It’s the middle of winter. Feeling blah? Need some stimulation? You’ve come to the right place!
Welcome to The “Shake the Winter Blahs” Edition of the Health Wonk review. For the second time, it’s my honor to host HWR — providing you summaries and links to the best recent writing in the health blogosphere. Let’s go!
Federal Health Policy
At the Health Affairs Blog, Princeton professor Uwe Reinhardt jumps off from the recent controversy about Jonathan Gruber’s remarks describing the American public as “stupid”. He writes that Gruber’s apologies were appropriate. The post is descriptively titled Rethinking The Gruber Controversy: Americans Aren’t Stupid, But They’re Often Ignorant — And Why.
As an American, (I think) I’m relieved to know that I’m not stupid, just ignorant.
The editor and publisher of Accountable Care News have been generous in allowing me to republish my article from the November 2014 issue.
Click here to download a .pdf copy of the article. It’s in-depth — about 2,000 words.
Here’s the article in a nutshell:
One of the most critical aspects of the Medicare Shared Savings Program (MSSP) ACO has been around the timing and certainty of requiring mandatory downside financial risk for physician and hospital participants. Provider protests cajoled CMS to backing off an initial stance of “firm and unwavering” for ACO mandatory risk requirements in 2011.
The issue is being revisited in major 2014 MSSP reg revisions which are in process. A central lesson we are learning about ACOs is that clinical transformation is a long and difficult process, and thus CMS (and all payers) should continue to be “firm but flexible” in the timing of requiring downside risk. There are many advantages of a stance of “firm but flexible”, and while the shift in wording might seem subtle, the implications are profound.
A number of pundits are citing the systemic failure of ACOs, after additional Pioneer ACOs announced withdrawal from the program – Where do you weigh in on the prognosis for Medicare and Commercial ACOs over the next several years?”
Republished courtesy of MCOL
| Mark Lutes Chair, Board of Directors, Epstein Becker & Green, P.C.
Certainly, if we dial back the rhetoric and the expectations for immediate system -wide transformation, we can expect accountable care organizations to make a contribution to incentivizing more efficient care. Shared savings methodologies are a significant contribution to the arsenal of provider incentive systems. However, they are not magical. Like other incentive systems that have been implemented over the decades since the federal HMO Act was passed, shared savings methodologies are going to enjoy their greatest success where the participating providers have a large percentage of their professional income subject to (hopefully coordinated) value based incentives.
There is also no magic to calling a network an ACO as compared to the nomenclature of IPA, PHO, or PPO. The alchemy governmental and commercial payors seek, in contracting with any such network, is alignment around efficient quality care. The likelihood of the alignment succeeding flows in part from the adequacy and timeliness of the data available as well as from the ability to lock in and incent enrollees — each deficiencies in the current MSSP design. Also, as in any provider or other personnel incentive system, the carrot must be attainable and the “juice must be worth the squeeze.”
Therefore, as we prepare to comment on the next round of CMS’ MSSP and as we negotiate commercial shared savings arrangements, we will be well served to always move the programs in a direction in which they give participating providers the tools for success and in which they will be credible motivators. Most importantly, policy makers, carriers and self-funded employers will be most pleased with the efficacy of shared savings if they work together to align large percentages of payment streams in support of shared savings. If the shared savings tool is not applied in a context where it is worth the effort for providers to vary from the volume based mind-set, we will be asking and expecting too much of and from it.
| Henry LoubetChief Strategy Officer Keenan
The recent withdrawal of nearly 40% of the Pioneer ACO participants is indicative of significant concern but does not represent the systemic failure of the model. While these Medicare ACO programs did not perform as well as hoped, there were many factors affecting savings and quality improvements including geography and diversity of the populations served. A recent article published by the Brookings Institute analyzes the two-year results in some depth and that many of the ACOs continuing to participate in the Pioneer ACO program are achieving notable success. In the California marketplace, Brown & Toland Physicians and Monarch HealthCare were among the better performing ACOs in the study.
ACOs continue to demonstrate great promise on the commercial side. Anthem Blue Cross and Blue Shield of California have been leading the way in California in taking the ACO model to the next level. For more than 20 years, the delegated/capitated model of health care delivery has been in existence in California, and it is not surprising that two of the largest health plans have been behind the development of successful ACO structures. Anthem’s ACO has seen increases in HEDIS quality metrics and patient engagement. Blue Shield continues to expand the geographic reach of its ACOs, adding a number of new medical groups to the program. ACO efforts between CalPERS/Dignity, Hill Physicians and Blue Shield can also be classified as successful ACOs. In addition, the Kaiser Permanente integrated care model that ACOs emulate has been in existence here since the 1940s.
Certainly adjustments to procedures, the structure of incentives and improved alignment between the cost and quality of health care are needed to achieve the highest objectives of the Accountable Care model. These changes take time and some organizations will be able to improve their performance better than others. Far from being a systemic failure, the ACOs that have shown dedication to the model are showing that the program is having some successes and have demonstrated that improvement in financial and quality outcomes are possible within a reasonable time horizon.
…(The) 2014 National Scorecard on Payment Reform tells us 40 percent of commercial sector payments to doctors and hospitals now flow through value-oriented payment methods, defined as payment methods designed to improve quality and reduce waste. This is a dramatic increase since 2013 when the figure was just 11 percent.
Suzanne Delbanco, Executive Director of CPR, in the Health Affairs blog
I’ve written before about what economists call “The Penguin Problem” — No one moves unless everyone moves, so no one moves.
The healthcare Payment Penguin Problem goes something like this:
Care Providers: “We’re hesitant to jump into the water. While we understand that fee-for-service payments are perverse, they ARE in our best economic interests. We won’t invest in infrastructure and processes toward value-based care until we believe payers are serious in making the transition.”
Payers: “We’re hesitant to jump into the water. While we understand that value-based payments could improve quality and reduce costs, we don’t know whether care providers are serious in making necessary investments and changes. We also question whether they can pull it off. We’d like to see that providers are serious in making the transition.”
- The 2014 CPR National Scorecard for Payment reform documents that the Payment Penguin Problem has been solved!
- The implications are huge!
Swiss cheese health insurance?
So, so many holes.
Ending insurance discrimination against the sick was a central goal of the nation’s health care overhaul, but leading patient groups say that promise is being undermined by new barriers from insurers. The Washington Post
In the past year, network adequacy has been one of the hot button issues for Qualified Health Plans (QHPs) in the Federal health insurance exchange. Network adequacy has focused on access to care providers and the narrow networks used by many health plans.
In the next year, the big issue will be around benefits adequacy, i.e., lack of coverage and high out-of-pocket expenses incurred due to high deductibles, co-pays, exclusions, etc. My shorthand for this is “Swiss cheese health insurance—so, so many holes.”
The Canary in the Coal Mine Letter
The canary in the coal mine is a recent letter signed by 333 patient advocacy groups (“the Letter”) to HHS Secretary Sylvia Burwell. (When’s the last time you saw a letter endorsed by 333 organizations!)
I’m being asked the same series of questions a lot lately:
Do you think the changes occurring in US healthcare are real? Are we truly moving away from rewarding volume of care under fee-for-service (FFS) and toward value-based payment and delivery? Are the changes past the point of no return? Will the economic interests of the powers-that-be prevent real change from happening, just as they have done in the past?
The phrasing of these questions assumes a split, dichotomous view of the world — that change has/hasn’t yet happened. The questions also mask the underlying and difficult process of transition that people and organizations are going through.
There’s a different way to think about the transformation of U.S. healthcare — transition as a 3-stage process:
William Bridges 3 Stage Transition Model
Here’s a summary of where I’m going with today’s essay:
- Think of Transition as a 3 Stage Process
- U.S. Healthcare—Entering the Neutral Zone
- How Long Will the Neutral Zone Last? Quite a While.
- So What? What are Implications and Actions?
by Brian Klepper
On The Health Care Blog, veteran analyst Vince Kuraitis reviews a report from the consulting firm Oliver Wyman (OW), arguing that the trend toward reconfiguring health systems to deliver more accountable care is more widespread than any of us suspect.
“The healthcare world has only gotten serious about accountable care organizations in the past two years, but it is already clear that they are well positioned to provide a serious competitive threat to traditional fee-for-service medicine. In “The ACO Surprise,” our analysis finds that 25 to 31 million Americans already receive their care through ACOs-and roughly 45 percent of the population live in regions served by at least one ACO.”
OW provides a well-reasoned analysis and conclusions, but I’m skeptical. In discussions with health system executives around the country, I hear some movement toward change, but relatively few organizations are materially turning their operations in a different direction. The specter of policy change is looming, but it is still abstract. As I’ve described before, market forces are intensifying, but they’re mostly still scattered and immature.
A recent analysis of the ACO market by Oliver Wyman market suggests we’re well on our way toward being “there”.
My personal take on this report:
Provocative, fresh, thoughtful, well reasoned, expansive — albeit a bit of a stretch
However, I suspect many others will describe it as:
Speculative, harebrained, unsupported, overly extrapolative, out-to-lunch, wishful to the point of being woo woo
So now that I hopefully have your attention, what’s this report all about? In a nutshell:
The healthcare world has only gotten serious about accountable care organizations in the past two years, but it is already clear that they are well positioned to provide a serious competitive threat to traditional fee-for-service medicine. In “The ACO Surprise”, our analysis finds that 25 to 31 million Americans already receive their care through ACOs—and roughly 45 percent of the population live in regions served by at least one ACO.
Let’s dig in to the report. In this blog post, I’ll summarize their math, surface their critical assumptions and observations, and comment on their reasoning. I’ve indented direct quotations from the report and have italicized wording that spells out the major assumptions.
While I don’t agree with all of Oliver Wyman’s math and assumptions, I applaud them for the process they have gone through. Please take my commentary as “quibbling at the edges” and that overall I’m on board with their methodology and conclusions.
From reading recent headlines, one might easily get the impression that hospitals are resistant — or at least ambivalent — in their pursuit and adoption of accountable care initiatives.
Are Hospitals Dragging their Feet on Accountable Care?
Commonwealth Fund: “only 13 percent of hospital respondents reported participating in an ACO or planning to participate within a year”
KPMG Survey: “(only) 27 percent of [health system] respondents said current business models were either not very or not at all sustainable over the next five years”
Health Affairs: “Medicare’s New Hospital Value-Based Purchasing Program Is Likely To Have Only A Small Impact On Hospital Payments”
The Bigger Picture
Do hospitals today perceive their current business model on the metaphorical “burning platform” — when the status quo is no longer an alternative?
Over the past decade, I’ve seen a number of studies asking people whom they trust among various health care stakeholders. Nurses, pharmacists, and doctors always come out at the top. Beyond that:
- Trust of hospitals tends to be high (60–80%)
- Trust of health plans is at the bottom of the heap (10–20%)
Is this written in stone for the future? I don’t think so…and the dynamics for change are in motion. Please read on.
Here’s the emerging picture I’m seeing:
- Hospitals are dragging their feet in connecting you with your electronic health information.
- Health plans are highly motivated to connect you with your health information.