Which Road?

Robert P. Roca, M.D.

President

Last month I wrote about the cost/quality problems highlighted by the most recent Commonwealth Fund report and about Atul Gawande’s optimism that solutions will emerge from a creative froth of small-scale local efforts stirred up and sustained by support from government.  Since then I have heard Richard “Chip” Davis, PhD address the BCMA about ways to reduce costs and improve the quality of care in our everyday practices, and I have read about some of the big ideas – such as accountable care organizations - that have been proposed to solve the problems on a grand scale.  To cap it off, I just read the Sunday New York Times (November 14, 2010) feature “O.K., You Fix the Budget”. 

I came away from the last of these reminded that the single largest component of the expected 1.34 trillion dollar deficit anticipated in 2030 - the last year for which projections exist – is Medicare and that the current level of spending is unsustainable.  “We’ve made promises we cannot keep,” observed Erskine B. Bowles, co-chair of the bipartisan panel appointed to make budget improvement recommendations. The current crop of baby boomers and their progeny are paying much less into the Medicare Trust fund than they will draw out when they become beneficiaries.  In an era when there is no political will for substantial tax increases, it is difficult to imagine a realistic solution to the long-term budget deficit problem that does not include significantly reining in Medicare spending, or at least capping its growth.  We know that this solution means paying health care providers less for doing more, an approach that may well reduce access to care and quality of care.  There was no mention of access or quality in the article, but perhaps you have no choice but to compromise quality and access when you’re going broke. 

But hopefully you do.   Speaking before a general meeting of the BCMA, Richard “Chip” Davis, PhD, co-director of the Center for Innovation in Quality Patient Care at Johns Hopkins, presented data illustrating the extent of waste in health care.  There is abundant evidence of waste on a grand scale (e.g., administrative costs that are out of control).  There is also lots of evidence of waste on a smaller scale (e.g., blood wastage due to insufficient labeling), and Chip gave examples in which waste was identified by alert clinicians and eliminated by systematic quality improvement efforts yielding often simple solutions (e.g., designing blood bag labels that are stickier and don’t fall off).  Clearly, some of the reasons that health care costs are so high and rising so quickly is that we’re wasting money, and we clinicians can do a lot to identify and eliminate waste if we are motivated and trained to do it.  

But it was not to eliminate waste and save money that Hopkins created the Center.  The creation of the Center was a direct consequence of the tragic death of Josie King, a two-year old PICU patient who died of dehydration, the victim of a cascade of communication failures among members of the clinical team caring for her.  The bereaved parents teamed up with Hopkins to launch an initiative that would strive to make Hopkins the safest hospital in the world.  The Center for Innovation in Quality Patient Care was created to serve as the vehicle for an initiative focused primarily on improving quality and safety. 

The central defect in the Josie King case, the failure to communicate adequately, is certainly not unique to Hopkins.  It is the single most common cause of sentinel events reported by hospitals to the Joint Commission.  Our system is weakest and most error-prone at points of hand-off, when care is transitioned from one clinician or team to another.  All of us who practice medicine know how difficult it is to coordinate care, particularly for patients who have many problems and many doctors.  And those of us who have served as advocates for a sick family member know that one of our major functions in that role is making sure that essential information is passed from one doctor to the next.   

So it’s not surprising that researchers and policymakers imagine that creating powerful incentives for coordination of care could improve the quality and efficiency of care, saving lives and dollars along the way.  The Patient Protection and Affordable Care Act and recent initiatives from the CMS and from state government contain provisions designed to incentivize providers, hospital, insurers and other participants to find ways of working together more effectively to improve patient care while reducing its cost.  Some of these are beginning to take shape in Maryland as I write this.     

The easiest to grasp conceptually – because they are organized around episodes of illness – are national pilot projects that involve bundling hospital and physician payments for the treatment of an episode of illness requiring hospitalization.  There are already five hospitals in the nation participating in a three-year experiment, one of which is the 691-bed Hillcrest Medical Center in Tulsa, Oklahoma.  Medicare pays Hillcrest a bundled dollar rate, out of which all parties are paid, for joint procedures and certain other conditions.  The hypothesis is that this arrangement will provide a new incentive for the hospital and physicians to work together to hold down costs and improve care.   

In Maryland, the Health Services Cost Review Commission is primed to begin piloting the bundling of all facility costs for a single episode of care sometime soon and is hoping to move toward a pilot including physician reimbursement within the next decade.  Again, a central tenet of this concept is that hospitals and physicians will find ways to work together more effectively if they are at risk together for waste (e.g., duplicated tests), avoidable readmissions, and other expensive treatment events for which there are few disincentives in the current system.  What bundling will mean for physicians will probably depend on where one works.  Physicians who are employed by hospitals to provide inpatient or outpatient care may not notice very much change.  On the other hand, physicians in independent practices will find themselves needing to consider new relationships with hospitals, particularly as the “treatment window” widens and physician reimbursement for post-hospital care becomes tied to certain developments (e.g., rehospitalization) that may occur weeks after hospital discharge.  Obviously there is lots of uncertainty here.  But at least it is organized around an episode of illness.   

The other models are not organized around illness as much as wellness, and the goal is to try to keep people healthy, prevent illness, and reduce the need for expensive diagnostic and therapeutic interventions.  One of these models is the “medical home.”  The American Academy of Family Physicians, the American Academy of Pediatrics, American College of Physicians, and the American Osteopathic Association have been strongly supportive of the medical home concept as a means of providing more coordinated, less fragmented care.  At the center of the medical home is the primary care physician, who provides longitudinal, comprehensive care and takes responsibility for ensuring that treatment is well coordinated and focused on the needs of the patient.   

The Maryland Health Care Commission already has in place a pilot medical home program utilizing large group practices.  CareFirst is in the process of initiating their Primary Care Medical Home program.  Groups consisting of at least five physicians may sign up to be part of the program through the middle of November.  Participating groups will enjoy an immediate 12 percent increase in reimbursement – in return for which physicians will have to submit care plans and other electronic information to CareFirst.  They will also have to sign up their patients for the program.  In conjunction with the program, CareFirst is going to market a new product called Healthy Blue.   

A related model for improving coordination is the “Accountable Care Organization” (ACO).  What is an ACO?  To quote the November issue of Health Leaders:   

“The Patient Protection and Affordable Care Act calls for the creation of an ACO program administered by CMS by January 1, 2012.  Qualifying providers, including hospitals, physician group practices, networks of individual practices, and partnerships between hospitals and other healthcare organizations, and other healthcare professionals will be eligible to form ACOs.  The ACO will ‘be willing to become accountable for the quality, cost, and overall care of the Medicare fee-for-service beneficiaries assigned to it’ and will also be expected to meet specific organization and quality performance standards in order to be eligible to receive payments for shared savings. 

“Importantly, performance standards have yet to be determined by CMS, and the legislation does not provide specifics on how ACOs will be held financially accountable, as they will not be subject to financial risks in the form of payment penalties if they do not achieve their savings targets. 

“Additional stipulations say that ACOs

· Must have a formal legal structure to receive and distribute shared savings to participating providers;

· Must employ enough primary care professionals to treat their beneficiary population (minimum of 5000 beneficiaries) as deemed sufficient by CMS;

· Must agree to at least 3 years of participation in the program;

· Will have to develop sufficient information about their participating healthcare professionals to support beneficiary assignment and for the determination of payments for shared savings;

· Will be expected to include a leadership and management structure that includes clinical and administrative systems;

· Will be expected to have defined processes to promote evidence-based medicine, report on quality and cost measures, and coordinate care;

· Will be required to produce reports demonstrating the adoption of patient-centered care.” 

This sounds complicated, and clearly many details are not specified.  That hasn’t stopped a number of organizations from starting down the road.  National examples include the Brookings/Dartmouth Accountable Care Cooperative, the Baylor Health System, the Robert Wood Johnson Foundation Medical School, and Premier ACO Collaboratives.  Locally, a number of institutions are moving forward.  For example, according to Chip Davis, Hopkins already has in place most, if not all, of the elements required to form an ACO.  And Dr. Neri Cohen, Treasurer of the BCMA, is playing a central role in pulling together a GBMC-based ACO.   

What does this mean for physicians?  Some view these developments as very disturbing; I recently spoke to an internist who is leaving the state to avoid being “swallowed up” by one of the ACOs.  Other physicians are more optimistic about our prospects in this new world and feel that physicians are in a position to be leaders in ACOs.  One of the reasons for this optimism is the story of the physician-led Rocky Mountain Health Plans and the Mesa County Physicians Independent Practice Association of Grand Junction, Colorado (see N Engl J Med 363;15).  To make a long story short, physicians came together decades ago to form a system that was led by the primary care community and characterized by the following features: “a payment system involving risk sharing by physicians; equalization of physician payment for the care of Medicare, Medicaid, and privately insured patients; regionalization of services into an orderly system of primary, secondary and tertiary care; limits on the supply of expensive resources, including specialists, beds, and equipment; payment of primary care physicians for hospital visits; and robust end-of-life care.”  The results have included per capita Medicare spending that is 24% lower than the national average and quality metrics that are above the national average in preventive care, diabetes, asthma, and other areas.  Examples such as this have fueled optimism that the premises of ACOs are sound, that quality and cost objectives might both simultaneously achievable, and that physicians can lead the way.  But even the optimists recognize that it took decades for this arrangement to mature and that there are many political obstacles to the evolution of Grand Junction-type models in most markets. 

There are certainly less ambitious models that physicians might lead.  But even these require that physicians feel comfortable working in a paradigm that rewards vigorous efforts at prevention and disease management; seeks, where possible, to standardize processes; calls for physicians to practice according to the evidence; puts a premium on coordination of care and outcomes measurement; and shares financial risk with other providers, including hospitals.  Even optimists recognize that this is a tall order and that many physicians, especially those working independently and in small groups, have difficulty seeing how they will fit into such structures.   

Adding complexity to the issue are questions about whether current anti-trust laws permit independent physicians to collaborate with one another in ways that would be required for them even to consider forming an ACO.  The AMA is actively investigating this.    

The bottom line is that there is much uncertainty and that this has created anxiety in some, a sense of urgency to act in others, and both of these emotions in many of us.  The uncertainty became even greater – if that is possible – when the midterm election shifted the balance of power in Washington and around the country.  Will some provisions of the Patient Protection and Affordable Care Act be repealed or go unfunded?  No one can say.  The AMA is seeking to help members stay abreast of new developments; visit the website to keep current on their efforts to inform the membership.   

But a few things are certain.  The current cost curve is not sustainable, and our fragmented system will continue to put patients like Josie King at risk.  We don’t now know whether bundled payments, medical homes, or ACOs will help, but we know we have to do better.