Hundreds of hospitals and medical groups have entered into contracts with insurers (notably Medicare) to deliver savings and quality gains. In return, hospitals and doctors may get a share of whatever they save. The contracts, called accountable care organizations, are popular but experimental and not without uncertainty.
One source of confusion is how best to determine which patients are included under the contract for the purposes of tallying up the savings and measuring the quality. Get it wrong and it could skew savings and quality results.
Now, researchers at Dartmouth University have crunched Medicare data to test two basic strategies for identifying patients. One picks out patients at the start of the contract and the other at the end of each year. The results were published in Health Affairs.
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Doctors with the Beth Israel Deaconess Physician Organization (a group of 900 Harvard University faculty and an equal number of independent doctors) plowed into the second year as an accountable care Pioneer with a new hospital contract, but no performance results for the last six months.
“I kind of wish we knew,” said Dr. Stuart Rosenberg, president and chief executive of the Harvard Medical Faculty Practice, one of Medicare's first and most experimental accountable care organizations (hence the name Pioneers). Pioneers began roughly one year ago (see here for an interactive graphics on their location and vital stats) and hospitals and doctors face potential bonuses or losses based on quality and cost control performance.
Those results, despite federal officials' commitment and wishes, have been slow to come. “It's been a little bit flying in the dark this first year,” he said.
Interest in accountable care has grown among policymakers and the private market and its use in Medicare continues to expand. Medicare this week said it nearly doubled accountable care organizations in its shared savings program as of Jan. 1.
But the experimental payment model is largely unproven. One early test by 10 medical groups over five years failed to reduce spending, according to the Congressional Budget Office.
Jonathan Blum, the CMS acting principal deputy administrator and director for the center for Medicare, speaking to reporters this week said it would be too soon to publicly release results for Pioneers or any of the more than 100 other Medicare accountable care organizations launched last year.
(Rosenberg said doctors also receive dated data from a private insurance contract with incentives—potential for bonuses and losses—similar to accountable care, thought the lag is not so great, a one-month delay for data that is two months old.)
The lack of data does not appear to have dampened interest in the payment model.
Hospitals for the first time this year agreed to share in the financial risk of the doctors' new pay models, Rosenberg said. Hospitals share the risk for high cost hospitalized patients under the new arrangements. The new arrangement will receive $2 million annually each form hospitals and the physicians for investment under the newly created Beth Israel Deaconess Care Organization.
But a large majority of the financial incentives under the program will be paid to primary care doctors, not hospitals. “We think they have been underinvested in and underpaid” and they have value as care coordinators in accountable care, Rosenberg said.
But if primary care doctors succeed, fewer patients may be hospitalized and hospital revenue falls.
Hospitals may benefit another way, Rosenberg said, if the accountable care organization succeeds in attracting more of the market.
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Policymakers who hope to see hospitals respond to financial incentives for better quality care will be disappointed by a newly published report on costly, potentially deadly, hospital-acquired infections.
My colleague Maureen McKinney reported on the results, published in the New England Journal of Medicine: The 2008 Medicare policy to stop payment for catheter-associated bloodstream and urinary tract infections contracted by patients during a hospital stay did not produce a hoped-for drop in infection rates.
The rate of bloodstream infections, on the decline before the policy change, continued to drop at about the same pace as before the pay cut, the researcher said.
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The week began with the start of Medicare's penalties for hospitals with higher-than-average rates of heart attack, heart failure and pneumonia patients who leave the hospital only to return within 30 days.
But Medicare is not the only payer to penalize hospitals for repeat visitors. Medicaid, in some states, also cuts hospital payments based on readmissions. As we reported in late September, changes to Medicaid policy have increased financial incentives for hospitals to reduce hospital admissions.
Now Massachusetts Medicaid is scheduled to increase its readmission penalties starting Nov. 1. The state began in 2011 to cut payments by 2.2% for hospitals with excess readmissions.
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Hospitals increasingly ask patients to pay a medical bill when they arrive or before they leave. Here's a look at how one Minnesota hospital went too far to collect bills and violated Medicare rules and a law that safeguards access to emergency medical care, regardless of ability to pay.
The University of Minnesota Medical Center, one of seven hospitals owned by Fairview Health Services, is facing a full audit of its compliance with Medicare rules and a follow-up inspection of how well it adheres to the Emergency Medical Treatment and Labor Act, which says hospitals must hold off any talk of payment until a patient has been examined and stabilized.
Collection efforts at Fairview hospitals came under public scrutiny this year after an inquiry by Minnesota's attorney general into Accretive Health, the healthcare billing and collection company Fairview hired. Accretive, based in Chicago, reached a settlement with the attorney general in July that barred the company from Minnesota for at least two years. Accretive denied any wrongdoing.
Nonetheless, an investigation into the University of Minnesota Medical Center found that hospital bill collectors harassed patients and violated EMTALA.
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Diversity is a big issue in healthcare and not just with patients, caregivers and executives. It turns out there's diversity in financial incentives that are part of the accountable care organization phenomenon.
In Maryland, doctors will be paid bonuses later this year tied to quality reporting under a new shared-savings payment model. The experiment includes the state's five largest insurers and Medicaid managed care.
In Minnesota, early results of bundled payments for heart attacks did not yield savings, but similar payments for diabetes, hypertension, coronary artery disease and hip and knee replacements appear on track to share savings with providers in Illinois and Pennsylvania who have had success reducing potentially avoidable complications.
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Pay doctors to churn through patients, procedures and tests, and they will. As a business model, “do more, earn more” has been singled out by policymakers and the industry as deeply flawed and one reason the U.S. spends so much on healthcare.
But, as two health policy experts point out in the Aug. 8 Journal of the American Medical Association, efforts to find another way—including accountable care—have so far produced little change.
Payment for each procedure or visit continues to underpin many emerging accountable-care organizations, including Medicare's popular shared savings program, wrote Drs. Allan Goroll of Harvard University Medical School and Stephen Schoenbaum of the Josiah Macy Jr. Foundation.
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Economists, physicians and policymakers have put forward alternative arguments for how to best curb health spending in separate papers published online by the New England Journal of Medicine.
What follows are summaries of the pair of proposals, one that relies on state regulation, federal incentives and Medicare policy to push reforms and another that would convert Medicare from a guarantee of benefits for seniors into a program that provides enrollees with a subsidy to buy insurance.
The former was recommended by nearly two dozen health policy experts including recognizable names such as Dr. Donald Berwick, former head of the agency that oversees Medicare and Medicaid; David Cutler, a Harvard University health economist; and Peter Orszag, former director of the Office of Management and Budget.
The 23 authors made 11 recommendations, which you can read in full here (PDF). The list, they wrote, included proposals with a chance of working and being adopted.
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Safety net hospitals could see revenue squeezed on more than one front under health reform.
As my colleague Maureen McKinney reported this week, safety net hospitals may fail to earn performance-based payments, according to research published in the Archives of Internal Medicine.
The authors compared performance of safety net hospitals on patient experience measures tied to value-based payments and found they “performed more poorly than other hospitals on nearly every measures of patient experience and that gaps in performance were sizable and persistent over time.”
Under value-based payments, Medicare holds onto 1% hospital payments, which is allocated based on hospital performance.
Meanwhile, health reform, as signed into law, included a shift in the financing of healthcare for people who cannot afford it. The law reduced subsidies to offset hospital losses on uninsured patients by $36 billion over 10 years. But projected 34 million would gain subsidized insurance through Medicaid, the Children's Health Insurance Program or exchanges under the law. Hospitals would see fewer direct subsidies for the uninsured as more patients gain insurance.
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