Some worry that the drive to federally standardize treatment-outcomes measurements will put undue record-keeping pressure on them. And, yes, it’s often difficult to measure outcomes, and what about uncooperative patients?
But, of course, the drive to fee for value from fee for service is already well underway, if far too complicated because of the turgid role of the insurance companies.
The new law seems sure to speed the absorption of physician groups into hospital systems where big back offices and economies of scale make it easier to measure and record outcomes. And it will be a big stimulus for expansion of Accountable Care Organizations and patient-centered medical homes.
“CMS has released a proposed rule that would change reporting requirements for the Medicare and Medicaid EHR Incentive Program to a 90-day period instead of the current one-year reporting period.
“The proposed rule seeks to better align current measures of meaningful use stage 1 and stage 2 with the proposed meaningful use stage 3 requirements. It also aims to reduce the burden and duplication of reporting requirements.
“CMS proposes to align reporting requirements for the next two years with those proposed for stage 3. This means reporting periods would follow the calendar year for 2015 and 2016 instead of the fiscal year, which is how reports are currently submitted.”
Dr. Michael Kitchell initially welcomed the federal government’s new quality incentives for doctors. His medical group in Iowa has always scored better than most in the quality reports that Medicare has provided doctors in recent years, he said.
But when the government launched a new payment system that will soon apply to all physicians who accept Medicare, Kitchell’s McFarland Clinic in Ames didn’t win a bonus. In fact, there are few winners: out of 1,010 large physician groups that the government evaluated, just 14 are getting payment increases this year, according to Medicare. Losers also are scarce. Only 11 groups will be getting reductions for low quality or high spending.
“We performed well, but not enough for the bonus,” said Kitchell, a neurologist. “My sense of disappointment here is really significant. Why even bother?”
Within three years, the Obama administration wants quality of care to be considered in allocating nine of every 10 dollars Medicare pays directly to providers to treat the elderly and disabled. One part of that effort is well underway: revising hospital payments based on excess readmissions, patient satisfaction and other quality measures. Expanding this approach to physicians is touchier, as many are suspicious of the government judging them and reluctant to share performance metrics that Medicare requests.
“Without having any indication that this is improving patient care, they just keep piling on additional requirements,” said Dr. Mark Donnell, an anesthesiologist in Silver City, N.M. Donnell said he only reports a third of the quality measures he is expected to. “So much of what’s done in medicine is only done to meet the requirements,” he said.
The new financial incentive for doctors, called a physician value-based payment modifier, allows the federal government to boost or lower the amount it reimburses doctors based on how they score on quality measures and how much their patients cost Medicare. How doctors rate this year will determine payments for more than 900,000 physicians by 2017.
Medicare is easing doctors into the program, applying it this year only to medical groups with at least 100 health professionals, including doctors, nurses, speech-language pathologists and occupational therapists. Next year the program expands Medicare to groups of 10 or more health professionals. In 2017, all remaining doctors who take Medicare—along with about 360,000 other health professionals—will be included. By early in the next decade, 9 percent of the payments Medicare makes to doctors and other professionals would be at risk under a bill that the House of Representatives passed in March.
The quality metrics used to judge doctors vary by specialty. One test looks at how consistently doctors keep an accurate list of all the drugs patients were taking. Others track the rate of complications after cataract surgery or whether patients received recommended treatments for particular cancers.
There are more than 250 quality measures. Groups and doctors must report a selection —generally nine, which they choose — or else be automatically penalized. This year, 319 large medical groups are having their reimbursements reduced by 1 percent because they did not meet Medicare’s reporting standards.
Physicians who do report their quality data fear the measures are sometimes misguided, usually a hassle and may encourage doctors to avoid poorer and sicker patients, who tend to have more trouble controlling asthma or staying on antidepressants, for instance.
Dr. Leanne Chrisman-Khawam, a primary-care doctor in Cleveland, said many of her patients have difficulty just getting to follow-up appointments, since they must take two or three buses. She said those battling obesity or diabetes are less likely to reform their diets to emphasize fresh foods, which are expensive and less available in poor neighborhoods. “You’re going to link that physician’s payment to that life?” she asked.
Dr. Hamilton Lempert, an emergency room doctor in Cincinnati, criticized one measure that requires him to track how often he follows up with patients with high blood pressure.
“Most everyone’s blood pressure is elevated in the emergency department because they’re anxious,” Lempert said. Another metric encourages testing the heart’s electrical impulses in patients with non-traumatic chest pain, which Lempert said has led emergency rooms to give priority to these cases over more serious ones.
“It’s just very frustrating, the things we have to do to jump through the hoops,” he said.
In their first year doctors are affected by the program, they can choose to forgo bonuses or penalties based on their performance. After that, the program is mandatory. This year, 564 groups opted out, but even if all of them had been included, only 3 percent would have gotten increases and 38 percent would have seen lower payments, mostly for not satisfactorily reporting quality measures, Medicare data show.
Smaller groups and solo practitioners are even less likely to report quality to the government. “The participation rates, even though it’s mandated, are just really low,” said Dr. Alyna Chien, an assistant professor at Harvard Medical School. It’s “a level of analytics that just is not typically built into a doctor’s office.”
Dr. Lisa Bielamowicz, chief medical officer of The Advisory Board, a consulting group, predicted more doctors will start reporting their quality scores when the prospect of fines is greater. “They are not going to motivate until it is absolutely necessary,” she said. “If you look at these small practices, a lot of them just run on a shoestring.”
This year’s assessments of big groups were based on patients seen in 2013. A total of $11 million of the $1.2 billion Medicare pays doctors is being given out as bonuses, which translates to a 5 percent payment increase for those 14 groups getting payment increases this year. That money came from low performers and those that did not report quality measures to Medicare’s satisfaction; they are losing up to 1 percent.
The exact amount any of these groups lose will depend on the number and nature of the services they provide over the year. This year, 268 medical groups were exempted because at least one of their doctors was participating in one of the government’s experiments in providing care differently.
Officials at the Centers for Medicare & Medicaid Services declined to be interviewed about the program but said in a prepared statement that they have been providing all doctors with reports showing their quality and costs. “We hope that this information will provide meaningful and actionable information to physicians so that they may improve the coordination and integration of the healthcare provided to beneficiaries,” the statement said.
”{P}ublic policy that holds or pushes down Medicare and Medicaid prices (or their growth) could put downward pressure on the prices hospitals can charge to all its customers and, in turn, on the premiums we pay to insurers.”
”It’s natural, then, that hospital executives continue to promote the idea of cost shifting. The widespread belief they encourage — that it promotes higher premiums — could foster support for larger public payments. It may be a politically useful argument, but it is an economically flawed one.”
Brett Coldiron, M.D., president of the American Academy of Dermatology, says, reports Dermatology Times, that cuts to Medicare Advantage plans caused insurers to eliminate their most expensive patients by eliminating the doctors who treat them from their network. ”Despite the fact their government reimbursement has declined from 114 percent to 104 percent of fee for service Medicare, the overall profit margin of insurers has increased.”
“In the long run, they will not save money,” he said. “They are de-listing physicians for treating the sickest patients. Delayed care means greater risk of mortality and more expensive care later on. What does it cost to treat someone with metastatic melanoma [compared to melanoma that has not metastasized]?”
Dermatology Times reports: “One of the distressing realities of this de-listing phenomenon is that patients who will be most affected are retirees, typically over 65 years of age, who have been making Medicare contributions throughout their working years, according to Dr. Coldiron.”
This last remark is rather misleading. It’s common to say that since people paid into Medicare and Social Security in their working years that they have more than paid for what they get from services later in life. But because of increased longevity and the world’s most expensive medical care, most older people take out considerably more than they pay in, helping to intensify the nation’s long-term fiscal challenge.
President Johnson signs Medicare into law in 1965, with former President Harry Truman, 81, the first Medicare card holder, looking on. Mr. Truman had long pushed for national health insurance.
Some of us at Cambridge Management Group well remember how the American Medical Association tried to stop the program from becoming law in the ’60s, asserting that it was “socialized medicine.”
It wasn’t but it did make many doctors and hospitals rich. Only in recent years have its reimbursements lagged physicians’ costs (and/or their financial expectations), leading to major initiatives aimed at bringing its many wasteful aspects under control before it bankrupts America.
Meanwhile, even many of the most ardent Tea Party conservatives like to talk about how evil would be cuts in Medicare benefits. But then, many Tea Party people are over or approaching Medicare age.
The original idea for Medicare goes back at least to Theodore Roosevelt in the sense of a national insurance plan. But Republican opposition has prevented a real universal, single-payer plan from being implemented.
Since the elderly vote in high numbers and because age-related illnesses make it very difficult for most to get private insurance, they got what liberals have wanted for the whole population. Politicians have generally worried more about old voters than, say, kids.
It will continue to be politically impossible to kill Medicare. Like Social Security, it’s too much a part of American life. But the flood of aging Baby Boomers and other factors ensure that it will continue to undergo change, some of them wrenching.
The nation’s Federally Qualified Health Centers apparently have at least a two-year protection from falling off a federal funding cliff because of bi-partisan legislation that also makes major Medicare payment reforms.
While it has traditionally relied on its internationally known ability to provide high-priced specialty care, the system, “along with every stand-alone community hospital and large academic medical center, is being forced to remake itself,” The New York Times reports. “Patients are increasingly seeking care outside the hospital — in a family health center, a doctor’s office, a drugstore or at home. Medicare and other insurers are moving away from volume-based payments to new models, to pay less for better care.”
The New York Times reports that “to avoid becoming marginalized in an environment where insurers are looking to health systems that can manage all of a patient’s medical needs, the clinic — long known for treating the ‘sickest of the sick’ — is trying to become as good at primary care and treating chronic disease {including for poor communities} as it is at performing complicated heart valve repairs. ”
But “the clinic has been slow to experiment with some new payment models like a Medicare program for so-called Accountable Care Organizations, which offer systems a share of the savings if they can keep costs low while meeting assorted quality goals. The models seek to push health systems to become better at caring for large groups of people who have a wide variety of medical needs.”
“We’re so far behind that we can be ahead,” said Ann Huston, Cleveland Clinic’s chief strategy officer, told The Times.
Despite residents’ concerns and a continuing need for services, the 25-bed hospital that served this small East Texas town for more than 25 years closed its doors at the end of 2014, joining the ranks of dozens of other small rural hospitals that have been unable to weather the punishment of a changing national healthcare environment.
For the high percentages of elderly and uninsured patients who live in rural areas, closures mean longer trips for treatment and uncertainty during times of crisis. “I came to the emergency room when I had panic attacks,” said George Taylor, 60, a retired federal government employee. “It was very soothing and the staff was great. I can’t imagine Mount Vernon without a hospital.”
The Kansas-based National Rural Health Association, which represents around 2,000 small hospitals throughout the country and other rural care providers, says that 48 rural hospitals have closed since 2010, the majority in Southern states, and 283 others are in trouble. In Texas along, 10 have changed.
“If there was one particular policy causing the trouble, it would be easy to understand,” said health economist Mark Holmes, from the University of North Carolina, whose rural health research program studies national trends in rural healthcare. “But there are a lot of things going on.”
Experts and practitioners cite declining federal reimbursements for hospitals under the Affordable Care Act as the principal reason for the recent closures. Besides cutting back on Medicare, the law reduced payments to hospitals for the uninsured, a decision based on the assumption that states would expand their Medicaid programs. However, almost two dozen states have refused to do so. In addition, other Medicare cuts caused by a budget disagreement in Congress have also hurt hospitals’ bottom lines.
But rural hospitals also suffer from multiple endemic disadvantages that drive down profit margins and make it virtually impossible to achieve economies of scale.
These include declining populations; disproportionate numbers of elderly and uninsured patients; the frequent need to pay doctors better than top dollar to get them to work in the hinterlands; the cost of expensive equipment that is necessary but frequently underused; the inability to provide lucrative specialty services and treatments; and an emphasis on emergency and urgent care, chronic money-losers.
‘Another Disaster’
Rural healthcare experts caution that national and state officials need to address the problems for rural hospitals or they could face a repeat of the catastrophic closings that followed changes in the Medicare payment system 30 years ago. That 1983 change, called the “prospective payment system,” established fixed reimbursements for care instead of payments based on a hospital’s reported costs. That change rewarded large, efficient providers, but 440 small hospitals closed before the system was adjusted in 1997 to help them. Those adjustments created the designation of critical-access hospitals for some small, isolated facilities, which are exempted from the fixed payment system.
“And now, beginning in 2010, we’ve had another series of cuts that are all combining to create another expansion of closures just like we saw in the ‘90s,” said Brock Slabach, senior vice president of the Rural Health Association. “We don’t want to wake up with another disaster.”
The current surge in closures means federal officials need to come up with new legislation to halt the recent cuts to small hospitals in order to “buy time” to figure out how rural hospitals should effectively operate in the future, said the association’s chief lobbyist, Maggie Elehwany. “It is important to stop the bleeding right now.”
In Mount Vernon, a town of 2,678 people nestled in grassland and dairy country about two hours east of Dallas, family practitioner Jean Latortue has taken out a lease on the now-vacant hospital building to convert it into an outpatient and urgent care clinic at his own expense. Reopening may be a risky move, he acknowledged, but the need is there.
“The community went into panic mode,” he said. “I figured I had to step up.”
The non-profit ETMC Regional Healthcare System, based in Tyler, Texas, closed the Mount Vernon hospital and two others of its then-12 rural hospital affiliates because it could no longer sustain operating losses that had persisted for five years.
“There was no ill will,” Franklin County Judge Scott Lee said in an interview from his Mount Vernon office. “They were losing money. We had a good working relationship for years, and they had a business decision to make.”
Mount Vernon’s Issues
Perry Henderson, senior vice president of affiliate hospitals for ETMC, a major healthcare provider in East Texas, noted that rural hospitals have many uninsured patients, and Medicare accounts for “60 to 70 percent of the business,” while in “Dallas or Houston it’s a fraction of that.”
Mount Vernon, with lakefront properties that are attractive to retirees, has its share of elderly patients. Henderson also noted that many rural hospitals also have to deal with large numbers of agricultural accidents. Farming, another Mount Vernon staple, is one of the country’s most dangerous occupations. Finally, he added, country roads bring many traffic accidents. When there’s no hospital, emergencies mean longer trips to get help.
Henderson and other experts cite three reasons for the rash of closures nationally. Sequestration, the across-the-board federal budget cut that arose out of the legislative impasse between the Obama administration and congressional Republicans, has resulted in a 2 percent reduction in Medicare reimbursements since 2013.
“If Medicare is 50 percent of your revenue and you lose two points,” North Carolina’s Holmes said, “it can be a killer.”
Rural hospitals took a second hit from the federal health law’s reductions in “disproportionate share hospital” payments to hospitals with large numbers of indigent and uninsured patients. Federal officials made the cuts assuming that the law would assure that more patients had insurance.
It hasn’t worked well in rural areas, the Rural Health Association’s Elehwany said, because annual deductibles for the new insurance plans, which come out of consumers’ pockets, “are running between $2,500 and $5,000,” and people can’t pay them.
And in communities such as Mount Vernon, this problem is exacerbated because Texas, along with 22 other states, has refused to expand Medicaid, a key provision of the Affordable Care Act.
“That’s a big deal,” ETMC’s Henderson said. “That’s when we had the hurt.”
Latortue, who came to Mount Vernon as an ETMC hospital doctor in 2008, appears undaunted by the challenges of reinventing the hospital, which was treating an average of eight inpatients a week when it closed. Still, he said, “I’m very busy, and patients need to be seen—we’ll be all right.”
He intends to provide both outpatient services, including lab work, at the new clinic, and emergency care, stabilizing patients until they can be transferred to the Titus Regional Medical Center, in Mt. Pleasant, 16 miles away, or to a smaller facility in Winfield, eight miles away. He also plans a wellness clinic to treat obesity and will offer Botox and laser cosmetic services. A cardiologist and a gastroenterologist will make weekly visits, and he is also looking for an ob-gyn.
Latortue got a favorable lease from the town of Mount Vernon and inherited an X-ray machine and other equipment from ETMC, but he still took out $150,000 in loans for remodeling and needs another $60,000 to $70,000 for equipment.
Still, none of this will replace the hospital, and his patients know it. “I live right behind the building,” said Mary Hunter, a very fit grandmother of 73. “I’ve had very good health until my blood pressure spiked last week,” she said. “We retired in 2006 and moved here, partly because of the hospital. And now it’s gone.”
