When St. John's Health System joined a CMS demonstration project on pay-for-performance for big medical groups last year, officials realized they were taking a financial risk. In addition to spending at least $60,000 to deploy a patient registry, the Springfield, Mo.-based integrated health system added about 10 full-time employees to help oversee the comprehensive disease-management services that are a key element of the project, invested tens of thousands of dollars of "in-kind" services and assigned several special committees to coordinate the three-year program.
Like the 10 other large integrated medical groups involved in the CMS project, St. John's has not yet realized any of the expected financial incentives that are a key part of the demonstration, which marked its one-year anniversary earlier in April. Still, the gamble is expected to pay dividends for all participants, and perhaps the entire provider community, if the CMS ultimately decides to begin compensating doctors who use the kind of coordinated disease management that many experts believe will save huge sums of money in the long run.
"We got into this because it's the right thing to do, and we wanted to be at the table with CMS to help resolve issues around delivering cost-effective and high-quality care," said Janet Pursley, vice president of medical-management services at St. John's. "Of course, the system had to put a certain amount of funds at risk without any guarantee of return. But it was the board's decision to participate because we're hoping the CMS gains a comfort level with the fact that the current financing system does not lead to coordinated care.
"We're hoping this can put care management and disease management at the forefront of the reimbursement model."
The focus of the demonstration project has been on disease management as a way to both improve care and reduce costs for patients with chronic conditions. If this pilot is successful, most observers believe that the CMS will eventually recommend a boost in payment for coordinated care, which is not currently covered by the federal Medicare program.
While there is nothing quantifiable thus far, John Pilotte, the CMS project officer for the pay-for-performance plan, said it is clear that participants are investing in information technology and the redesign of workflow processes to support chronically ill patients with more efficient care. "We're also seeing better coordination in the hand-off of care post-discharge, either into a post-acute setting or back into the home, and better monitoring of these patients," he said.
Pilotte expects the demonstration will "help inform" policymakers about how coordinated care can improve outcomes and cut costs, leading to potential changes in the way doctors are reimbursed. "We'll know a lot more at the end of this demonstration," he said. "There's certainly a lot of interest" in that area.
But it could take another year -- sometime around the spring of 2007, or the second anniversary of the pilot project -- before the CMS provides any incentives based on a complicated annual calculation that determines quality and cost savings based on a review of patient charts and claims data. It remains unclear how much the budget-neutral pilot project will pay to the groups over its three-year run.
Albert Fisk, M.D., the medical director of the Everett (Wash.) Clinic -- another of the large medical groups involved in the program -- estimates that the cost of participation will run from $250,000 to $500,000 per year.
"I'll be very happy if we break even," he said, "and even happier if we make some money. But I'm happy we're involved."
The Everett Clinic has identified several issues in an attempt to improve care to seniors with chronic conditions, said James Lee, assistant medical director. That includes improving post-emergency room and hospitalization follow-up as well as enhancing palliative care for as many as 10,000 patients.
"The key question we're trying to answer is, 'What do they need -- what kind of a model can we come up with that provides good service and is also financially sensible?' " Lee said. "It's still really premature to make any definitive comment about whether this works. But I believe that any disease-management program designed to address these issues has to have the patient as a partner -- that's the biggest message we're getting."
For the demonstration project, St. John's created a comprehensive health registry to track the needs of patients suffering from diabetes, congestive heart failure or coronary artery disease. As part of the CMS project, officials will track records on about half of the 28,000 men and women now included in the registry, Pursley said.
Like the other groups involved in the project, the Marshfield (Wis.) Clinic, which is focusing on coordinated care for diabetics in the first year of the program, already possessed the cutting-edge information-technology resources needed to create registries, gather information and provide it to federal officials at the CMS, said Ted Praxel, M.D., medical director for quality improvement and care management at Marshfield. But despite the existing infrastructure, he said, the project, which is being expanded to patients with hypertension and coronary artery disease over the next two years, has been daunting.
"One reason we felt we could participate in this was because of our information systems," Praxel said. "But, having said that, it's still been something of a learning experience, gathering all this data and feeding it back. I think CMS has made it clear that it is committed to a pay-for-performance strategy. There's already increased reporting to the public on quality data, and, hopefully, our experience (in the pilot) will help position us to those needs in the future."