they can use in real time. Then they’ll get excited.

John Irvine: I agree. If I’m a young doctor coming up today, I thinking about all of the data in my EHR and I’m salivating. Man, give me better tools. Let me get creative.

Dale Sanders: That’’s something we already do at HealthCatalyst, to an extent. We go in and we teach people how to think about data. We call it data literacy. How to tell good data from bad, how to get a team together and understand what you have and what you can do with it. A lot of people are making really basic mistakes that limits their data’s value or distorts their findings — which obviously can be a dangerous thing. We do a lot of work around data literacy.

John Irvine: As you look in the world in 2016, what do you see? What are people thinking? What’s on doctors minds?  What are young doctors thinking? Are things starting to shift after a couple of years that saw a pessimism?

John Haughom: I think we’re starting to see the light at the end of the tunnel. People are starting to adjust. They’re getting it.

Bryan Oshiro: One word. Uncertainty. People are wondering what’s coming next.  

John Irvine: What are they talking about?

Bryan Oshiro: Meaningful Use was a big  issue. Physician reimbursement is also a major concern for us.  Repealing the SGR was huge.  But we’ll have to see what the payment reform components to MACRA is going to look like and how that will affect the way the we practice medicine.  Again, the intent is good.  It’s really going to be in the execution.  But, we still live in an uncertain world.  Depending on who is going to be governing, it may bring about significant changes to health care law.  What’s going to happen with the Affordable Care Act? We’ll have to wait and see after the elections.

Bryan Oshiro: Ha. Exactly! Exactly. Just tell me I can handle it. What I hear around the country is that this has all been a distraction, people want to get back to work. But if you tell me the Affordable Care Act may go away and we may have to do this all over again. Well, then that’s another story. That’s a pretty scary thought.

John Irvine: Which brings us to the very large elephant in the room. The 2016 Presidential election.  Many of the Republicans are pledging to repeal and / or replace the Affordable Care Act. That’s going to be very hard to do.  But there are a lot of people who think that if we have a Republican in the White House things could get very interesting.

Dale Sanders: That’s an understatement. The Affordable Care Act has major problems, no doubt about it, but it’s not going to be repealed. Too many voters are benefiting from it. But, it should be reengineered, and it should focus much more on changing the economic model of healthcare in the US that encourages so much waste. If the US government would act like the world’s largest healthcare customer instead of the world’s largest healthcare government, we’d be much better off.

John Haughom: I think doctors are used to this. There’s always something. I suspect it will have a lot to do with how the election plays out. If we get to summer and we’re in a horse race, I think people will start paying real attention.

Categories: OIG Advisory Opinions

The ACO Delusion

The Healthcare Blog - Mon, 04/25/2016 - 12:04

Accountable care organizations (ACO’s) promise to save us.  Dreamed up by Dartmouth’s Eliot Fisher in 2006, and signed into law as a part of the Patient Protection and Affordable Care Act (PPACA) in 2010, we have been sold on the idea that this particular incarnation of the HMO/Managed Care will save the government, save physicians and save patients all at the same time.  I dare say that Brahma, Vishnu and Shiva together would struggle to accomplish those lofty goals.  Regardless of the daunting task in front of them, the brave policy gods who see patients about as often as they see pink unicorns, chose to release the Kraken – I mean the ACO – onto an unsuspecting public based on the assumption that anything was better than letting those big, bad, test ordering, hospital admitting, brand name prescribing  physicians from running amuck.

I realize I am being somewhat harsh towards the creators of the ACO morass.  But, while they all may be well-meaning, hard-working folks that own a Harvard crimson sweater, their intent is to fundamentally change how health care is provided – this mandates a withering evaluation.  As Milton Friedman aptly said, “One of the great mistakes is to judge policies and programs by their intentions rather than their result.”  Thus, with little regard to intent, and with an eye on the end result, I say unequivocally : ACO’s do not work.

I didn’t need big data to come to this conclusion.  It came to me as I reviewed the details of an ACO commercial agreement that offered an extra $4 per patient per month for successful care coordination combined with the delivery of an as yet undefined high value care metric.  The high priests that are only moved by mountains of evidence will look askance at statements like this because anecdotes like this have no real currency. The data, they preach, will cleanse, purify, and speak the truth. Small problem … the early results are in … and shocking no one who actually does care coordination, the results are not good.

Getting results on ACO’s is not easy – ask Kip Sullivan.  Apparently, the smartest guys in the room who came up with ACO’s designed a construct that is so complex, assessing their effectiveness may require building a large hadron collider.   The vehicle set in place by the ACA to provide for ACOs is the Medicare Shared Savings Program (MSSP).  This program allows provider organizations (ACO’s) to share in savings with Medicare if spending is kept below a financial benchmark.  The details of how the financial benchmarks are set up are somewhat opaque, but essentially amount to Medicare using a pre-ACO-contract-initiation period to arrive at a spending average baseline.  Year over year changes in cost per beneficiary are then compared to the national average medicare spending growth.  ACO’s that come in under the national average Medicare spending growth rate get to keep 50% of the savings that accrue to Medicare.  Based on these benchmarks the Center for Medicare and Medicaid Services (CMS) announced last year that in 2014 ACO’s saved $411 million dollars.

There is, however, a significant problem with this approach.  ACO’s are generally regional, and Medicare spending patterns vary widely by zipcode.  It is not the best idea to compare ACO’s in regions with high cost growth to national spending growth patterns.  A much more valid comparison would be to compare ACO costs with non-ACO costs within the same region.  This is exactly what authors of a recent study in the NEJM attempted to do.

The authors looked at the medicare claims and enrollment database to calculate spending per medicare beneficiary by region in ACO patients and non-ACO patients.  They examined ACO’s based on when they began (2012, or 2013), and looked at 2013 spending average data.

The grand total savings per beneficiary in the group of ACO’s that joined in 2012 was $144 (- 1.4%).  ACO’s that joined in 2013 saved $3.  To rub salt in the wounds, there was also no real difference seen in ‘high value’ care provided to patients (hospitalizations, 30 day readmissions).  I hedged on the differences in high value care when I probably shouldn’t have – the ACO folks did get their LDL checked more often – yes, that was a metric of high quality care.  The savings estimated for the 2012 ACO group was $238 million dollars, but unfortunately, there was no net savings because Medicare paid $244 million in bonuses to ACO’s.  The study also gave no dollar value to the cost of setting up the ACO – one assumes someone is paying for that?  The only silver lining I could find in the study was a subset analysis that showed significantly greater savings for independent primary care groups compared to groups integrated with hospitals.

To summarize:

  • ACO’s that joined in 2012 demonstrated savings of $144/beneficiary
  • ACO’s that joined in 2013 saved $3/beneficiary
  • There was no meaningful difference in value delivered to patients within ACOs
  • There were no net savings to Medicare after accounting for bonus payments paid to ACO’s
  • ACO’s that consisted of primary care physicians saved significantly more money than groups integrated with hospitals

This early data should give policy makers pause.  This was not a positive study, and it importantly re-enforces some significant concerns for physicians that are at the tip of the health care delivery spear.  These concerns may be difficult to comprehend to the folks making decisions at one thousand feet… so allow me to take you to ground zero.

Ground Zero: The Story of Mrs. K  

I received a message Saturday morning from my answering service.  Mrs. K wanted to speak to me.  I happen to be Mrs. K’s third cardiologist.  I met her 2 weeks ago.  She had gained 20 pounds over the last 3 months, had a kidney transplant, severe aortic stenosis and had a systolic blood pressure that stubbornly stayed above 200mmHg.  She had shortness of breath just getting out of bed to go to the bathroom, and my fingers sunk in to her legs as if they were a memory foam mattress.  It didn’t take me long to discover why I was her third cardiologist.  She refused to listen to any of my suggestions, and went on to discount the reasonable suggestions of her prior cardiologists. She had a ‘reaction’ to almost every medication I suggested, and she decided on a daily basis if she would take the medicines that were prescribed to her.  It took a combination of cajoling and threatening to finally have her trust me enough to come into the hospital.  It took even more convincing – sometimes on a twice daily basis – in the hospital to get her to take the medications as prescribed.  She improved markedly and was able to be discharged.  Of course, this was just the start of our relationship.  My office reached out almost every day to check her weights, and to re-enforce the need to take her medications.  I called her back on Saturday, and listened, sometimes impatiently, while she relayed to me her feeling of chills that were definitely due to the pills I was administering.  I tried to reassure her and implored her to stay the course.

I guess this is called care coordination.  I just call it taking care of a patient. It is too early to know what will happen to Mrs. K.  A hot dog’s worth of sodium may be enough to have her end up in the hospital again. Beyond the somewhat inconsequential debate about whether or not the patient would be attributed to me in a way that would allow me to share in some cost savings is the larger point that I could care less if Mrs. K was within an ACO or not.  The ACO, in its current incarnation, does nothing to help me take care of Mrs. K.  Those millions of dollars to the ACO’s?  If  your patient belongs to a hospital-run ACO, most of the Medicare cost savings do not end up with the physicians in charge of delivering high value care at a reduced cost.  Let’s take my regional ACO – 30% of savings go to the ACO, 30% to those investing in the ACO (hospitals), and 40% to physicians.  Any wonder that $4 per month is what’s left over after everyone has taken their cut?

I think the biggest sin the ACO’s commit is to distract from any real conversation about cost.  There is plenty of cost savings to be had within the current construct, but we the public (Jim Purcell explores this well in his recent article) don’t want to make hard choices.  We are a wealthy society, and a wealthy society prizes its health.  In India, a rise in the price of onions is cause for rioting.  In the great United States, suggesting mammograms not be covered until age 50 may result in charges of misogyny by liberals, and charges of fascist death panels by Palin republicans.  Even the interventions that wouldn’t cost the public anything sit behind walls guarded by special interests.  Currently, a significant pay differential exists between services provided by hospital-based outpatient departments (HOPD) and freestanding, physician-owned clinics.  This means that the same echocardiogram provided in the same venue by the same people is many times more expensive if a hospital owns the clinic.  This is not a secret.  The Medicare Payment Advisory Commission (MEDPAC) has advised Medicare of this no-sense differential every year since 2012.  Hospitals have resisted attempts to cut this vociferously, and successfully.  But never you mind – just remember – the ACO will save us.

Anish Koka is a cardiologist based in Philadelphia.

Categories: OIG Advisory Opinions

A Spoonful of Inequality Helps the Medicine go Down

The Healthcare Blog - Sun, 04/24/2016 - 12:32

The conventional wisdom in the circles I hang out in – pro-Hillary, morally conscious,happy bunnies who pretend to enjoy French wine and opera – is that the greatest scourgeon humanity after the bubonic plague is inequality of wealth. They worship Pope St. John Paul Piketty and canonize Archbishop Paul Krugman. Not only is inequality bad for its own sake, they say, it makes people ill, like medically ill.

Their premise always struck me as specious. I once took them through a thought experiment. Imagine, I said, you time travel to the Bengal famine. There was a lot of equality then – people were equally malnourished. Everyone’s ribs protruded equally because of muscle wasting from marasmus. The loss of protein from kwashiorkor made sure everyone’s belly popped out without prejudice. Starvation because of poverty is a great leveler. It cares little about gender, caste or religion. It is non-judgmental.

You say to a starving Bengali: “I have a solution. It’ll give you food, occasional shelter, internet and a mobile phone.But here’s the catch. An ostentatious billionaire called Mukesh Ambani will own the most expensive house in the world, and because you’ll be reminded of his house, you might feel like crap. You’ll live longer, be well fed, perhaps overfed, but will feel like crap when you see someone driving a Mercedes. Want it? It’s called capitalism.” I suspect the starving Bengali might say “hell yes, please bring on inequality. I want food. I don’t give a damn about Ambani.”

Inequality affects tenured Ivy League professors, not rickshawallahs in India. You can understand why. It’s painful for the professor to sit in airline’s economy class drinking Chivas Regal Red Label (it’s hideous, BTW), whilst the undeserving 1 % drink Blue Label in business class. The rickshawallah in India doesn’t suffer from the maladies of the almost hyper affluent.

The response to my thought experiment was “yeah, yeah.” I was dismissed as a ranting, remorseless Scrooge. A landmark study by an economist, Raj Chetty, in JAMA will give me the “told you so” satisfaction. The study looked at income and life expectancy. The richest 1 % males live, on average, 15 years more than the poorest 1 % males.

This isn’t surprising, but the researchers found more. They found that the life expectancy of the poor depended,not on the degree of income inequality perse, but where the poor lived. The plot thickens….

The poor who live near neighborhoods (commuting zones) with highest life expectancies – i.e. affluent neighborhoods – live longer than the poor who live near neighborhoods of the lowest life expectancies. The poor live longer in New York than Detroit.

Let me repeat: the poor who live near the rich live longer.Get it? Those who stare at that carcinogen called inequality live longer than those who don’t.

The study decimates a narrative pervasive in medical and public health circles, which has escaped scrutiny because it is camouflaged by nobility – inequality (relative poverty) leads to ill health.

Mistaking morality for signal is an easy trap to fall into. And, to be fair, Chetty eats all ideologues for breakfast. After reading Chetty’s study, in Bayesian speak, everyone should update their priors, and have a new posterior. He has renewed my faith in health economists without whom moralizers, proselytizers and supply side Laffer curvers will run healthcare amok with their agenda-driven dodgy theories.

Chetty finds that life expectancy for the poor doesn’t correlate with access to medical care. Which means that the primary reason the poor are dying sooneren masseisn’t because they can’t access the emergency rooms on time, or because they lack insurance. Sorry Obamacare.

The study vindicates the objection to using life expectancy as a metric for quality of medical care when comparing the US with other industrialized nations, since life expectancy for populations is barely affected by quality of medical, such as ICU and trauma, care.

The rising tide lifts all boats, even though the tide lifts some boats more than others, and some not at all. Shetty found that the rich aren’t just getting richer but becoming more immortal. Between 2000 and 2014 the top 5 % gained 3 years of life expectancy and the bottom 5 % gained piddles. In some areas people have a lower life expectancy in 2014 than they did in 2000. So much for trickle-down economics, which, BTW,should join the flat earth society.

Why are the poorest 1 % not living as long as the richest 1 %? The easy answer is “habits.” The rich have different, life-enhancing, habits. They don’t smoke. They drink in moderation, and exercise. Conservatives might say the rich make better choices. But that answer is as pathetically naïve as blaming inequality. Habits don’t arise from thin air. It’s easier cycling when you have a bike path than when dodging bullets. Bike paths are more common in or near affluent neighborhoods. Affluent? There you go – it’s inequality all over again.

Bike paths are necessary, not sufficient. The will to ride bikes must exist. That will is driven by habit, but also by hope – hope about the future. Hope needs aspiration. To induce aspiration you need education – proper schools – and jobs.Incidentally, Chetty found no correlation between life expectancy for the poor and unemployment, but my prior about the necessity of jobs is so strong that I’ll just ignore that finding.

What’s the policy solution? It lies in the ideology of the beholder. The tirelessly moralistic Vox is still tediously harping on about inequality. Let me state, in no order of prejudice, what won’t help the poor much: more hospitals, bicycle helmets, screening, millennials fretting about names associated with historical wrong doing, and occupying Wall Street. Sorry social justice warriors – all of that righteous rage may have been for naught.

This is speculative. The problem is absolute, not relative poverty. The poor need an infrastructure of hope. They need schools with quality teachers. They need public parks. They need the government to invest in public works to create jobs. There are three reasons to connect the entire US with rail: jobs, jobs and jobs. They need the rich not to be segregated in enclaves where they self-flagellate about inequality, whilst drinking Dom Perignon and discussing chess camps for little Raj and ballet classes for little Rashmi. They need the rich to be living near them and not inside gentrified zip codes. They need the rich to use the same supermarkets, drink in the same pubs, eat at the same salad bars,and send their kids to the same schools.

The right, cheer lead by the metronomically one-sided Wall Street Journal, must be intellectually honest about taxation, and support public works and education. They have opposed higher taxes by appealing to the negative undertones of redistribution, and to theories which are partially, very partially, accurate such as the Laffer curve.

The poorest 1 % Americans live to 72 years which is, of course, longer than people in the Caucuses lived during Genghis Khan’s reign of terror, but no longer than war-stricken Sudanese. Hardly American exceptionalism.

Neither is equality good for its own sake nor is inequality bad for its own sake. Inequality is a consequence, not a cause. Inequality is bad if society becomes ossified – like a caste system – which America is becoming for reasons more complex than income disparities. The poor must be able to get on the conveyor belt to better opportunities. Don’t demonize the destination. Fix the conveyor belt.

Saurabh Jha is a physician and contributing editor to Healthcare Blog. He is currently suffering from a crisis in political economy, which is like an identity crisis but much worse.

He can be reached on Twitter @RogueRad. This piece originally appeared in 3 Quarks Daily.

Categories: OIG Advisory Opinions

Confessions of a Health Plan CEO

The Healthcare Blog - Sat, 04/23/2016 - 11:14

The fact that I was once the CEO of a health insurer may cause you to read this with some skepticism.

I invite and challenge your skepticism.  And I will do my very best to keep this piece strictly factual and not stray into the ambiguities that necessarily accompany complicated matters.

So bear with me.

Health insurers are not popular.  No one wants to go to the prom with us.  We have been vilified by no less than the President of the United States.  Heady stuff.  Let us see if this vilification and what I call the cartoonization of insurers has served us well in the healthcare debate.  I think it has not, because for reasons I hope to make clearer, it has taken the focus away from the real causes of our cost and quality nightmares.

Health insurance started in the Depression with the Blues, although they were not at first called that.  They typically were formed by hospitals (the Blue Crosses) and physicians (the Blue Shields), so that some payment for services rendered might be, well, “insured.”  Provider self interest cloaked in the public interest.  Perhaps there was alignment.  And there was a Depression going on after all.

At first, the role of the health insurer was strictly financial.  The insurer financed all or a portion of covered health services, and far, far fewer services were covered then than today.  That’s all an insurer did or was expected to do.  It was not there to manage doctors or hospitals or patients or anything else.  Originally, this financing was done through “indemnity” plans, which allowed patients to see anyone they wanted, and paid a set dollar amount per service or per day of hospitalization (e.g., $50/day of hospitalization).  Thus, if you chose a more expensive provider, the difference was on you.  Insurers back in the day did not negotiate reduced fees with providers (“fee discounts”).  It was much more civil then.

Nonetheless, up to World War II, a very small percentage of Americans had health insurance.  One reason for this is that Americans spent very little on healthcare.  In 1929, Americans spent about 1% of GDP on healthcare; by 1966 when Medicare and Medicaid were adopted, it was 6%; today it is 20%.

By virtue of political accident, the employer-based system of health insurance came about through a confluence of two things:

  • During WWII, FDR’s National War Labor Board (which enforced wartime wage and price controls) ruled that fringe benefits, which included health insurance, were not subject to wage controls.  Exactly how this happened is unknown, but the result was that although wages were frozen, employers could spend more on health insurance, and the unions were all over that like white on rice.
  • The 1954 Internal Revenue Service codified that while the cost of health insurance could be deducted by employers, it was not income to employees.  A huge incentive that continues to today and has embedded employer based coverage in America as the norm rather than governmental coverage, which is the norm everywhere else.

After WWII, healthcare services predictably became more sophisticated and comprehensive.  Coverage also started to change away from strict dollar indemnity, to a percentage of charges and even more comprehensive coverage.  And as coverage increased, the provider market grew exponentially.  This was a symbiosis that fed upon itself because the use of employer-financed coverage disintermediated the user of services (patients) from its payment.

By the mid 1970’s, almost a decade after Medicare and Medicaid were enacted, we started experiencing a health insurance cost crisis.  The public outcry was fierce, state legislatures responded, and health insurance regulators were statutorily empowered to control premiums and health insurers.

Health insurers were called in on the carpet about the premium increases.  Why were they paying doctors and hospitals whatever they wanted?  We were accused of getting too cozy with providers.  The public and regulators and legislators demanded that insurers negotiate harder bargains with physicians, hospitals, and other providers.  And in response, insurers started doing just that, slowly at first, and then more and more aggressively, to the point that today, the once friendly relationship between insurers and providers is downright toxic.

A quick (and true) story illustrates today’s circumstances:  My company, Blue Cross & Blue Shield of RI, was and still is the primary (some would say dominant) insurer of Rhode Islanders.  It negotiated hard bargains with physicians and hospitals, in part using its size as leverage.  After all, that is what legislators, the public, and regulators demanded.  Occasionally, in negotiations, we would reach impasse with say a hospital.  The disagreement would get public, “top of the fold” news in the Providence Journal, and the media and politicians would be quick to side with the hospital and against the insurer.  Hospitals are, after all, warm and fuzzy and they save lives.  We were castigated for using our leverage to strike hard bargains on behalf of our subscribers and employers.  [Wasn’t that our job?]  Pressure mounted on us to cave in.  The hospital might even send postcards to patients with warning of dire consequences should Blue Cross not give the hospital what it was asking for.  And if I tried to garner support from said employers, what do you think happened?  They bailed, saying, “Just fix it.”  No one goes to the prom with the health insurer.

My story illustrates the total lack of logic-integrity when it comes to reactions by the public or elected officials about health insurance or insurers.  The employers knew why we were taking a hard line with that hospital.  It was for their benefit.  Why else would we endure such unpleasantries?  It would have been far more pleasant to give them what they wanted, shake hands, and go golfing.

To further drive this point home, let us talk about how health insurance and premiums work, because most people cartoonize and don’t realize what’s at play here.

There is self-insurance and insurance.  Employers of a sufficient size can self insure, which means they pay the actual claims of employees and dependents, and pay the insurer a fee for administering the plan (and making available to that hard bargain fee discount with providers that it was excoriated for getting).

Or employers can fully insure against healthcare costs.  In that case, their premiums consist of actuarially calculated amounts to cover projected claims expense plus an administrative charge.  The self-insured employer knows it pays exactly what it incurred for claims.  The fully insured employer gets a fixed premium (budgetable) which may be the same, greater, or less than the actual costs in any given year.

If you take all classes of coverage, the cost components of coverage are approximately 90% claims expense and 10% administrative.   While every million dollars count, it becomes immediately apparent that to put a real and lasting dent in healthcare coverage costs, something must be done on the 90% claims expense side.  There’s no way around this.  And yet year after year after dreary year, politicians, media and the public focus on the 10%, ignoring the 90%.  While I accept that appearances count for something, reality really counts for more.

Let’s view this another way.  My annual operating expense budget was about $250 Million.  About 65% of that was people (salaries, fringes, etc.).  Another significant portion was fixed (building, technology, pencils (how quaint), etc.).  If by magic, we could cut 10% out of our operating costs, we’d reduce rates by $25 Million.  At the same time, our claims expense was close to $2.5 Billion.  Thus, what an employer would see as a result of our $25 Million cut is a 1% reduction of rates, for one year.   This is a one time reduction.  And I would have fired perhaps 100 employees, and my service would have suffered.

To further highlight the unreality, when I attempted to outsource some of our technology costs (and jobs), I got a call from the Governor’s office demanding reconsideration.  I reminded the Governor’s representative that they had switched State of RI employee coverage from Blue Cross to United Healthcare because our administrative expense component was higher than United’s.  It’s an unfortunate reality that to cut costs, one must impact people costs (jobs, salaries, fringes).  That logic was lost on that administration.

Back to the claims expense.  In addressing our cost conundrum, we have no alternative other than reducing claims expense (or at least mitigating increases of claims expense).

Claims expense consists of:

  • Price (the fees or payments paid to providers);
  • Use (the rate of use of services per person per year); and
  • Mix (the relative expensiveness of services, e.g., PET scans rather than x-rays).

What more might we do on the price (fee) side?  We’ve driven the hard bargains.  We have no support for driving even harder bargains.  Even Medicare, which is truly the 8000 lb gorilla and has threatened for over a decade to drastically reduce physician fees, every single year, backs down.  Realistically, fees cannot be significantly reduced.

What more might we do on the mix (relative expensiveness) of services?  Probably nothing short of rationing, which is so un-American.  When new miracles arrive, the demand for coverage is enormous.  That route avails us nothing.

What’s left?  The only thing left is the rate of use of services per person per year.  And what are we to do there?

Well, after politicians and regulators told insurers to keep the fees as low as possible, they then tasked insurers to do something about the rate of use of services.  They focused mostly on fraud and abuse because those were safe.  Sotto voce, however, the message was: “Do something about over use of services.”

[Incidentally, before we move on, I’m sure you’ve heard it said how unacceptable it is that health insurance premiums are increasing at 3-4 times the rate of inflation, right?  And it does seem a terrible thing.  Cartoonization again.  Comparing apples and oranges.  Inflation is measured by CPI, which in turn measures increases in the price of a market basket of goods and services, such as the price of a gallon of gas, loaf of bread, a new home).  Price and only price.  Health insurance premium increases have a price increase component (fee increases), a rate of use component, and a mix (relative expensiveness of services) component.  If fees increase say 3% a year, and the rate of use increases say 10% a year (which it has), and the mix perhaps 1% a year, you can see how we get to double digit increases in premiums rather quickly, each year.]

There are two approaches to this problem:

  • On the provider side:  It’s called “managed care.”  No one seems to like it.  In the 1990’s, this was the bane of HMOs with bean counters limiting or denying care, and getting between doctors and their patients.  Denzel Washington famously acted a part (John Q) of a Dad whose son was denied care by an HMO.  More public outrage; more legislative backlash.  Admittedly HMOs handled that poorly.  We pulled back from that with a kinder gentler managed care, and the results have been near double digit increases in the rate of use of services over the last 15 years.  And when insurers impose new constraints on providers, such as pre authorization, everyone howls.  And I dare you to try to call something not “medically necessary,” much less win a dispute in court on that issue.

Moreover, health insurance never was designed to cover everything, even if medically necessary.  And yet somehow, the public and elected officials seem to think it should.  That begot so-called “mandated benefits,” legislative orders that insurers cover things that previously were not covered (e.g., in vitro fertilization; drug and alcohol treatment; IV Lyme Disease treatment; wigs for chemo patients; batteries for cochlear implants).  Are some of these things good for people?  Sure.  But each mandated coverage increases premiums.

The insurer shows up at the legislative hearing opposing the mandate and is lambasted by providers, very sympathetic patients, and the legislators.  Outcome almost guaranteed.  And why are we opposing such mandates?  The more mandates, the more business we get, and the higher the premiums.  Seems at first blush to be in our interest.  Hmmmm.  We were trying to keep premiums down.  But the public, the media and elected officials can compartmentalize those issues amazingly.

There recently has been federal recognition of the need to do something on the provider side.  Obamacare introduced Accountable Care Organizations, recognizing that the historical method of paying providers (“fee for service”) that reimburses for things done is a major driver of our out of control costs.  Under fee for service, providers are paid for things done.  The more things done, the more paid.  The result is predictable.  We have a volume based production system in America because that’s how we pay.

We will over time move to a bundled payment system (to address costs, if done right) and incentives for quality of care and outcomes (to address our poor quality of care).  That is good, but progress is slow, and the provider community is very slow to adapt and adopt.  This is understandable given the physician culture of autonomy and volume production that has existed for decades.  To move to a coordinated care model focused on patient outcome rather than volume can be scary.

Lastly it has been said by no less than the head of CMS (Medicare/Medicaid) that as much as 30% of our healthcare expenditures are useless waste and error.  If we spend over $3 Trillion on healthcare, this is a $1 Trillion waste of money, perhaps the largest single untapped resource in America today.  Yet the culture of physician autonomy resists quality of care and outcome measures (much less their publication) and electronic health records, but these are desperately needed to address waste and error.   Insurers and the federal government are leading the move away from fee for service and toward required electronic medical record use.

  • On the patient side:  I testified before RI’s Joint Oversight Committee on Healthcare in 2004 that the group most responsible for our out of control healthcare costs were us, the patients.  That we were living unhealthy lifestyles of rampant obesity and diabetes, and were not accessing the healthcare delivery system appropriately.  The headlines next morning?  “Blue Cross Blames Subscribers For Rate Increases.”  Well…true as far as it goes, but not particularly helpful to the cause.

So what happens when, in response to unhealthy lifestyles and improper access, employers or insurers implement workplace wellness programs with penalties for non-compliance?  Legislatures gear up and outlaw penalties and even water down incentives to “good faith efforts” rather than results.  This by no less than Title VII, the ADA, and GINA.  We react as if people are incapable of taking proper care of themselves.  We fail to hold people accountable for things within their control.  Again, not helpful.

Then there are the skeptics who claims that such programs do not belong in the workplace at all.  That they are invasive and demeaning, and don’t result in a positive ROI.

The point is that any time anyone (usually the insurer) tries to do anything meaningful (and to be meaningful it must be disruptive), roadblocks are raised and no one supports the insurer.

Health insurance today is not really insurance.  It has morphed to something different.  Traditional insurance spreads a risk of the cost of a large unpredictable loss among a group of people who each share such a risk.  Fire insurance is a good example, where insureds each pay a small amount (premium) to cover a small risk of a fire loss, and the insurer spreads that risk over hundreds of premium paying insureds.

Health insurance turns this on its head.  With the exception of hospitalizations and a few other items, health insurance is not about paying a relatively small premium to cover the risk of a very large loss.  In health insurance, we pay a very large premium to cover mostly predictable and indeed inevitable smaller expenses.  Health insurers have become fiscal intermediaries between providers and subscribers—not insurers.

Someone I know once remarked that to blame health insurers for the cost of healthcare is like blaming oil delivery companies for the high cost of home heating oil.  Perhaps not a perfect analogy, but you get my point.

So to summarize:  the cost of health insurance is almost solely driven by the cost of healthcare.  The cost of healthcare is driven by the claims actually paid out by insurers to doctors and hospitals for care given to patients.  Claims increases are mostly driven by increases in the rate of use of services.  When  disruptive efforts to change this paradigm are successfully opposed time after time, it underscores the futility of the role of insurers.

And yet they are so easy to portray as villains, and someone has to be the villain.  Don’t they?

Jim Purcell is the former CEO of BCBS of Rhode Island and before that a trial lawyer. Today he arbitrates and mediates complex disputes.

Categories: OIG Advisory Opinions

Blog Notes

The Healthcare Blog - Sat, 04/23/2016 - 11:05

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Categories: OIG Advisory Opinions

Your Drugs Are About to Get More Expensive

The Healthcare Blog - Sat, 04/23/2016 - 10:10

The Washington Post recently ran an article by Marlene Cimons, a Medicare Part D drug plan enrollee. Her late father had been a pharmacist and he had owned a drugstore while she was growing up. She thought it would be nostalgic to patronize a neighborhood drugstore rather than a big chain pharmacy. She found a neighborhood drugstore in her preferred pharmacy network and had her prescription transfer there. She was stunned, however, when a 90-day prescription that should have required only a $3 co-pay turned out to be $58.

When she inquired the drugstore claimed it stood to lose money on her particular prescription. Who knows; maybe its profit margin wasn’t as high as the pharmacy thought it should be. In order to fill her prescription the drugstore basically required her to willingly pay an extra $55 more than its contractual agreement stipulated. Of course, that violated the contract the drugstore had signed with her Medicare Part D plan. The agreement the pharmacy had signed with her drug plan did not allow it to arbitrarily charge higher prices and Ms. Cimons left without her prescription.

Medicare drug plans are governed by federal law. But for the rest of us with a drug plan, the state in which we reside generally regulates drug plans and pharmacy benefits. When pharmacists descend on state capitols they often find a sympathetic edar in state legislators. In his classic book, The Logic of Collective Action, Mancur Olson argued that special interests are often able to organizeand promote public policies that benefit the group. Special interests face less opposition when the benefits are concentrated but the costs are diffused to a larger group, because the group paying the costs has less incentive to organize.

This phenomenon has played out time and time again in states’ drug plan regulations. Over the past few years state legislatures have pass laws regulating drug benefits in ways that benefit drugstores at the expense of consumers. For example, New York State (and others) have so-called “consumer protection laws” that prevent health plans from offering enrollees’ a better price on mail-order pharmacy drugs.  In other words, in New York my drug plan could not induce me to use its mail order pharmacy by offering me a lower price than walking into a local pharmacy.

One of the most egregious examples I’ve seen lately is legislation being debated in Oklahoma. Oklahoma already has a law that requires weekly updates to the maximum allowable cost (MAC) list of prices insurers and drug plans use to reimburse pharmacies. Existing law also allows pharmacies to contest the MAC price if it believes it to be unfair. The Oklahoma Senate is now considering a proposal that amends and greatly expands the existing law.  Senate Bill 1150 replaces the term “maximum allowable cost” (in the existing law) with the term “reimbursement amounts.” Reimbursement amounts is so broadly defined that it includes not just MAC prices, but also customer copays and brand-name drugs. In theory, this could allow drugstores to raise prices by some arbitrary amount and balance bill consumers for the difference between the reimbursement they agreed to and the higher price they wish to charge. Basically, the Oklahoma legislature is debating legally allowing drugstores to do exactly what the drugstore in the Washington Post article tried to do to a Medicare Part D enrollee. Of course, when a public policy that benefits a group is passed in one state, lobbyists in other states soon try to follow. This isn’t just a problem for health plans. Many consumers have high-deductible insurance that requires the first $1,000 to $5,000 in medical and drug spending to be paid out of pocket before benefits kick in.

Devon Herrick, PhD is a health economist and senior fellow at the National Center for Policy Analysis.

Categories: OIG Advisory Opinions

The Mess That is MACRA

The Healthcare Blog - Thu, 04/21/2016 - 13:58

MACRA (the Medicare Access and CHIP Reauthorization Act) is a mess. It is extremely difficult to comprehend, it is based on assumptions that defy commonsense and research, and it may raise costs.

The Medicare Payment Advisory Commission (MedPAC) would never say what I have just said, but MedPAC definitely understands MACRA’s defects. The transcripts of MedPAC’s October 8, 2015 and January 15, 2016 meetings indicate that members and staff perceive daunting impediments to the implementation of MACRA. But those transcripts also suggest that MedPAC won’t tell Congress to rewrite or repeal MACRA. Rather, the evidence suggests MedPAC will mince words. It appears MedPAC will send CMS and Congress a few wishes dressed up as “principles” and wait for MACRA’s inevitable failure before offering more useful advice.

Before I attempt to explain MACRA, let me first convey to you MACRA’s mind-numbing complexity by quoting four commissioners. Each statement below is followed by the last name of the commissioner who made it, the date the statement was made, and the page number of the transcript where the statement appears.

“[T]he complexities involved are just absolutely enormous and mind-boggling.” (Hall, October 8, 2015, 158-159)

“I think … Congress has given us a very tricky set of semantics to work with…. What does ‘in’ mean? [Laughter]….Now, is that in our scope of discussion this morning – what these words [in MACRA] should mean?” (Nerenz, January 15, 2016, 86, 89-90)

“[W]hen you go through the law, in some parts of it it’s very hard to figure out how they fit together….” (Chairman Crosson, January 15, 2016, 90)

“I understand this is very complicated, but I think one of our first principles should be to try to simplify this, because it’s very complicated for providers to try to understand what path to take…. I understand that’s probably heroic….I think there’s a lot of aversion because folks don’t understand it….” (Thomas, January 15, 2016, 144)

Even the staff, who must explain MACRA to the commissioners, find themselves at a loss for words. Mark Miller said at the January 2016 meeting, “I don’t feel like I have a real strong handle on all these definitional issues….You know, we’ve had huge internal conversations. I’m surprised no one has resigned yet.” (94)

A bird’s-eye view of a Rube Goldberg device

To comprehend MACRA, it helps to understand the motives of its chief authors, including Representatives John Boehner and Nancy Pelosi. Like other managed care proponents, Boehner et al. thought the fee-for-service (FFS) method of paying for Medicare services was raising Medicare’s costs. Having made that evidence-free diagnosis, they decided the solution is (a) to turn the FFS incentive upside down by shifting insurance risk onto the backs of doctors and hospitals and, to minimize the possibility that risk-shifting will induce providers to short-change patients, (b) to measure the quality of a tiny fraction of all medical services delivered to patients.

Congress could have implemented this “solution” by simply instructing CMS to stop using pure FFS and to use instead pure capitation or some hybrid of capitation and FFS for all providers. Such a bill would have raised serious questions about its ability to lower costs without harming patients, but at least the questions would have been relatively easy to understand.

But instead of stating forthrightly they wanted to terminate FFS Medicare and replace it with a system resembling a giant federal HMO, Congress ordered CMS to implement a sprawling Rube Goldberg device with two compartments: One, known as the Merit-based Incentive Payment System (MIPS), would irritate doctors who stayed in FFS Medicare so much they would look for an alternative; and the second, the Alternative Payment Model (APM) program, would provide them with an alternative that would allegedly improve quality and lower costs.

But MACRA is so devoid of details about each compartment that it is impossible to predict anything. We know Boehner et al. wanted the first compartment, MIPS, to inflict large penalties and rewards, but we don’t know whether the MIPS compartment will be sufficiently irritating to drive its occupants out. Even if we knew how irritating MIPS will be, we wouldn’t be able to compare it to the APM program’s power to irritate because we don’t know what the APM entities will look like. In fact, at this date we can’t even be sure APMs will exist.

For all those reasons and more, we also don’t know whether either compartment will save money.

MIPS: Measuring the unmeasurable

The MIPS program was designed for doctors who can’t or won’t join the ACO-medical-home bandwagon. MIPS inflicts huge rewards and penalties (up to 9 percent of the average annual Part B payout per physician) based on a single “value” score (a score derived by the capricious jamming of crude quality and cost measures into one number) for each doctor. As commissioner Gradison put it, MIPS was designed for “the laggards, the people who stand for the status quo,” the knuckle-draggers who just won’t get with the Managed Care 2.0 program. (January 15, p. 133)

Evaluating how the laggards will view MIPS vis a vis the APM program is impossible because we have no idea how CMS will enforce the requirement that CMS produce a single score representing both the cost and quality of services provided by individual physicians. With the exception of a few services, measuring cost and quality accurately at the individual doctor level is not possible. There are two intractable impediments: Determining which doctor patients “belong” to (the attribution problem); and adjusting measures of physician cost and quality for factors outside of physician control such as patient health status (the risk-adjustment problem). The attribution and risk-adjustment methods used today are crude even for large groups; with the possible exception of a few of the simplest process measures, they are worthless at the individual physician level.

MedPAC is well aware of at least the risk-adjustment problem. Here is how MedPAC staffer Kate Bloniarz expressed her “concerns” about MIPS to the commission at its October 2015 meeting:

First is the challenge posed by assessing clinician performance at the individual level. The MIPS … is designed to produce an individual-level payment adjustment. But many quality and resource use measures are not reliable at the individual clinician level, and it is a particular challenge for outcomes measures. Based on CMS’s experience to date with individual-level payment adjustments, most clinicians will likely look average, and the Medicare program will only be able to reliably identify persistent outliers. (pp. 93-94 of the October 8 transcript)

At the January 2016 meeting Bloniarz repeated this criticism. She told the commission that CMS’s Physician Quality Reporting System (PQRS), which MIPS must use, could not distinguish 80 percent of the physicians from one another. (p. 74, January 15 transcript, and slide 10 of presentation)

If CMS cannot detect differences at the individual physician level for 80 percent or more of the doctors who serve Medicare patients, it seems likely that the pay-for-performance scheme Boehner et al. had in mind for the laggards in MIPS won’t have any effect on the vast majority of them. Which calls into question the ability of MIPs to “reform” doctors – to get them to “coordinate care” and do all those other wonderful things ACOs and “medical homes” were supposed to make them do. [1]

Ms. Bloniarz also expressed her concern that the reporting requirements for doctors under both MIPS and the APM program are “likely to be overly complex and further burden both providers and CMS….” (p. 94)

Sand castles on top of sand castles: The APM program

The second compartment in MACRA – the APM program – is difficult to describe for these reasons:

  • MACRA does not describe the entities that will qualify as APMs;
  • MACRA sets standards for these entities that cannot be met by the vast majority of conceivable entities, including today’s most faddish APMs – ACOs and “medical homes”;
  • MACRA says APMs must expose doctors to “risk above a nominal level,” but doesn’t say what “nominal” means; and
  • MACRA says doctors who join APMs will earn a 5 percent bonus on revenues received through APMs, but the law fails to define “revenue” (options include revenue from Part A, Part B, Part D, all or some of those parts, or revenue received for particular services).

Here is how Ms. Bloniarz explained the problem at the commission’s October 2015 meeting:

The first question is: What is an APM? The pool of APMs are all models under the Center for Medicare and Medicaid Innovation (except for innovation awards), models tested under the pre-existing Medicare demonstration authority, a demonstration required by law, and the Medicare shared savings program.

 Then there is statutory language that further winnows down the number of APMs that can qualify clinicians for the incentive payment. They must meet three criteria

…: they must use certified eHR technology; they must have comparable quality measures to MIPS; and they must either bear financial risk above a nominal amount or be a medical home that has been certified for expansion by the Office of the Actuary. And I’ll note here that that certification has not occurred.

A key takeaway is that not all APMs will be eligible APMs for which clinicians can receive the incentive payment. They will need to meet the criteria set out in the law, and presently, very few models are likely to do so. (pp. 94-95)

I suspect the reason Congress did not populate the APM compartment with clearly defined entities is that Boehner et al. knew full well that the first iteration of “value-based” entities – the ACOs and “medical homes” authorized by the Affordable Care Act – have not panned out. We know that MedPAC understands that. In its reports to Congress, and in statements by staff and members, MedPAC has clearly indicated they understand that ACOs and “homes” are saving little or no money and are having at best minor and mixed effects on quality.

It is fair to say, then, that MedPAC understands that Congress has essentially instructed CMS to build a new layer of undefined, unproven APMs on top of the existing layer of poorly defined and unproven ACOs and “homes,” in other words, a second layer of sand castles over an existing layer of sand castles.

MedPAC’s reaction to the MACRA mess

If you were a member of MedPAC and you had to advise CMS and Congress on the implementation of the MIPS and APM programs, what would you do? You know that CMS can’t measure “value” in MIPS anywhere near accurately enough to provide useful feedback to the laggards who remain in MIPS. And you know CMS has to populate the APM compartment by 2017 even though virtually no examples of the fabled APMs exist, and you know the first-generation APMs that might serve as templates for CMS’s are not working.

I suspect most ordinary people would tell Congress that it must stop writing managed care fantasies into law and hoping CMS can make them work. I suspect most people would tell Congress to go back to the drawing board and propose legislation that describes flesh-and-blood entities (not abstract managed care fantasies) that actually have a track record documented by empirical research (not happy talk). The very least MedPAC should do is define clearly the crippling defects in MACRA and tell Congress to postpone MACRA’s implementation to give CMS and MedPAC time to develop more informed recommendations.

But it appears MedPAC has no intention of doing that. Not one of the 17 commissioners suggested at the October or January meetings that MACRA should be repealed, amended, or postponed. It appears, rather, that MedPAC will send CMS and Congress a list of abstract wishes for the APM program dressed up as “principles.”

When the commissioners arrived for their January 2016 meeting, the staff (presumably with Chairman Crosson’s blessing) asked them to discuss 12 “principles” that would guide CMS in its doomed effort to make sense of the APM compartment (see slides 12 through 14 here) The principles said nothing about the MIPS program.

The 12 APM principles will look very familiar to anyone who has followed the debate about ACOs – they look just like the elements in the flabby “definition” of ACO. [3] These principles would be worthless if they were applied even to the existing layer of sand castles; they tell us nothing about why CMS’s current crop of ACOs and “homes” are performing so poorly. It is extremely difficult to comprehend, therefore, why MedPAC is wasting its time formulating these vague principles for the second layer of sand castles – the APMs that don’t exist yet.

Congress and CMS don’t need to hear any more abstract and wishful remarks about MACRA. They need to hear useful feedback. MedPAC should tell Congress MACRA is an unworkable mess and must be repealed or amended.

[1] In addition to the CMS’s inability to measure quality at the individual physician level, Bloniarz should also have listed MIPS’ bizarre attribution scheme as another mind-bending impediment to the implementation of MACRA. Unlike ACOs and “medical homes,” where insurers “attribute” patients to doctors based on how often patients visited doctors in the past, MIPS requires that doctors “attribute” themselves to patients by selecting from several possible descriptions of their relationship to each patient, such as “lead” physician and “supportive” physician, and entering a code for this relationship on each claim form.

[2] Chairman Crosson, for example, has observed that MACRA’s APM compartment “is not designed to essentially work well with what exists right now because what exists right now isn’t getting us necessarily to where you want to be.…” (October 8, 2015, p. 119) Commissioner Naylor has questioned why MACRA is built on “programs or models that have not yet been proven or, in some cases, have been proven not to be working.” (January 15, 2016, p. 150) Other commissioners have endorsed the radical notion (radical by the shoot-first-aim-later standards of the managed care movement) that APMs should be subjected to research before CMS certifies them.

[3] For example, principle 1 says CMS should authorize only those APMs that have been shown to be “successful [at] controlling cost, improving quality, or both,” principle 6 says the entity “must assume risk,” and principle 8 says APMs must have “sufficient number of beneficiaries to detect changes in spending or quality.”

Categories: OIG Advisory Opinions

Is Pornography Creating a Public Health Crisis?

The Healthcare Blog - Thu, 04/21/2016 - 12:25

Well, it’s not Zika and it won’t kill you, but pornography is being discussed—seriously—as a public health problem, even a “crisis.”

The path to this claim is a long one, with a slow burn over many years.  It was kicked into higher gear in recent months with:(a) legislative action in one state;(b) a coverstory in TIME magazine (April 11 issue);(c) a Washington Post op-ed piece by anti-porn advocate Gail Dines; (d) a response to that in Atlantic Monthly; and (e) the publication of two books that discuss at length the effect of porn and the new sexual culture on teen girls—American Girls-Social Media and the Secret Lives of Teenagers by Mary Jo Sales and Girls & Sex-Navigating the Complicated New Landscape by Peggy Orenstein.

The legislative action took place in Utah.  The Republican-led House of Representatives in that state became the first legislative body in the nation to pass a resolution declaring pornography “a public health hazard leading to a broad spectrum of individual and public health impacts and societal harms.” Dines and her fellow anti-porn crusaders want to carry that fight to other states.

This is going to be fun to watch! (Pun intended.)

But is the allegation serious?  Is there any solid science suggesting porn is a public health problem, let alone a crisis?  Or is this just the latest sexual/cultural battle (a la sex education, abortion, LGTB rights) to emerge from our puritanical history, with social conservatives leading a mostly religious-based campaign to quash modernity, social progress, and personal freedoms of the fun kind.

Normally, I’d side pretty quickly with those dismissing the porn-public health connection.  But the above referenced articles, and especially the excellent TIME magazine piece, give one pause.There’s something going on here that’s not so easy to dismiss.

I won’t repeat stats from TIME or the other pieces or books.  You can read them or google all that.  We all know how ubiquitous porn is.  Gail Dines cites research indicating that porn sites get more visitors each month than Amazon, Netflix, and Twitter combined.   I believe it.  And millions of us are still a little astounded at….well, shall we just say the variety of human sexual expression you can see on the internet after just a couple clicks.

The central contentions in the porn-is-a-public-health-crisis movement are these:

  • Porn is disruptive to the “normal” sexual development of young teens (boys and girls) and feeds a pernicious and precocious hook-up/sexting/Tinder/Grindr culture.
  • Porn can be addictive, not purely in a physiological sense like heroin, crack, or opioids but psychologically and perhaps partially physiologically (via pleasure-inducing brain chemicals that get released when watching it).  Your brain on porn, so to speak.
  • Porn leads men to sexually harass, exploit, assault or rape women.
  • Porn is disruptive to marriage, mental health, and the establishment of healthy and stable sexual relationships as men (mostly) crave the intense sexual arousal it can generate, and then become unable to bond and perform sexually with women due to a sort of subtype of erectile dysfunction (ED).
  • Workers in the ever-expanding porn industry (which draws on professionals and “amateurs”) are at risk of STDs, abuse, and trauma.

I haven’t reviewed the literature on any of these issues. But the aforementioned articles (TIME and Atlantic Monthly), citing selected studies and experts, concur that the research is mixed.  That is, there are studies supporting and undermining each of the above contentions (which the notable exception of the last: porn industry workers are at higher risk of STDs).

The social/cultural debate over porn focuses primarily on studies linking it to misogynist and criminal behavior.  And recent surveys on sexual predation on college campuses are certainly disturbing—with 1 in 4 women reporting unwanted and uninvited physical sexual contact, actual assault, or rape.

But there’s no conclusive proof porn is a major trigger of such behavior, and you could argue that it might prevent aggressive acts by being an outlet for hormone-driven sexual desire (of the teenage and early 20s urgency kind).  Indeed, European studies strongly suggest as much.

It’s also worth noting in the context of the public health crisis thesis that as the hook-up/sexting/Tinder culture has spread, the incidence of teen pregnancy and STDs has actually declined.  Hmmm.  More careful useful of condoms?  Yes.  A wider variety of non-intercourse behavior, some of it learned from porn?  Quite possibly.

Medical researchers are primarily interested in the addiction hypothesis, and rightly so.  There’s undeniably something of interest going on there and we’re sure to see further research parsing how the human brain responds (perhaps uniquely) to porn.  Is there a “neural model” of porn dependency different from other kinds of psychological or physiological dependencies?  Possibly.

In the meantime, though, calling porn viewing (even a lot of it) an addiction is misleading.  That plays into the hands of anti-porn advocates and isn’t based, yet, on conclusive research.  It also risks stigmatizing millions of people—who are, of course, free to do with their time what they want.

That said, the genuine self-identified suffering of some men who view porn excessively (as in, hours every day) and get “hooked” on it—to the extent that it disrupts their relationships—deserves clinical attention.  That attention needs to come from doctors, psychologists and support groups.I spoke with two pediatricians and both said they agreed it was an issue they should speak with their teen patients about.  Couples also need also to face it forthrightly.

But excessive porn viewing does not, in my view, warrant the attention of an overly stretched and chronically underfunded public health system.  Not yet, and probably never.  Likewise, state actions such as those in Utah are unlikely to serve a useful public health (or any) purpose.

As quoted in TIME, clinical psychologist David J. Ley, author of The Myth of Sex Addiction, makes this common-sense observation: “The overwhelming majority of porn users report no ill effects.  A very, very small minority are reporting these concerns about ED.”

I would go further.  While the widespread viewing of porn raises legitimate issues that merit further research and public discussion, we would be remiss if we did acknowledge and study it’s positive impact as well.  Much internet porn is misogynist, but far from all. There’s lots of good well-filmed and sensitive porn out there that’s increasingly tailored tomainstream tastes.   They may be acting, but the participants in some porn I’ve seen sure look pretty lovingly into each other (sorry, pun intended again).

I also think it’s beyond argument that the advent of internet porn over the past 15 years has opened our eyes and imaginations to alternative sexual practices, ones that were taboo just a decade or two ago.   And some of those have now become mainstream, enriching the intimate lives of millions of people, including many an old fuddy-duddy married couple.

Historians and sociologists (the liberal ones anyway) have long observed that the U.S. has a history of sexual hang-ups.  Anyone who has spent time in Europe knows citizens in many EU countries are much more blasé about sex.  In contrast, we Americans have struggled with the whole subject, on many different levels, social and personal.  That’s now changing slowly, for the better.  Healthy sexuality (including homosexuality) is being increasingly embraced as an integral part of a meaningful and joyful life even into one’s senior years.

Porn is arguably a positive part of that change—albeit one that warrants continued scrutiny.

Steven Findlay is an independent journalist and editor who covers medicine and healthcare policy and technology.

Categories: OIG Advisory Opinions

Making Medicine Great Again

The Healthcare Blog - Thu, 04/21/2016 - 07:42

The annual Lown Institute Conference advocates for the “right” kind of patient care, as in “the correct course of action.” But the political meanings of “right” and “left” also echo, sounding like a healthcare version of the recover-lost-glory demands of Donald Trump and the moral crusade of Bernie Sanders.

The program for this year’s meeting, held in Chicago, urged attendees to “take back health [care];” you could almost hear a Trumpian, “Make medicine great again!” In an opening address, the institute’s senior vice president, Shannon Brownlee, proclaimed, “We are gathered out of a shared sense of moral purpose and a shared sense of outrage at the state of American healthcare.” The targets of that outrage that “we” need to take back healthcare from comprised a Sanders-type litany of the “pharma, biotech and device companies…[who] have illegally marketed products.”

There was one more villain, very carefully defined. That would be “a culture of overtesting and overtreatment…[that] harms patients, clinicians and communities.” Got that? While Brownlee’s acclaimed 2007 book, Overtreated, repeatedly highlights the abuses of fee-for-service medicine, the Lown Institute’s namesake founder and its president are academic physicians. And so, the doctors and hospitals responsible for and often profiting from overtreatment magically become just one more set of victims of the “culture.”

Ideological blinders notwithstanding, the institute’s work celebrates and highlights an impressive array of individuals working diligently for every conceivable kind of “right care.” There was Dr. Jeffrey Brenner, a Camden, NJ family physician whose description of his dogged, data-driven efforts on behalf of the poor and sick brought a standing ovation. And Dr. Joanne Lynn, a long-time advocate for the frail elderly, explaining why a MediCaring community model that mixed medical and social services was what the vulnerable old and their families really needed.

For the policy wonks, there was Lauren Taylor, co-author of The American Health Care Paradox: Why Spending More is Getting Us Less, showing how the billions of dollars spent on unnecessary and ineffective medical care “crowd out” desperately needed money for education, housing and other social services. And for those focusing (literally) at the bedside, a University of California-San Francisco physician described an effort to reduce the frequency with which hospital patients are poked and prodded for blood work. The program was dubbed, “Think twice, stick once.”

True to its grassroots ambitions, the institute has established “right care” programs with chief residents at 32 academic institutions. Lown will keep contact with those individuals as they progress in their careers, while also working with the chief residents who take their place. Lown also maintains friendly relations with Choosing Wisely, a parallel initiative against overuse that 70 specialty societies. In addition, a fledgling Right Care Alliance has set up separate councils focused on issues, such as science and evidence, and medical specialties, such as cardiology.

I’ve followed the institute’s work since its inception, and this is the second conference I’ve attended. As much as I find Lown informative and inspirational, whether it can be influential remains a big question mark. An Institute of Medicine analysis of U.S. healthcare expenditures found $210 billion in unnecessary services in 2009. If you want to wrest away that magnitude of money, yo need to demonstrate some “might” to go with “right.”

So, for instance, though “Think twice, stick once,” was launched last year as a national initiative, at its home institution it hasn’t even spread beyond the Department of Medicine that birthed it. In political terms, this as if Bernie Sanders couldn’t win the Vermont primary.

Or take a much more economically and clinically significant example of overuse. About a half million kids go to the emergency room each year with some sort of head trauma. Research presented at Lown showed eliminating routine CT scans for those children did not hurt health outcomes, even while it eliminated the health risk of unnecessary drugs, surgery and radiation exposure. All well and good in theory. However, if Lown wants to change the “culture” that prompts those scan orders, it needs to show genuine public support. I suggest finding some moms willing to publicly agree that not treating their child’s “intracranial bleeds and skull fractures” (as the research phrased it) was perfectly fine since, of course, those problems would likely to heal on their own (another research finding). Absent that kind of support, that, good luck getting any insurer or hospital exec in their right mind to take on that overtreatment challenge.

Finally, Medicare and private payers are laboring hard to replace fee-for-service payment with reimbursement tied to precisely the type of goals Lown wants to achieve. That’s the “us” the institute should be mobilizing its followers to support, rather than, like Trump, appealing to a mythical past (here’s one of my articles on that topic) or, like Sanders, promising a utopian future.

After all, one can be both an idealist and realist, particularly about financial incentives. As Dr. Deborah Korenstein of Memorial Sloan Kettering Cancer Center put it about unnecessary treatments at the end of life, “Bundle the payment, then people will focus on what’s really best for the patient.”

Categories: OIG Advisory Opinions

Don Quixote and the Health Professional’s Endless Quest

The Healthcare Blog - Wed, 04/20/2016 - 13:57

April 22 marks the 400th anniversary of the death of the greatest novelist who ever lived, Miguel de Cervantes. Though the day will pace unnoticed by most physicians, it is in fact one many should note. Why? Because both his life and work can serve as vital sources of inspiration and resilience for health professionals everywhere.

In a 2002 Nobel Institute survey, 100 of the world’s most highly regarded writers named his Don Quixote the greatest novel of all time, outscoring its nearest rivals –works by Dickens, Tolstoy, and Joyce – by more than 50%. Said the head judge who announced the results, “If there is one novel you should read before you die, it is Don Quixote.”

In connection with a recent performance of Richard Strauss’s tone poem, Don Quixote, by the Indianapolis Symphony Orchestra, I was invited to give an introductory lecture on the novel that inspired the composition. The diverse makeup of the audience testified to the novel’s power – there were wealthy philanthropists and people of little means; patrons of learning and common laborers; and the ages of those gathered ranged from the far end of the golden years to high school students.

Though quite different from one another in many respects, they were all united by a desire to learn more about Miguel de Cervantes and his timeless masterpiece.

Cervantes’ own life is only marginally less remarkable than that of his famous hero. His father Rodrigo earned his living as a barber-surgeon and his mother Leonor, whose family experienced financial difficulties, was sold into marriage by her father. Miguel was born in 1547 and grew up in a poor household. When young Cervantes fell in love with a barmaid, her father forbad the marriage due to the young man’s lack of prospects.

Cervantes soon left Spain, perhaps because he injured a young man in a duel. This led him to Rome, where he studied art and literature. Upon his return to his native country he entered the Spanish navy and served at the battle of Lepanto,where the Spanish famously defeated the Ottoman fleet.  During the fighting, Cervantes sustained three gunshot wounds, one of which robbed him of the use of his left arm for the rest of his life.

After spending months recuperating from his wounds, Cervantes set sail for home. As the ship approached the coast of Spain, it was set upon by pirates, who killed many crew members and took the survivors, including Cervantes, into slavery. Cervantes spent five years in captivity, during which he attempted escape on at least four occasions before he was finally ransomed by his family. His experiences provide the inspiration for a part of Don Quixote known at the captive’s tale.

Back in Spain, Cervantes began writing, but he was unable to support himself in this capacity. He worked first as a commissary for the Spanish navy, then as a tax collector, suffering terms of imprisonment due to financial irregularities. By his own account, the idea for Don Quixote came to him in jail, and he published the first volume in 1605. Partly in response to the publication of an unauthorized sequel by another author, Cervantes released his own second part in 1615.

In Cervantes’ own day, Don Quixote was regarded as a comedy, and did not sell as well as some of his other writings. However, a copy of the first part did appear in the Bodleian Library at Oxford University within just a few years of its initial publication.  In 1610, Cervantes began receiving support from a patron, which enabled him to devote the last years of his life to writing. He continued doing so until the end. He was buried in an unmarked grave in Madrid on the same date that Shakespeare died.

Cervantes faced numerous disappointments and setbacks in life – poverty, imprisonment, slavery, serious injury, and repeated rejection. Not unlike many contemporary health professionals, he had many reasons to become discouraged and give up. Yet he found the will to carry on. Where did he find such inspiration and resilience? I believe that he found them above all in his work – not the reactions of critics or the royalties he collected, but his deep belief in his life’s mission.

That mission was Don Quixote, the story of a bachelor and petty nobleman whose inveterate reading of chivalric romances eventually drives him mad. He comes to believe that such books are literally true, and he feels divinely called to revive chivalry’s faded traditions. He outfits himself with knightly gear, adopts the name Don Quixote, dubs his tired old nag Rocinante, and identifies a peasant girl in a neighboring town as his lady love, the “peerless” DulcineadelToboso.

In his first sally, he mistakes an inn for a castle, the innkeeper for its lord, and a group of prostitutes for noble ladies. After holding vigil all night over his arms in the inn’s courtyard, he mistakes a band of muleteers for antagonists and engages them in battle. The innkeeper, seeking to be rid of his demented, non-paying guest, dubs him a knight and sends him on this way. Don Quixote then “rescues” a peasant boy suffering a beating from his master, though once he departs, the thrashing only continues with increased ferocity.

Soon Don Quixote suffers his own severe beating at the hands of some traders from Toledo who resist his demands that they praise Dulcinea’s beauty.  He awakens at home, where his family and friends have resolved to make a bonfire of the books that drove him mad. After doing so, they seal up his library, informing him it was the work of a wizard. Yet instead of abandoning his mission, Don Quixoteen lists a neighboring peasant, Sancho Panza, as his squire, promising him the governorship of an island.

Thus begins one of the most remarkable friendships in literature. Don Quixote is tall, gaunt, learned, an inveterate lover of books, and a member of the nobility. Sancho is short, round, an illiterate peasant, and always looking for a chance to profit. Yet Sancho is gradually won over by his master’s dream, and the two men, so different in so many ways, become united by the belief that the world is meant to be better than it is.

As soon as the second sally begins, they encounter their first and perhaps most famous adventure: Don Quixote spies an assembly of windmills off in the distance, which he takes to be an army of malevolent giants. Despite Sancho’s protests that they are nothing more than windmills, Don Quixote resolves to attack them.

Just then they came in sight of thirty or forty windmills that rise from that plain. And no sooner did Don Quixote see them than he said to his quire, “Fortune is guiding our affairs better than we ourselves could have wished. Do you see over yonder, friend Sancho, thirty or forty hulking giants? I intend to do battle with them and slay them. With their spoils we shall begin to be rich, for this is a righteous war and the removal of so foul a brood from the face of the earth is a service God will bless.”

“What giants?” asked Sancho Panza.

Despite Sancho’s protests, Don Quixote takes up his lance, lowers his visor, spurs Rocinante, and charges at full tilt, with the result that he is tangled in one of the blades and knocked to the ground insensate.

Far from abandoning his quest, however, Don Quixote’s defeat at the hands of the giants only increases his determination to forge ahead. His further adventures are far too numerous and varied to recount, but they remain infused throughout with the spirits of both comedy and tragedy. In some instances they reverse the usual relationship between Don Quixote and Sancho – once when Sancho claims to see Dulcinea and her ladies in waiting, the Don sees only peasant girls.

Near the end of the second part, Don Quixote does battle with the Knight of the White Moon – actually a learned young man who exacts from the Don a pledge to go home and give up knight errantry if he is defeated. When Don Quixote falls, he dutifully obeys, taking to his bed and soon awakening from a dream cured of his madness. In one of the most moving passages in literature, Sancho tries to restore his faith, but Don Quixote condemns all books of chivalry before breathing his last.

Though the novel is filled with battles of various kinds, Don Quixote reminds contemporary health professionals that the real battle takes place within.

In giants we must kill pride and ignorance. But our greatest foes, and those we must chiefly combat, are within. Envy we must overcome by generosity and nobleness of spirit; anger, by a reposed and quiet mind; riot and drowsiness, by vigilance and temperance; lasciviousness, by our inviolable fidelity to the mistresses of our thoughts; and sloth, by our indefatigable peregrinations through the universe. . . . This, Sancho, is the road to lasting fame and good and honorable renown.

There is a venerable Spanish saying: “You read Don Quixote three times in your life. The first time it makes you laugh. The second time it makes you think. And the third time it makes you cry.” While individual reactions to the book may vary, those who know it best would certainly concur with the recommendation to read Cervantes’ masterpiece at least three times. There is perhaps no better literary source of inspiration and resilience for today’s health professionals.

Some would say that to continue to find meaning and vitality in contemporary healthcare is a quixotic quest, a denial of harsh realities that should discourage rather than lift up the hearts of health professionals. Perhaps they are right, but I believe we need to understand the true meaning of quixotic, which is to persist in spite of all obstacles in the pursuit of something beautiful and good, knowing that simply doing so is far more important than any outcome.

Categories: OIG Advisory Opinions

Preparing Your Organization for MACRA 1.0

The Healthcare Blog - Wed, 04/20/2016 - 11:41

What does the Medicare Access and CHIP Reauthorization Act (MACRA), signed into law in 2015, mean for healthcare organizations and providers? At HIMSS 2016, the CMS Center for Clinical Standards and Quality Director, Kate Goodrich, MD, stated MACRA’s goal: “to have a single, unified program with flexibility. The new Merit-Based Incentive Payment System (MIPS) will offer that flexibility and not be a one-size fits all program. The new rule will reimburse physicians based on four factors.”

Health systems are still waiting for additional details about the “four factors” Goodrich mentioned (listed in this article under “MIPS”) or how CMS will reward providers for delivering better care. We’re aware of MACRA’s general structure, but still waiting for clearly defined rules and regulations. Until then, it will be difficult to evaluate this new law.

Even though health systems are currently in a waiting period for clarifying details about the proposed MACRA regulations (with major impacts in 2019), MACRA’s base year will likely be 2017—and 2017 is just around the corner. This article provides an overview of MACRA and guidance about what health systems should do to prepare for MACRA now.

MACRA Overview

MACRA permanently replaces the unsustainable Sustainable Growth Rate (SGR) formula (created in 1997 to restrict growth in Medicare Part B spending) with a system that attempts to prioritize quality over quantity. It also replaces Medicare’s multiple quality reporting programs with a single Merit-Based Incentive Payment System (MIPS). Before MACRA, several programs such as Accountable Care Organizations (ACOs), bundled payments, and various value-based models existed for hospitals and eligible professionals.

Under MACRA, providers will receive a .5 percent annual increase until 2019, at which point they can choose between two value-based payment tracks: MIPS or Alterative Payment Models (APMs). Meaningful use will be moved under MACRA in both tracks.

Two Value-Based Payment Tracks: MIPS and APMs

Starting in 2019, providers can choose between MIPS and APMs:

MIPS

MIPS will be the default system, and consolidates the existing Meaningful Use, Physician Quality Reporting System (PQRS), and Value-Based Payment Modifier (VBM) programs. Physicians that choose this track face payment reductions and increases based on performance. An overall MIPS score will be calculated according to performance in four measures (weighted by performance, with potential changes in weight by year):

  • Quality (30 percent)
  • Resource use (30 percent)
  • Meaningful use (25 percent)
  • Clinical practice improvement activities (15 percent)

APMs

The APMs track reimburses Medicare providers based on value of services rather than service volume. Providers meeting the criteria for this track cannot move to the MIPS track. Physicians receiving a significant portion of their payments through eligible APMs can be exempt from MIPS—and they receive a lump sum payment of 5 percent of covered services. By 2018, CMS wants 90 percent of payments tied to quality, with 50 percent under APMs.

The industry needs more clarification and additional details to fully understand the nuances of this track, but the general structure is apparent:

  • The eligible APM must require use of certified EHR technology and get payment based on quality measures.
  • There also needs to be financial risk or a medical home that meets certain criteria.
  • A minimum amount of revenue must be covered under an eligible APM risk arrangement.

Meaningful Use Is Still Here

In January, 2016, the CMS Acting Administrator, Andy Slavitt, tweeted about the end of meaningful use: “In 2016, MU [meaningful use] as it has existed—with MACRA—will now be effectively over and replaced with something better.” But Slavitt’s tweet was followed up with a speech and blog post in which he softened his declaration: “The focus will move away from rewarding providers for the use of technology and towards the outcome they achieve with their patients.”

Most recently, at the 2016 HIMSS, CMS officials stated that physicians can expect meaningful use to continue to be required. Indeed, MACRA will require the continuation of meaningful use for Medicare-eligible professionals, but the incentive program can be modified to achieve the results CMS wants.

CMS EHR incentive programs (designed to encourage the adoption of new technology and measure the resulting benefits for patients) have paid out $31.5 billion between January, 2011 and January, 2016. The Eligible Professionals (EP) program received $12.6 billion for approximately 465,000 unique providers. Nothing has changed in 2016. In January, 2016, more than 200,000 eligible professionals saw a decrease in their Medicare payments because they failed to meet meaningful use standards in 2014. Meaningful use isn’t going away.

Overcoming MACRA’s Administrative Burden with an EDW

The biggest challenge MACRA brings to healthcare organizations and, in particular, physicians, is administrative burden. In particular, compiling quality metrics.

A survey conducted in March, 2016 by Well Cornell Medical College and the Medical Group Management Association (MGMA) found that physicians spend an average of 15.1 hours every week processing quality metrics. The time physicians spend processing quality metrics translates to an average cost of $40,069 per physician, per year. These figures emphasize the analytics burden that needs to offset by clearly defined benefits.

Implementing an enterprise data warehouse (EDW) and providing physicians with self-service tools to analyze their performance will help providers and systems navigate the administrative burden introduced by MACRA.

The Seven Best Ways to Prepare for MACRA Today

Although 2019 seems far away, health systems need to start thinking about MACRA now. For the most part, health systems and physicians haven’t realized the impact of this shift; nor have they determined the right strategies. There are several things health systems can do to start preparing for MACRA now:

  • Outline a strategy for tackling MACRA by Q4 2016.
  • Educate providers and encourage discussion about the new regulation.
  • Identify health system thought leaders and discuss APMs (ACOs, etc.).
  • Take a look at your quality measures and identify high-performing areas.
  • Review your CMS Quality Resource and Use Report (QRUR).
  • If you did not report for PQRS or meaningful use, then evaluate the penalties and your readiness for MACRA.

Although we’ll know more about MACRA in the coming months, 2017 will most likely be MACRA’s base year, so the best time to start preparing for MACRA is today. We’ll provide a follow-up to this blog as new details about MACRA are released.

Categories: OIG Advisory Opinions