Payment Reform

COST: A Bit More Explaining about Accountable Care....

We posted this morning a guest post by an attorney about Accountable Care Organizations and physician-hospital integration. Many of our readers are quite familiar with ACOs but for those of you who want to learn a bit more, here are some useful links:

From CQ Healthbeat in April, via the Commonwealth Fund:

April 13, 2009 -- Washington just can't get enough of accountable care organizations (ACOs). Members of Congress are talking about them as a way to save money and increase quality in the U.S. health care system, and the Medicare Payment Advisory Commission (MedPAC) again probed the concept as it relates to Medicare at its April 9 meeting.

An explanation from the folks at the Dartmouth Atlas and Brookings in January (related to a Health Affairs article):

QUALITY: Stopping the Mistakes

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."

HEALTH REFORM: Overheard on the Metro

En route to work today, we could not help but overhear a conversation between two men sitting behind us. One was about 35 or 40, and married to an oncologist. The other was maybe 55. His sister is an oncologist, and he has another physician-business consultant in the family in Massachusetts. The conversation went something like this:

Older man: How are things at the hospital?

Younger man: The hospital is hurting because of the economy but the oncologists are doing fine. Cancer treatment isn't elective. Besides the payment system is great for oncologists. They get paid by procedures. And they do lots of procedures. It's not like the pediatricians in the office practice. They're getting killed, insurers don't pay much.

Older man: Yes that's what I hear. My sister is at Kaiser Permanante, so she doesn't make as much as some of the oncologists in private practices, but still she likes it.

Younger man (sounding apologetic): My wife is in academic medicine so she isn't making as much as other oncologists either. But really, if you do procedures, you get paid a lot. It's all about procedures.

Older man: I read somewhere that only about 15 percent of medical students want to go into primary care. You can't blame them. They don't do procedures.

HEALTH REFORM: How Industry Pledges Came About -- And Amplifying the Message

Wondering how those industry groups ended up at the White House this week with their offer of  $2 trillion in health care savings? According to the Washington Post's Ceci Connolly, it centers around President Obama's Health Care czar (czarina?) Nancy-Ann DeParle.

Eager to be at the bargaining table for this year's health-care reform debate, Karen Ignagni, president of America's Health Insurance Plans, told DeParle that the health industry was willing to wring about $2 trillion in savings out of health spending over the next decade.

"I was skeptical," DeParle recalled in an interview this week. She thought, "They probably don't even know what these numbers mean."

A few weeks later, in mid-April, Ignagni, who opposed President Bill Clinton's reform effort in the early 1990s, enlisted a hospital group and a labor union. DeParle still wasn't satisfied. "I need to see that it's more than just the three of you," she said she told them.

Over the next month, as DeParle kept a wary distance, a coalition was built and the proposal refined. Finally DeParle was sold, and on Monday she brought the group to the White House, where industry titans better known for killing health-care reform 15 years ago found themselves basking in presidential praise.

REFORM: The Challenge of Health Care and Entitlements

We came to the National Press Club today ready for a debate on health care and entitlement reform. What we got was a lot of consensus on the serious challenge of health care cost growth and the need to do everything in our power to bend the cost curve. That, and an interesting bowl of gazpacho with chunks of watermelon in it….

Our cold soup confusion aside, we were pleased to participate in the panel of experts put together by our colleague Maya MacGuineas, Director of New America’s Fiscal Policy Program and President, Committee for a Responsible Federal Budget.

Our co-panelists addressed the need to make hard choices in health care and the budget and the potential of Medicare to drive changes in the system. With such a broad range of expertise in fiscal and health policy, there was naturally some disagreement on priorities and political viability of different options. But every panelist shared the goal of getting health care costs under control. The purpose of our presentation was to show that there are real, tangible ways of holding down costs that can provide the basis of meaningful reform.

 You can find the whole discussion webcast here. Below are a few of our key themes:

HEALTH REFORM: The Business of Bundling

I've been doing a lot of traveling, attending meetings about health care quality and payment reform, and I wanted to share a bit of what I learned at the recent Healthcare Payment Reform Summit in Pittsburgh. The topic was "bundling"—paying for an episode of well-coordinated care. In the current system, we pay for quantity of procedures, not quality or outcome.  Everybody at the Pittsburgh summit understood that this procedure-focused system leads to overutilization of care.

Moving from the status quo to bundling will take some careful planning and transitioning, but Francois de Brantes gave a presentation that underscored how worthwhile it can be. He presented data showing that improved management of diabetes and heart disease leads to better quality—as well as a 50 percent drop in costs.