Transcript The Uninsured Many Specialists Won’t See Kids With Medicaid Bisgaier J, Rhodes KV.

The Uninsured
Many Specialists Won’t See Kids
With Medicaid
Bisgaier J, Rhodes KV. N Engl J Med 2011;364:2324-2333
Financial Suffering
Among the
INSURED
High Deductible Insurance:
Except for the Healthy and
Wealthy, It’s Unwise
Rising Economic
Inequality
Persistent Racial
Inequalities
Racial Disparity in Access to
Kidney Transplants
Rationing Amidst
a Surplus of Care
Unnecessary Procedures
Fewer CABGs, But More Hospitals are
Competing to Perform this Lucrative Surgery
Lucas F L et al. Health Aff 2011;30:1569-1574
Variation in Medicare Spending:
Some Regions Already Spend at Canadian Level
Half of Americans Live Where
Population Is Too Low for Competition
A town’s only hospital will not compete with itself
Source: NEJM 1993;328:148
ACOs:
A Rerun of the HMO Experience?
Why the ACO/HMO Concept
Resonates
• Lots of redundant high tech facilities and
useless, even harmful interventions
• Neglect of primary care, public health,
prevention, mental health
• Lack of teamwork
• Quality problems that need system solutions
• Inadequate public accountability
HMO-ACO Logic
• FFS is the problem; capitation (shifting
insurance risk) the solution.
• But . . . small clinics and hospitals can’t
bear risk, so consolidation is necessary.
• Shifting risk creates incentive to deny care,
so report cards and risk adjustment are
necessary.
Profit-Driven ACO’s:
Medicare HMOs Provide a
Cautionary Tale
Despite Medicare’s Lower
Overhead, Enrollment of Medicare
Patients in Private Plans Has Grown
Private Medicare Plans Have
Prospered by Cherry Picking
Up-coding: the Achilles Heel of
Risk Adjustment, and hence
ACO’s (and P4P)
• By maximizing the number of coded
diagnoses and comorbidities,
hospitals, doctors and HMOs/ACOs
can make their outcomes look better,
and (when payment is risk adjusted)
make more $$
Upcoding: The Science of Making
Patients Look Sicker on Paper
No Extra Severity/Payment
• Acute kidney insufficiency
• Mg. = 1.6
• Delirium
• Anemia 20 GI bleed
• Malnourished
• COPD exacerbation
• Polysubstance abuse
Equivalent but Extra Credit
• Acute renal failure
• Hypo-magnesemia
• Encephalopathy
• Anemia 20 acute blood loss
• Moderately malnourished
• Acute respiratory
decompensation
• Continuing polysubstance
abuse
Medicare’s Attempt to Improve RiskAdjustment of HMO Payment
• Pre-2004 - HMOs were “cherrypicking” when payment adjusted only
for age, sex, location, employment
status, disability, institutionalization,
Medicaid eligibility
• 2004 – Risk adjustment formula added
70 diagnoses
Risk Adjustment Increased Medicare
HMO Over-Payments
$30 billion Wasted Annually
“We show that . . . risk-adjustment . . . . can actually
increase differential payments relative to pre-riskadjustment levels and thus . . . raise the total cost to
the government. . . . The differential payments . . .
totaled $30 billion in 2006, or nearly 8 percent of
total Medicare spending. . . . recalibration [of the risk
adjustment formula] will likely exacerbate
mispricing.”
Source: NBER #16977
Failure of Medicare HMO Risk
Adjustment: Implications for ACOs
• More risk adjustment leads to MORE, not less cherry picking – ie.
Selecting healthier patients within each risk stratum
• Intensive coding makes patients appear sicker on paper, ups risk-adjusted
capitation fee and factitiously raises quality scores
• ACOs that fail to cherry pick or intensify coding will get low payments,
and factitiously poor quality scores
• Implications:
No net savings, probable increased costs
Resources transferred from sick to healthy
Biggest cheaters are biggest winners, undermines ethical behavior
ACOs that embrace problem patients driven from the market
High Cost Providers Inflate Both
Reimbursement and Quality Scores by
Making Patients Look Sicker on Paper
Predicting the Impact of ACOs
• Track record of HMOs
• Results of Medicare’s Physician Group
Practice Demonstration, 2005-2010
• Evidence on tools ACOs likely to use:




prevention and disease management
“care coordination”
report cards and P4P schemes
electronic medical records
Prospect of ACOs is Already
Causing Consolidation
“When Congress passed the health care law, it
envisioned doctors and hospitals joining forces,
coordinating care and holding down costs….
Now, eight months into the new law there is a
growing frenzy of mergers involving hospitals,
clinics and doctor groups....If ACOs end up
stifling rather than unleashing competition,’ said
Jon Leibowitz, the chairman of the [FTC], ‘we
will have let one of the great opportunities for
health care reform slip away.’”
New York Times, November 21, 2010, A1.
Medicare’s PGP/ACO Demo. Project :
Gaming, But No Savings
“The model for the ACO program . . . has
been tested in the PGP Demonstration
Project . . . diagnosis coding changes the
PGP sites initiated . . . produced apparent
savings that resulted in shared savings
payments to some of the demonstration
sites, but not actually fewer dollars
spent”
Berenson RA. Am J. Managed Care, 2010; 16:721-726.
ACO Cost Cutting Armamentarium
• Prevention
• Disease management
• “Care Coordination” (consolidation, gatekeeping, utilization review)
• Electronic medical records
• Report cards and P-4-P
Prevention Saves Lives,
But Not Money
“Although some preventive services do save
money, the vast majority reviewed in the
health economics literature do not.”
Cohen JT et al., New England Journal of Medicine 2008;358:661-663.
“It’s a nice thing to think, and it seems like it
should be true, but I don’t know of any
evidence that preventive care actually saves
money.”
Gruber J,quoted in “Free lunch on health? Think again,” NY Times, August 8, 2007: C 2.
Medical Homes and Enhanced Primary
Care Don’t Require ACOs
• “Medical Homes” that integrate more nurses,
social workers etc. into primary care and cut
physicians’ panel size may improve care and
reduce ED and inpatient utilization, possibly
enough to offset the additional personnel costs
• But this intervention does not require recycling
the HMO experiment.
Assumptions Implicit in P-4-P
1. Performance can be accurately ascertained
2. Individual variation is caused by variation in
motivation
3. Financial incentives will add to intrinsic
motivation
4. Current payment system is too simple
5. Hospitals/MDs delivering poor quality care
should get fewer resources
Assumptions Implicit in P-4-P
1. Performance can be accurately ascertained
- i.e. that the variance attributable to an
individual doctor can be clearly identified
(as opposed to her patients and the
circumstances surrounding the work), and
will cannot be gamed.
Assumptions Implicit in P-4-P
2. Individual variation is caused by variation
in motivation - i.e. that poor performance
is a matter of intention, and that change in
motivation is therefore likely to improve
performance. If poor performance is not
“willed” then incentives can’t change it.
Assumptions Implicit in P-4-P
3. Financial incentives will add to intrinsic
motivation. If financial incentives
undermine intrinsic motivation they may
actually worsen performance.
Pay for Performance
“I do not think its true that the way to get
better doctoring and better nursing is to put
money on the table in front of doctors and nurses.
I think that's a fundamental misunderstanding of
human motivation. I think people respond to joy
and work and love and achievement and learning and
appreciation and gratitude - and a sense of a job
well done. I think that it feels good to be a
doctor and better to be a better doctor. When we
begin to attach dollar amounts to throughputs and
to individual pay we are playing with fire. The
first and most important effect of that may be to
begin to dissociate people from their work.”
Don Berwick, M.D,
Source: Health Affairs 1/12/2005
P-4-P Didn’t Improve Quality Scores
5 Year Results of the CMS/Premier Hospitals Project
Baseline
Source: Werner R M et al. Health Aff 2011;30:690-698
P4P Among UK Primary Care
Doctors
• Multiple quality parameters were documented
using a computerized medical record and summed
in a point system
• Virtually all practices achieved most of the quality
points within a year of implementation
• Generated a much welcomed 25% increase in GP
incomes
P4P – Scores on Whatever You
Pay for Improves, But . . .
“The [British P4P] scheme accelerated
improvements in quality for 2 of 3 chronic
conditions in the short term. However, once
targets were reached, the improvement . . .
slowed, and the quality of care declined for 2
conditions that had not been linked to
incentives.”
Source: NEJM 7/23/2009:368
High P-4-P Scores, But No Improvement
in Hypertension Outcomes in UK
Source: Serumaga. BMJ 2011;342:d108
“We found no evidence that
financial incentives can
improve patient outcomes.”
Flodgren et al. “An overview of reviews evaluating the effectiveness of financial
incentives in changing healthcare professional behaviors and patient outcomes.
Cochrane Collaboration, July 6, 2011
A $75 Million RCT of P-4-P in
New York City Schools
• 200 high-needs New York City schools employing
more than 20,000 teachers.
• Incentives of up to $3,000 per teacher
• Based on students’ test scores, graduation and
attendance rates, and learning environment surveys.
Source: Fryer RG. Teacher incentives and student achievement: evidence from New York City public schools. NBER
Working Paper No 16850. Cambridge, MA: National Bureau of Economic Research, March, 2011.
An RCT of P-4-P for Math Teachers
in Nashville Schools
• 296 middle school math teachers randomized to
bonuses/no bonuses. Study ran for 3 years.
• Incentives of up to $15,000 per teacher per year
• Based on students’ test scores
• “Overall we find no effect of teacher
incentives on student achievement.”
Source: Springer et al. Teacher Pay for Performance: Experimental Evidence from the
Project on Incentives in Teaching. Rand Corp. 9/21/2010
ACOs and HMOs:
Faith-Based Solutions
• Capitation as magic bullet
• Consolidation among providers cuts costs
• Prevention, care management & EMR/
computers save money
• P-4-P encourages global quality
• Risk adjustment can overcome gaming
(upcoding of diagnoses)
Investor-Owned Care:
Inflated Costs, Inferior Quality
For-Profit Hospitals’ Death Rates are 2% Higher
Source: CMAJ 2002;166:1399
For-Profit Hospitals Cost 19% More
Source: CMAJ 2004;170:1817
For-Profit Dialysis Clinics’ Death Rates are 9% Higher
Source: JAMA 2002;288:2449
Profit Undermines Science:
The Case of Myriad Genetics and BRCA
• Myriad’s patents on BRCA genes (and
original test) expire in 2018
• Myriad BRCA test = $3,340
• Other, cheaper testing methods now
possible – could undercut Myriad in 2018
• In response, Myriad stopped sharing data on
cancer risk of specific mutations
Source: New York Times 8/25/11:B1
Drug Companies’ Cost Structure
Drug Firms’ Fraud:
Pay the Ticket and Keep on Speeding
“In April [2010], AstraZeneca became the fourth major
drug company in three years to settle a government
investigation with a hefty payment -- in its case, $520
million for what federal officials described as an array
of illegal promotions of antipsychotics for children, the
elderly, veterans and prisoners. Still, the payment
amounted to just 2.4 percent of the $21.6 billion
AstraZeneca made on Seroquel sales from 1997 to
2009.”
New York Times – 10/3/10
Mandate Model Reform:
Keeping Private Insurers
In Charge
“Mandate” Model for Reform
• Proposed by Richard Nixon in
1971 to block Edward
Kennedy’s NHI proposal
“Mandate” Model for Reform
• Government uses its coercive
power to make people buy
private insurance.
“Mandate” Model for Reform
1. Expanded Medicaid-like program
 Free for poor
 Subsidies for low income
 Buy-in without subsidy for others
2. Individual and Employer Mandates
3. Managed Care / Care Management
“Mandate” Model - Problems
•
•
•
•
Absent cost controls, expanded coverage
unaffordable
ACOs/care management, computers, prevention
not shown to cut costs
Adds administrative complexity and cost;
retains, even strengthens private insurers
Impeccable political logic, economic nonsense
Massachusetts’ Model Reform:
Massive Federal Subsidies,
Skimpy Coverage, Persistent
Access Problems
Massachusetts Health Reform
New Coverage
<
150% Poverty - Medicaid HMO
 150% - 300% poverty - Partial subsidy
 > 300% poverty – Buy Your Own
Massachusetts: Required Coverage
(Income > 300% of Poverty)



Premium: $5,600 Annually (56 year
old, individual coverage)
$2000 deductible
20% co-insurance AFTER deductible is
reached
Crimes and Punishments in
Massachusetts
The Crime
The Fine
Violation of Child Labor Laws
$50
Employers Failing to Partially Subsidize a
Poor Health Plan for Workers
Illegal Sale of Firearms, First Offense
$295
Driving Under the Influence, First Offense
$500 min.
Domestic Assault
$1000 max.
Cruelty to or Malicious Killing of Animals
$1000 max.
Communication of a Terrorist Threat
$1000 min.
Being Uninsured In Massachusetts
$500 max.
$1212
Public Money, Private Control
U.S. Health Costs Rising More Steeply, 1970-2008
The U.S. Trails Other Nations
Canada’s National Health
Insurance Program
Quality of Care Slightly Better in Canada Than U.S.
A Meta-Analysis of Patients Treated for Same Illnesses
(U.S. Studies Included Mostly Insured Patients)
Source: Guyatt et al, Open Medicine, April 19, 2007
A National Health
Program for the U.S.
Phony vs. Real Reform
Phony
• Choice of HMO/insurer
• Coverage = Copays,
exclusions etc.
• Security = Lose it if you
can’t work or can’t pay
• Savings = Less care
Real
• Choice of doctor and
hospital
• Coverage = First $,
Comprehensive
• Security = For everyone,
forever
• Savings >$400 bil on
bureaucracy
Public Opinion Favors Single
Payer National Health Insurance