HEALTH REFORM: Evidence-Based Change You Can Believe In

About a year ago, Drew Altman, president and CEO of the Kaiser Family Foundation, wrote an essay about "delivery system" folks and "coverage" folks. When I saw Drew soon after that, interviewing him for an unrelated magazine piece,  I said I thought the overlap in that Venn diagram of coverage and delivery was both bigger than he described it, and expanding faster than he perceived it. I thought that as health reform became something that might really and truly happen the "coverage" camp had a growing appreciation of how delivery system reform, properly done, could improve quality of care while saving money needed to pay for that very same expansion of coverage. And the delivery system camp, at least the people I knew reasonably well, certainly thought it was high time that the United States did what every other developed country on the planet (and some of the not-so-well developed ones) has managed to do: make sure that everybody has decent affordable health coverage.

So it was a pleasant surprise to find Kaiser (which I think of as more on the coverage side) publishing a very useful, worth-reading paper on what we do and do not know about delivery system reform, at least with regard to Medicare.

The formal title is "Strategies for Reining in Medicare Spending Through Delivery System Reforms: Assessing the Evidence and Opportunities." The author is Randall Brown of Mathematica Policy Research.

We'll divide this post in two, possibly three, as it's a bit long and we keep thinking of more things we want to say. First, we'll look at what Brown writes about -- some of the most talked about ideas for change in Medicare (medical homes etc). Later we'll look at some of the other steps Brown recommends for bringing about rapid savings, targeted at a slice of the Medicare population that has chronic diseases and frequent hospitalizations.

I should say at the outset, too, that some experts that I know and respect (my delivery system acquaintances) think Brown overstates the obstacles. He draws on the published literature from past experience -- which by definition lags what we can see when we look around in the real time real world. And when we do look around,  we see doctors and hospitals and health systems pushing ahead with innovation.

But it's still fair to ask how quickly those early adopters will become the norm, and how much the change-resisters will, well, resist change -- even if Congressional health reformers do swap out some of the obsolete carrots and sticks in our current payment environment. Also Massachusetts, which started with coverage, is now tackling delivery system and cost. We hope we can learn from them, just as we have learned from Massachusetts about affordability and access and insurance exchanges.

All that not withstanding, I found Brown's paper quite a useful picture of what we need to keep in mind as we move forward.. (Also, note that he was writing mostly in the context of what would happen under what was then the latest version of the House bill.)

I hope he forgives me for starting with an oversimplification of his take-home message:

1) A lot of the ideas being discussed won't generate savings during the next five to 10 years ("although they could have a sizable impact over the longer term"

2) There are huge practical, legal and political obstacles to some of these ideas (especially Accountable Care Organizations and bundling)

3) There are a bunch of things that aren't being discussed enough right now that deserve more attention. They aren't such heavy lifts and they could do a lot, even in our current fee-for-service environment, for the large slice of the Medicare population that is frequently hospitalized with chronic diseases.

Now onto a slightly less oversimplified version of his critique of specific popular items on the reform agenda:

• Medical homes are potential savers beacuse they can improve care coordination and wrap case management around patient treatment. But the "Medicare medical homes demonstration program, as currently designed, is not likely to achieve near-term savings because it targets too broad a range of patients, and dilutes focus on those individuals most in need of a medical home." He also notes that small practices -- and most physicians are still in small practices and most Medicare patients get their care from small practices - don't have enough chronically ill Medicare patients to support the additional staff needed for a successful medical home model (or in this context is it a medical model home?)

• Electronic health records are definitely needed to improve health care, but it will "take a long time to offset startup costs."

• Bundling is a good concept but there will be a food fight about who gets paid for which services, about how to allocate both payment and responsibility. Bundling payment for acute and post acute services may be "difficult to implement given the ambiguities and tensions regarding what services are to be bundled together, which providers (hospitals, skilled nursing facilities (SNFs), home heath agencies, specialists, and other physicians) will share in the bundled payment for a particular patient, and how payments are to be distributed among them."

• Pay for Performance is a valid quality improvement tool, but it doesn't necessarily take into account cost.  And sometimes better quality, such as higher rates of screening, can raise costs at least in the short term.

•  Accountable Care Organizations are challenging. He can see them evolving in settings where physicians are on staff and salaried, but creating collaborations out of hospitals, physicians groups, clinics, home heatlh agencies, consumers, insurers and others will require "seismic change in the delivery systems." It would also require overcoming a zillion legal and regulatory obstacles. (For more detail on Brown's views of ACOs and how they may or may not befall the same fate as HMOs, see page 11 of the PDF. We also had an attorney guest-post a few months ago on possible hurdles to creating ACOs and how to overcome them.)

• Comparative effectiveness will or will not (eventually) be a curve-bender depending on how Medicare uses the data, and whether the studies are done right. (Brown wants clinical trials, he's not a big fan of clinical registries).  The direction he wants to see us go in is letting Medicare take cost and effectiveness both into account -- with timely exceptions made for patients who need the costlier treatment or drug or procedure for one good reason or another.

Tomorrow or maybe Monday, we'll take a look at what Brown's more optimistic about in the short-term. And there's quite a bit of it -- including several challenges and solutions we've been writing and thinking about ourselves.