Health Care Payment Reform

This is harder than I initially thought it would be, and more important than I initially thought.

That’s what Bruce Cutter, MD, says about the development of clinical pathways for cancer care, one component of Cancer Care Northwest’s payment experiment with Premera Blue Cross.

Cancer Care Northwest, a 16-physician practice in Spokane, Washington, has been working with the area’s largest insurer, Premera Blue Cross, for six years to find a better way to deliver and pay for cancer care. Read my article in Oncology Times to find out more.

I  interview physicians every week, and I often have the same thought as Dr. Matthew DiPaola expresses in a recent blog post.

The sense of dreary inevitability about the health care system that too many doctors walk around with these days must end.  Doctors, it’s time to take ownership of your profession…before someone who cares much less than you, does.

Many are uninformed about health care policy and seem beaten down by the system, as if they are powerless to do anything about it. This strikes me as troubling because the truth is physicians are the only ones that can save the system. Ultimately, health care happens through interactions between physicians and patients, and any health care reform ideas that physicians do not buy into will be sabotaged either overtly or covertly by their actions.

Thus, the future of the health care system depends on leadership from physicians. True, they did not sign up to be health policy leaders; their job is to be physicians. But no patient signs up for a broken leg; when a leg breaks, the patient takes immediate action to get it fixed so normal activities can resume.

More physicians need to take immediate action to fix the health care system (both in their daily patient care decisions and in advancing policy changes that can save the system) so they can practice medicine in a healthy health care system.

The role of doctors in health care reform cannot be overstated–and yet it is rarely mentioned.

Arnold S. Relman, MD, has a valuable perspective in today’s New England Journal of Medicine.

Mayo Clinic points out a problem with health care reform proposals on the table.  Since President Obama likes to highlight Mayo as an example of the way health care should be delivered, the nation’s health care payment system needs to support its high-quality, low-cost model.

According to a story on Minnesota Public Radio:

Mayo contends that there can’t be any real reform unless Medicare starts rewarding systems that provide quality health care at reasonable prices.

Sen. Max Baucus wants his health care bill to include changes to the Sustainable Growth Rate folly. Does he have an idea of how to do that? I’m eager to see what happens here.

In opening remarks, Baucus identified a major challenge going forward.

I want to acknowledge up front that we did not do as much to correct the payment of doctors—especially as I would have liked under the incredibly misnamed sustainable growth rate (SGR). The SGR needs to be fixed permanently. I look forward for further progress on this.

Today is a big day in health care, as the Senate Finance Committee starts marking up Sen. Max Baucus’s health care proposal.

Here’s what the American Medical Association thinks about the proposal. It’s not surprising to see AMA trying to protect physician incomes, of course. But its list of concerns suggest that the association is unwilling to support some of the basic tenets of health care  payment reform.

For example:

• AMA opposes mandatory participation in the Centers for Medicare and Medicaid Services Physician Quality Reporting Initiative. While PQRI is flawed in execution to date, quality reporting and accountability are essential to payment reform.
• AMA opposes payment reductions for physicians identified as high-resource users. Efficiency is not important in the country with the world’s highest health costs??
• AMA opposes budget neutral financing for primary care bonus payments.  How will primary care pay be raised in relation to other specialties if all specialties make more money?

Senator Max Baucus’s health care proposal would provide financial incentives to hospitals and physicians willing to work together as accountable care organizations. Here’s what is required, according to his proposal:

To qualify as an ACO, an organization would have to meet at least the following criteria: (1) agree to become accountable for the overall care of their Medicare fee-for-service beneficiaries; (2) agree to a minimum three-year participation; (3) have a formal legal structure that would allow the organization to receive and distribute bonuses to participating providers; (4) include the primary care physicians for at least 5,000 Medicare fee-for-service beneficiaries; (5) provide CMS with information regarding primary care and specialist physicians participating in the ACO as the Secretary deems appropriate; (6) have arrangements in place with a core group of specialist physicians; (7) have in place a leadership and management structure, including with regard to clinical and administrative systems; (8) define processes to promote evidence-based medicine, report on quality and costs measure, and coordinate care; and (9) demonstrate to the Secretary that it meets patient-centeredness criteria determined by the Secretary, such as use of patient and caregiver assessments or the use of individualized care plans.

And here is how incentive payments would be determined:

To earn the incentive payment the organization would have to meet certain quality thresholds. In determining the quality of care furnished by an ACO, the Secretary would be required to use measures such as: (1) clinical processes and outcomes; (2) patient and caregiver perspectives on care; and (3) utilization and costs (such as rates of ambulatory-sensitive admissions and readmissions).

Bob Wachter’s post on incident reports about medical errors and near-misses would be a funny unintended-consequences story if the health care industry could afford to waste money and time on patient safety.

When I visit hospitals to talk about patient safety, they often show me their IR reporting trends. If the number of IRs has gone up over the past year, they breathlessly proclaim, “This is great. We’ve succeeded in creating a reporting culture – the front line personnel believe that we take errors seriously. We’re getting safer!”

That would sound more credible if hospitals with downward trends didn’t invariably shout, “This is great, we have fewer errors! Our efforts are paying off!”

The Department of Health and Human Services, building off work started by private insurers and Medicaid in Vermont, finally is starting its medical home demonstration.

It will be interesting to see if universal alignment of payment systems achieves the efficiencies and care improvement that we are all hoping for.  According to HHS press release:

This demonstration will mark the first time Medicare will be a full partner in these experiments and the practice model would, for the first time, align compensation offered by all insurers to primary care physicians.  Instead of each third party payer and public program adopting different approaches, using different ways of measuring performance and creating different payment incentives, multi-payer programs will join together to work toward common goals to improve the delivery of care.

This news from today’s Wall Street Journal, while not surprising, might give some health care reform opponents pause to consider where this trend will end if nothing is done to change the way health care is delivered and purchased.

According to the story:

In 2010, nearly two-thirds of employers plan to shift more of the cost of care to workers and their families through higher premiums contributions, deductibles and copayments. One out of five companies plans to cut out higher-cost health plan options in favor of less generous coverage, according to the preliminary findings from a survey by Mercer.