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Higher physician spending doesn’t help hospital patients’ outcomes

 

A study published in JAMA Internal Medicine found that higher spending on physicians doesn’t lead to better  outcomes for patients who have been hospitalized.

The study included data from a little more than 72,000 physicians over 1,324,000 hospitalizations of Medicare beneficiaries.

The authors found that, perhaps unsurprisingly, spending variation is greater among than physicians than among hospitals.

They said the data “suggest that not only does physician spending vary substantially even within the same hospital, but also that higher-spending physicians do not reliably achieve better patient outcomes.”

The authors point out that many payment-reform and value-based care efforts are targeted to hospitals that, it is assumed, can help influence physician behavior.  They  suggest that this targeting should also directly include physicians,  to help cut  costs.

“Our findings suggest that higher-spending physicians may be able to reduce resource use without compromising patient outcomes. Policy interventions that target physicians within hospitals (e.g., physician-level pay-for-performance programs and reporting of how resource use of each physician compares with other physicians within the same hospital) should be developed and evaluated.”

“Among both hospitalists and general internists, physicians with higher spending per hospitalization had no detectable differences in 30-day mortality or readmissions compared with lower-spending physicians within the same hospital. Given larger variation in spending across physicians than across hospitals, policies that target physicians within hospitals may be more effective in reducing wasteful spending than policies focusing solely on hospitals.”

To read the JAMA piece, please hit this link.


Medicare ACOs seen gaining this year

 

Avalere Health, the  consulting firm, sees financial-risk-bearing Accountable Care Organizations gaining more traction and popularity this year. It says that “providers will feel increasingly comfortable with assuming financial risk in exchange for larger incentives” as more than 9 million Medicare beneficiaries are covered by a total of 480  (ACOs), including 99 new participants, in the Medicare Shared Savings Program (MSSP).

The number of ACOs participating in the Next Generation ACO Model launched by the CMS Innovation Center has more than doubled to 45 this year, from 17 in 2016..

Of the 525 ACOs serving Medicare beneficiaries, 87 are in risk-sharing arrangements that include bearing financial losses if certain cost targets aren’t reached.

Healthcare Dive noted: “Expansion of MSSP and growth in the number of risk-sharing ACOs is due in large part to the passage of MACRA, which is accelerating the trend toward value-based initiatives through the Quality Payment Program. So far, it seems that MSSP has been successful saving a total of $466 million in 2015 and more than $1.29 billion total since 2012.”

“As Congress considers health reform, there is some doubt surrounding the future of value-based initiatives like MSSP, which was established by the ACA. One reform floated by Republican leadership could be detrimental to progress made toward value-based care.”

“This approach would cause Medicare to function more like traditional markets, which would increase financial responsibility borne by beneficiaries and leave improvements to market forces rather than government regulators.”

To read the Avalere report, please hit this link.

To read the Healthcare Dive analysis, please hit this link.

 

 


CMS nominee wants to overhaul Medicaid

 

Seema Verma, nominated by President Trump to lead the Centers for Medicare & Medicaid Services, told her confirmation hearing at the Senate Finance Committee that she’d consider clawing back parts of a rule set during the Obama administration that overhauled Medicaid managed-care programs.
She also  said he doesn’t want to turn Medicare into a voucher program, an idea backed by Health and Human Services Secretary Tom Price, M.D., and thinks  that rural healthcare providers shouldn’t face risk in alternative-payment models.

Ms. Verma said  that one of her priorities would be re-assessing a rule issued under the Obama administration that ordered states to more vigorously oversee the adequacy of Medicaid plans’ provider networks and encouraged states to establish quality rating systems for health plans. She raised the question of whether these mandates have  overly burdened the states financially.

On Medicaid,  she said that  “the status quo is not acceptable.”

“I’m endorsing the Medicaid system being changed to make it better for the people relying on it … and whether that’s a block grant or per capita cap, there are many ways we can get there.”

On Medicare, Modern Healthcare reported that Sen. Ron Wyden (D.-Ore.), the ranking Democrat on the Finance Committee, “said that she sounded like she wanted to keep Medicare a fee-for-service system.” The CMS under the Obama administration set goals to move Medicare away from fee-for-service, which was viewed as prone to abuse and fraud even as it has been very lucrative for physicians and hospitals and encourages much medically unneeded ordering of tests and procedures to maximize providers’ income.

But Ms. Verma denied Senator Wyden’s assertion and said that she supports Medicare focusing more on quality of care instead of volume.

To read more, please hit this link.

 

 

 


More execs being measured for population-health metrics

 

A small but growing number of hospital systems, among them Trinity Health System, America’s fifth biggest and based in Steubenville, Ohio, are linking executive  pay to population-health measures.As a Modern Healthcare article notes, “{T}he group is sure to expand as more health systems gravitate toward emerging value-based models and risk contracts that require hospitals to care for entire populations of people long after they leave the hospital.”

“Since Medicare began reimbursing providers based on quality and dinging them for poor performance in quality measures in programs like Medicare shared savings and value-based purchasing, providers have had to shift their focus to keeping people healthy long-term, rather than treating them only when sick. There’s ample empirical evidence that incentives drive behavior, so it made sense for hospital boards to prod leadership toward quality by putting part of their paychecks at risk.”

”Today, hospital executive compensation incentives are a mix of financial, quality, patient satisfaction and, increasingly, population health measures. Executive compensation experts say the weight is shifting toward the quality portion. Nearly all large health systems incentivize their executives based on cost, and 90 percent include quality measures, like hospital-acquired infections and readmission rates, in their annual plans, according to data from executive compensation firm Sullivan, Cotter and Associates,” Modern Healthcare reported.

But this will be difficult, given that it’s tougher to measure quality, with the subjectivity involved, than to  foll0w the metrics in old-fashioned fee-for-service medicine, especially if patient data from all appropriate providers aren’t  properly integrated in a health system.

To read the article please hit this link.

 

 


A better way for handling readmissions penalties for safety-net hospitals

The recently enacted Cures Act has what sounds like a better way for dealing with hospital-readmission penalties for safety-net hospitals..

A blog entry in Health Affairs notes: “The Hospital Readmissions Reduction Program (HRRP), authorized by the Affordable Care Act, aims to improve care and outcomes for patients by assessing hospitals’ risk-standardized readmission rates. Hospitals that do not meet the readmission standard receive a penalty of up to 3 percent of their Medicare payments. Before the program’s inception, hospitals and academics raised concerns that readmissions penalties would have disproportionate impact on safety-net hospitals and might lead to worsening disparities. And, in fact, studies have shown that safety-net hospitals were more likely to be penalized than non-safety-net hospitals in the first years of the program.”

But, the article says, the Cures Act “changes this by instructing HHS to set different penalty thresholds for hospitals, based on the portion of Medicare-Medicaid dual eligible patients that are served by a hospital. What is critical to note is that this law—in contrast to prior proposals, which argued for changes to the readmission measures—directly mitigates the impact of penalties on safety-net hospitals.”

To read the Health Affairs piece, please hit this link.


Time to fix perverse incentives in Medicare physician payment

A piece in Health Affairs says:

“MACRA is indeed better than what came before, but it still leaves in place perverse incentives that threaten to undermine quality and access for Medicare beneficiaries.”

The authors describe: “what we have accomplished regarding Medicare physician payment and what still needs to be done under the new administration and Congress.”

They conclude:

”While MACRA was a step in the right direction and encourages positive practice changes and provider integration, policymakers have a long way to go in aligning payment models with high-value results. As shown above and predicted by the CMS Actuary report, MACRA can only be considered an interim fix; new legislation is needed to avoid the unintended consequences of current law. Inaction will negatively affect the entire Medicare Part B program with a corresponding impact on health care access and quality for America’s seniors.

“This is not the time for Congress to rest on the belief that its work is done, but to act now to stabilize the long-term viability of the Medicare Program.”

To read the article, please hit this link.


Looking at the new CMS-Pennsylvania model for improving rural hospitals

pafarm

Farm in Lancaster County, Penn., where many Amish people live.

CMS and Pennsylvania are  collaborating on a new model to improve health and healthcare is rural areas of the state.

Here are  Becker’s Hospital Review’s “eight things to know about the model”:

1. The Pennsylvania Rural Health Model is being administered through the CMS Innovation Center and  the state’s health department.

2. The goal  “is not only to improve health and healthcare in rural areas of Pennsylvania, but also to reduce the growth of hospital expenditures across payers — including Medicare — and improve the financial viability of the state’s rural hospitals, according to CMS.”

3. “The model is broken up into seven performance years, according to CMS. It  began  Jan. 12, 2017 and will end Dec. 31, 2023.”

4. “CMS said Pennsylvania rural hospitals participating in the model will receive all-payer global budgets — funded by all participating payers — to cover inpatient and outpatient services they provide. In exchange, these hospitals will use the money ‘to deliberately redesign the care they deliver to improve quality and meet the health needs of their local communities,’ the agency added”.

5. ”Pennsylvania, during each performance year, will prospectively set the all-payer global budget for each participating hospital, CMS said. The all-payer global budget will primarily be based on hospitals’ historical net revenue for inpatient and outpatient hospital-based services from all participating payers, according to CMS.”

6. ”Participating hospitals will also detail a plan to improve care quality by preparing a Rural Hospital Transformation Plan that must be approved by Pennsylvania and CMS.”

7. ”CMS said it will provide Pennsylvania with $25 million, which is a portion of the funding to begin implementing the model”.

8. Any critical-access hospital or acute-care hospital in rural Pennsylvania may participate in the model.

To read the CMS report on the model, please hit this link.

For more information from Becker’s, please hit this link.

 


GOP should avoid Medicare third rail

rail

Rodney Whitlock writes in Health Affairs:

“Republicans have expressed interest in repealing and replacing the Affordable Care Act (ACA), restructuring Medicare to a premium support model, and reforming Medicaid through either block grants or per capita caps. Taking on all three programs is an extremely heavy lift — both politically and legislatively. If it is improbable to do all three, Republicans should openly acknowledge that they are taking Medicare restructuring off the table. This is not meant to belittle the importance of Medicare as a fiscal issue. The reality is that this election was in no way a mandate for major Medicare restructuring, and the President-elect came out rather strongly against the concept during the campaign.

“With premium support-style Medicare reform off the table, the political calculus changes dramatically for the Democrats. The Democrats have been revving up the Medicare privatization rhetoric that has been politically beneficial since 1995. Without Medicare as a rallying point, Democrats would be forced to defend the Affordable Care Act (ACA) which is relatively unpopular and in need of reconsideration. Refusing to engage might not be in their political interest. And while the Medicaid program is critical to the people it serves, it has not been shown to be the salient political issue that drives voters the way Medicare has.”

Of course Medicare has long since become a political third rail because elderly people vote at very high rates compared to younger and/or poorer folks.

To read Mr. Whitlock’s full piece, please hit this link.


Trump’s HHS pick dislikes Medicare bundles program

hip

By RACHEL BLUTH

Kaiser Health News

A recent change in how Medicare pays for joint replacements is saving millions of dollars annually — and could save billions — without impacting patient care, a new study has found. But the man whom Donald Trump has picked to be the secretary of  the Department of Health and Human Services has vocally opposed the new mandatory payment program and is likely to revoke it.

Under the new program, Medicare effectively agrees to pay hospitals a set fee — a bundled payment — for all care related to hip- or knee-replacement surgery, from the time of the surgery until 90 days after. Traditionally hospitals collect payments for many components of care and rehabilitation individually.

Tom Price, M.D., the president elect’s HHS nominee, a congressman from Georgia and a very affluent orthopedic surgeon, has actively opposed the idea of mandating bundled payments for these orthopedic operations, calling it “experimenting with Americans’ health,” in a letter to the Medicare agency just last September. In addition, the agency which designed and implemented the experiment, the Center for Medicare and Medicaid Innovation, was created by the Affordable Care Act to devise new methods for encouraging cost-effective care. It will disappear if the act is repealed, as President-elect Trump has promised to do.

The study appeared Jan. 3 in the Journal of the American Medical Association. Though one of its authors is Ezekiel Emanuel, M.D., a professor at the University of Pennsylvania who helped design the ACA, the research relies on Medicare claims data from 2008 through mid-2015, long before the presidential election.

Starting in April 2016, CMS required around 800 hospitals in 67 cities to use the bundled payment model for joint replacements and 90 days of care after the surgery as part of the Comprehensive Care for Joint Replacement program. The program had previously been road-tested on a smaller number of hospitals on a voluntary basis, which formed the focus of the research.

The study found that hospitals saved an average of 8 percent under the program, and some saved much more. Price has been skeptical that bundled payments did save money, but the researchers estimate that if every hospital used this model, it would save Medicare $2 billion annually.

The bundled payment program works like this: For some specific kinds of medical procedures, including joint replacements or some heart surgeries, the Centers for Medicare & Medicaid Services will add up the costs for the entire episode, from the hospital stay and medical supplies to the rehabilitation afterwards. If the total costs are below a target set by CMS, the hospital gets to keep the savings. If not, the hospital has to pay Medicare the difference. It’s supposed to incentivize more efficient spending and better care coordination between providers, so they can lower costs.

In practice, it seems to be working. Baptist Health System, a network of five hospitals in San Antonio, saved an average of $5,577 on each joint replacement without sacrificing the quality of care, according to the study. Baptist was an early adopter of bundled payments; it began experimenting with them in 2008. Over seven years, the hospital system has cut Medicare’s costs on knee replacements by almost 21 percent.

The savings came without impacting quality. Patients at Baptist Health System were just as likely to be readmitted to the hospital or end up in the emergency room as patients nationally. There was some indication that quality of care may be better, fewer patients under bundled payments had long, extended hospital stays.

In Price’s letter from September, he said that Medicare had exceeded its powers in imposing such bundled payments, which he said took decisions out of the hands of doctors and patients.

That doesn’t seem to be the case, according to Amol Navathe, M.D., an assistant professor of medicine and health policy at the University of Pennsylvania, and one of the authors of the JAMA study. Instead, Navathe and his colleagues suggest that the bundled payments actually fostered greater collaboration between surgeons, administrators and patients because programs could only succeed in saving money if physicians were engaged in creating standardized pathways for care.

For example, the Baptist Health System saved about 30 percent on implant costs, around $2,000 on each artificial joint, by using the least expensive medically equivalent implants as determined by the hospitals’ surgeons.

Usually, physicians are prevented from benefitting when hospitals save money because of anti-kickback laws. Waivers under bundled-payment models mean that surgeons can put in the time to find the best, most cost-effective implants, and share in some of that savings.

“It takes that extra level of effort and coordination, and proactively communicate with [patients],” Navathe said. “Preplanning, setting of expectations and communicating up-front is resource intensive, when they have the incentive to do that they were willing to expend the extra resources to make that happen.”

When bundles included care after a patient’s hospital stay, spending on rehabilitation went down 54 percent. That’s because hospitals took the time to match patients to the right level of care, Navathe said.

Patients who didn’t need to stay in a nursing home or rehab center were set up with home health care or physical therapy.

Price has objected to CMS making bundled payments mandatory, calling it an instance of federal overreach. But bundled payments only work if everyone has to participate, according to Darshak Sanghavi, M.D., the former director of prevention and population health at the Center for Medicare and Medicaid Innovation.

If hospitals can choose whether or not to participate, only the ones that are already delivering care efficiently –and coming in under CMS’s cost target — will use bundles and Medicare will constantly be paying out bonuses. The system needs to be mandatory, Sanghavi said, to pull in less efficient hospitals and give them incentive to change.

“Stopping the programs for ideological reasons I think impedes innovation in a way that is going to consign us to having really, really high costs of care that’s going to continue in the future,” Sanghavi said.

Bundled payments aren’t just for hip and knee replacements. On Dec. 20, CMS announced it would expand mandatory bundled payments to treatments for heart attacks, bypass surgery and cardiac rehab beginning in July 2017. In its waning days, the Obama administration is effectively throwing down the gauntlet to the incoming administration on bundled payments, one of its signature reforms.


How would GOP pay for an ACA replacement?

By JULIE ROVNER

For Kaiser Health News

Leading Republicans have vowed that even if they repeal most of the Affordable Care Act early in 2017, a replacement will not hurt those currently receiving benefits.

Republicans will seek to ensure that “no one is worse off,” said House Speaker Paul Ryan, R-Wis., in an interview with a Wisconsin newspaper earlier this month. “The purpose here is to bring relief to people who are suffering from Obamacare so that they can get something better.”

But that may be difficult for one big reason — Republicans have also pledged to repeal the taxes that Democrats used to pay for their health law. Without that funding, Republicans will have far less money to spend on whatever they opt for as a replacement.

“It will be hard to have comparable coverage if they start with less money,” Gail Wilensky, a health economist who ran the Medicare and Medicaid programs under President George H.W. Bush, said in an interview.

“Repealing all the ACA’s taxes as part of repeal and delay only makes a true replacement harder,” wrote Loren Adler and Paul Ginsburg of the Brookings Institution in a white paper out this week. It “would make it much more difficult to achieve a sustainable replacement plan that provides meaningful coverage without increasing deficits.”

The health law’s subsidies to individuals buying insurance and the Medicaid expansion are funded by two big pots of money..

The first is a series of taxes, including levies on individuals with incomes greater than $200,000, health insurers, makers of medical devices, brand-name drugmakers, people who use tanning salons, and employer plans that are so generous they trigger the much-maligned “Cadillac Tax.” Some of those measures have not yet taken effect.

However, the Congressional Budget Office estimated in early 2016 that repealing those provisions would reduce taxes by an estimated $1 trillion over the decade from 2016-2025.

The other big pot of money that funds the benefits in the health law comes from reductions in federal spending for Medicare (and to a lesser extent, Medicaid). Those include trims in the scheduled payments to hospitals, insurance companies and other health care providers, as well as increased premiums for higher-income Medicare beneficiaries.

CBO estimated in 2015 that cancelling the cuts would boost federal spending by $879 billion from 2016 to 2025.

The GOP, in the partial repeal bill that passed in January and was vetoed by President  Obama, proposed to cancel the tax increases in the health law, as well as the health premium subsidies and Medicaid expansion. But it would have kept the Medicare and Medicaid payment reductions. Because the benefits that would be repealed cost more than the revenue being lost through the repeal of the taxes, the result would have been net savings to the federal government — to the tune of about $317.5 billion over 10 years, said  the CBO.

But those savings — even if Republicans could find a way to apply them to a new bill — would not be enough to fund the broad expansion of coverage offered under the ACA.

If Republicans follow that playbook again, their plans for replacement could be hampered because they will still lose access to tax revenues. That means they cannot fund equivalent benefits unless they find some other source of revenue.

Some analysts fear those dollars may come from still more cuts to Medicare and Medicaid.

“Medicare and Medicaid face fundamental threats, perhaps the most since they were established in the 1960s,” said Edwin Park of the liberal Center on Budget and Policy Priorities, in a webinar last week.

Republicans in the House, however, have identified one other potential source of funding. “Our plan caps the open-ended tax break on employer-based premiums,” said their proposal, called “A Better Way.”

House Republicans say that would be preferable to the Cadillac Tax in the ACA, which is scheduled to go into effect in 2020 and taxes only the most generous plans.

But health-policy analysts say ending the employer tax break could be even more controversial.

Capping the amount of health benefits that workers can accept tax-free “would reduce incentives for employers to continue to offer coverage,” said Georgetown University’s Sabrina Corlette.

James Klein, president of the American Benefits Council, which represents large employers, said they would look on such a proposal as potentially more damaging to the future of employer-provided insurance than the Cadillac Tax, which his group has lobbied hard against.

“This is not a time one wants to disrupt the employer marketplace,” said Klein in an interview. “It seems perplexing to think that if the ACA is going to be repealed, either in large part or altogether, it would be succeeded by a proposal imposing a tax on people who get health coverage from their employer.”

Wilensky said that as an economist, getting rid of the tax exclusion for employer-provided health insurance would put her “and all the other economists in seventh heaven.” Economists have argued for years that having the tax code favor benefits over cash wages encourages overly generous insurance and overuse of health services.

But at the same time, she added, “I am painfully aware of how unpopular my most favored change would be.”

Republicans will have one other option if and when they try to replace the ACA’s benefits — not paying for them at all, thus adding to the federal deficit.

While that sounds unlikely for a party dedicated to fiscal responsibility, it wouldn’t be unprecedented. In 2003 the huge Medicare prescription drug law was passed by a Republican Congress — with no specified funding to pay for the benefits.


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