Tips from gaining health

The Disease Management Care Blog is still waiting to be listed in the CMS "clear accurate information is essential in times like these" Op-Eds & Blogs web page.  Will the CMS mandarins find favor with this particular DMCB post and include it with the other insightful masterpieces theyve linked, like "Health Reform Helps Many" and "Public Service Recognition Week?"

Probably not, says the DMCB.  Its not because the DMCB is again linking this report showing how CMS seems to be incapable of delivering disease management services to its fee-for-service enrollees.  Its not because of this report revealing how Medicares Hospital Compare isnt having much of an impact on outcomes.

Its because the DMCB is bringing up the inconvenient truth of this independent evaluation of Medicares Premier Hospital Quality Incentive Demonstration. This demo tested whether pay for performance can increase the quality of care for acute heart attack, chronic heart failure, pneumonia, heart bypass surgery and total knee as well as hip replacements.  33 measures for these conditions were collected from 252 participating hospitals. The hospitals that scored in the top measurement deciles received bonus payments, while those that were underperforming were hit with a payment penalty.

Think of it as "pay-for-performance" for hospitals.

After excluding hip and knee surgery (where mortality rates are very low), the researchers were interested in measuring whether the Premier Incentive Demo was associated with one of the most important outcomes of all: lower death rates. Based on 6 million patients worth of data from 2002 through 2009, the researchers found that there was no difference in overall 30-day mortality rates for all of the four conditions compared to non-demo hospitals (11.8% vs. 11.7%). In addition, mortality rates for the individual conditions of heart attack, heart failure and pneumonia were no different either. For heart surgery, there was a slight excess of deaths in the Premier group (4.1% vs. 3.3%).

These results are quite a contrast from this Premier press release that estimates that the Demo "saved an estimated 6500 heart attack patients." The DMCB suspects that that particular number was derived and extrapolated from prior studies linking less tobacco cessation or greater aspirin use to improved death rates.

It seems the math may have been wrong. And it was that same math that led the architects of the Affordable Care Act to establish the Medicare Hospital Value-based Purchasing Program ("Hospital VBP"). As the DMCB understands it, its just now getting underway.

Egads.

Go to this particular HHS web page and youll find that the Department....

"...monitors and evaluates programs to assess efficiency and responsiveness and to ensure the effective use of information in strategic planning, program or policy decision making, and program improvement."

Hopefully, the leaders at HHS will be doing precisely that by reexamining its assumptions and its ability to achieve real value with the Hospital VBP.

Why do different insurers pay different amounts for the same service?  While Medicaid and Medicare are notorious for their take-it-or-leave-it fee schedules, competing commercial insurers payment rates for vary considerably across providers, even within the same region.

Uwe Reinhardt tackles this mystery in a just-published article in Health Affairs.  Not only is this “price discrimination” untidy, says he, it’s also been unfairly credited as being evidence of “cost shifting.”

It turns out that there are some credible studies that show that as public payer fee schedules get squeezed, commercial insurers seem to pay more.  Yet, in order for a cause and effect to be present, that would mean that providers are not acting in their own economic self interest and are waiting on Medicare and Medicaid before bargaining with their local managed care plans. To Dr. Uwe, that seems suspect.  That would mean commercial insurers have little negotiating leverage which would also mean that the U.S. cannot rely on them to control costs.  Yikes.

Compounding this untidiness are the big swings in the costs of goods and services in an opaque market that seems better suited to upside price gouging and not downside discounting. This is not only hurting the uninsured, the dysfunction is now reaching into the pocketbooks of the middle class.  No wonder Americans are grumpy about the cost of health care.

Dr. Uwe’s suggestion? An “all payer” system.  Not to be confused with a “single payer” system involving some sort of Obamaesque Price Czar, all payers would negotiate prices with all providers in regional blocks across counties, regions or even states.

Some of the European countries use this approach and so, by the way, does the state of Maryland.  The role of government would presumably be limited to brokering a yearly Big Meeting between representatives of both camps; in fact, government could make sure all parties agree to prices that are indexed to the GDP.  The result?  Patients would benefit from an average price applied equally to all, insurers would know they’re paying their fair share and best of all, hospitals would get a fair price for their services.

The DMCB likes the approach but suspects that politicians would be tempted to meddle by showing favoritism.   It would per to see it implemented at the state level while the Feds are kept at arms length.  It should be limited to hospitals at first.  Depending on how things work out, it could be tested on a trial basis involving physicians, such as the Patient Centered Medical Home.