Medicare

Here's a little gem from Gary Schwitzer's health news blog:

A friend who works on Capitol Hill took a call from an elderly constituent today who said she opposes health care reform because "it will rationalize health care in our country."

Another cloud in the silver lining of health care reform...

After attending a Sunday evening wedding in New York earlier this month, I woke up at some uncivilized pre-dawn hour to return to DC for work and to attend an interdisciplinary (and ideologically eclectic) lunch here at New America. We had some foreign policy types, and some domestic policy types, and even one Hollywood type, and the conversation floated from one theme to another (universal pre-K? the war in Afghanistan?) in a rather interesting way until a conservative participant posed the question that dominated much of the rest of our luncheon.  Doesn't Zeke Emanuel, he asked, want to ration care to save money and stop access to expensive cancer drugs? Doesn't he want to remake the Unites States health system over to look like Britain's? (I'm paraphrasing, but only slightly).

These may be some of our favorite paragraphs yet in all the recent articles we've read about health care reform, taken from a Kevin Sack New York Times piece on how older Floridians are fretting about health reform:

Whatever the feelings about Mr. Obama, there was widespread appreciation that he had taken on an ambitious agenda.

"You have to give the man a chance; he took on a big task," said Sylvia Bank, who said she had just celebrated her 88th birthday, prompting a friend to knock on wood. "If it was my son, I wouldn't let him be president, not at this time."

Hilda Gruber, 84, glanced up from her cards. "What does that have to do with the price of eggs in Afghanistan?" she asked.

When you have a chance, get the grandparents away from watching those blood-pressure raising town halls on their televisions, and tell them this. Health reform is not about chopping Medicare. It's about making it better. And saving lives.

A test program now in its fourth year has shown how it can work. Hospitals that do a great job get rewarded. Those with a poor performance, get penalized. 

Premier, Inc., a health care alliance based in North Carolina, released the results of year four of their landmark Medicare demonstration project this week. You might remember last year I blogged about year three, one of the first instances of a pay-for-performance initiative enforcing financial penalties on low-performing providers. I even got a tiny mention on Modern Healthcare (free registration required).

Year four again brought good news about higher quality. BNA says:

The health reform bills wending their way through Congress lay the groundwork for a long overdue shift in our system. Right now, as guest blogger Dr. Ira Byock writes, we don't have a "health" care system, we have a "disease care" system. After all, he reminded us, the word "patient" comes from the Latin: one who suffers.

The pending bills would expand prevention and wellness, create medical homes in Medicare (and encourage them in Medicaid), strengthen primary care and care coordination, and start to tackle avoidable hospitalizations and rehospitalizations. The Senate HELP committee even starts to address some of our needs in long-term care. But Dr. Byock, director of palliative medicine at Dartmouth-Hitchcock Medical Center and the author of  Dying Well argues that if we want to finally address our runaway cost and quality challenges, we must  to think outside the conventional health financing box, toward a system that literally cares for and about  our health. 

All health systems, even good ones, make mistakes. Some have horror stories. Surgical sponges left inside of patients, deadly infections that come from within the hospital rather than the outside world, operations on the wrong body part. Within the past few years, Virginia, Maryland, and DC have enacted laws requiring hospitals to disclose such patient injuries to regulators, The Washington Post reports. The goal is to make the system safer.

Regulators are hoping to reduce preventable deaths and injuries, sometimes called "never events" because they should "never" happen. According to the Post, one hospital in Northern Virginia reported about two dangerous blood infections for every 1,000 IVs inserted in patients. Currently, insurance companies generally reimburse hospitals for medical errors. If, for example, a patient were to come into the hospital for a low cost procedure, and get an infection from an IV because their doctor did not wash his hands, the hospital would bill the insurance company for the much higher cost of treating the hospital acquired infection. As the Post puts it, "if a lawn service mowed down your rosebush while cutting the grass, you wouldn't pay the company to replace it."

Congress is back in session for what figures to be a frantic month of July. As the House and Senate gear up for a packed schedule of health reform hearings and mark-ups to meet a self-imposed August deadline, the White House has been working very hard to line up support outside the halls of Congress and keep the process moving.

First, there was the much-reported stakeholders' letter to the White House pledging to help slow health care spending by some $2 trillion over 10 years. Then, there was the $80 billion agreement with PhRMA—endorsed by the AARP—to lower costs of prescription drugs and help pay for reform. Just last week, the nation's largest employer, Wal-Mart, in a letter to the president also signed by SEIU and the Center for American Progress, stated that it was open to an employer mandate as part of the shared responsiblity it and other businesses bore for health reform.

Next up—hospitals.

My colleague Joanne Kenen ended a post earlier this week with the thought, "It's the Incentives, Stupid!" MedPAC basically reached the same conclusion (albeit worded more diplomatically) in its June report, Improving Incentives in the Medicare Program. I already posted on Accountable Care Organizations and on how Medicare can bring about changes in physician training, particularly residencies, to further our national goals of improving primary care and care coordination across settings, in and out of hospitals. Today I'll conclude with a look at incentives for physicians and beneficiaries.

"Incentives matter" is a basic rule of economics. All other things equal, when the price of a good or service goes up, people buy less; when the price goes down, people buy more. Yes, there are exceptions. As Mark Twain summed it up, "...in order to make a man covet a thing, it is only necessary to make the thing difficult to attain." (Hat tip to Dan Ariely's Predictably Irrational.)  Alas, medical imaging is not difficult to attain (if your are insured). But I'm getting ahead of myself.

Here's part two of my thoughts on MedPAC's June report, Improving Incentives in the Medicare Program.   Yesterday I posted on Accountable Care Organizations, or ACOs. Today I'll focus on how Medicare pays for medical residents.

Medicare doesn't pay for medical school per se, but the federal government does heavily subsidize medical education, particularly residencies. In 2008, Medicare spent $9 billion—about $100,000 each for 90,000 residents annually—to teach physicians how to take care of mostly acutely ill patients in hospital settings. But MedPAC called for bold changes. If we want to change our delivery system, we need to change medical education in tandem. MedPAC wants education and training to encompass disease prevention, chronic care management, and care coordination across settings. MedPAC is especially concerned about a lack of "formal instruction and experience in multidisciplinary teamwork, cost awareness in clinical decision making, comprehensive health information technology, and patient care in ambulatory settings."

That last item, "patient care in ambulatory settings," is of particular interest to us. As MedPAC states:

MedPAC recently released ts annual June report, this year titled Improving Incentives in the Medicare Program. As usual, it's a leader in the reform conversation and full of good ideas. I'm posting a mini-series on it, starting with the chapter on Accountable Care Organizations, or ACOs. 

What exactly is an ACO? Well, there is no exact answer. These entities could look different from one another. They  could be based around an integrated delivery system, a physician-hospital association, or an academic medical center. But they must include three components: primary care physicians, specialists, and at least one hospital. These three groups would share responsibility for the quality of care and the cost of care received by the ACO's patients. If the ACO achieves both quality and cost targets, it could receive a bonus; if it fails, its members could face lower Medicare payments. The incentive is to deliver coordinated, efficient care.