Experts discuss whether shift in Medicare will reduce costs, improve quality of care

In response to concerns over Medicare’s current fee-for-service payment system, the Obama administration announced in January that by 2018 Medicare instead will aim to associate half of all payments to the quality and value of health care provided.

Some of the changes that private insurers and the government are hoping to advance are the use of bundle payments, population-based payments and Accountable Care Organizations.

Speaking during a Health Matters webinar, Arnold Milstein, MD, director of the Clinical Excellence Research Center at Stanford University’s School of Medicine, and Austin Frakt, PhD, of the Department of Veterans Affairs, presented real-world scenarios backed by research that may help to transform the way health care is paid for and delivered in the United States.

Quality care models

“If incentives — [bundle payments, population-based payments and Accountable Care Organizations] —begin to kick in, could health care systems begin to improve their value at a rate sufficient to neutralize the gap between rate of growth in health care spending and rate of growth in GDP? The latter of which is an index of our society’s ability to afford anything,” Milstein said.

In speaking about an effort that he chaired for 10 years, Milstein described how he and colleagues aimed for all health maintenance organizations in California to be in sync with how they went about measuring and paying for quality health care.

“We were able to analyze across a number of different medical specialties and also across community hospitals what was actually going on differently with positive value outliers,” he said. “Practices tended to have deeper, more personal relationships with their patients. Their patients trusted that if they called their doctor on nights and weekends that someone would be rapidly responsive and would know their specific situation. The doctors’ vision of their width of responsibility to their patients extended far beyond producing a perfect office visit — it really meant being a steward of their patients’ best interests.”

Milstein said their next step in this research is to verify that their findings are accurate.

In looking ahead 10 years as newer information technology platforms are better understood and utilized by physicians and hospitals, Milstein offered a glimpse into what high-valued health care may look like.

In a 2014 study published in Chest, researchers at the University of Massachusetts Medical School sought to assess the use of an ICU telemedicine intervention in 50 ICUs nationwide. The facilities supplemented their front-line ICU team with a remote-control tower, much like what is seen with air traffic control at an airport, according to Milstein.

“In the ‘control tower’ were eight ICU nurses and an ICU doctor,” he said. “The idea essentially was to look at the same electronic feed that the front-line team is seeing, but with a little distance from the front line, the telemedicine intervention may allow staff to see things that may be missed when at the ‘front line of combat’.”

According to study results, the intervention improved adherence to ICU best practices, reduced response times to alarms and led to lower mortality and hospital length-of-stay.

“There was some interesting social science at work here in the use of heightened individuation, which in my view had a major impact on the improved performance we see here,” Milstein said. “This is a glimpse of what high-valued health care may look like 10 years from now.”

Possibility of ‘backfire’

Frakt said that under the Affordable Care Act, Medicare will be cut significantly.

“Relative to the rates that private insurers pay, the rates for Medicare and Medicaid are going to trend down over time. In fact, by the middle of the century, they are going to be about half of what private insurance pays hospitals,” he said. “We should be concerned that quality may suffer unless we do something about this.”

Research has shown that when Medicare payments to hospitals are cut, it leads to higher patient mortality and other negative outcomes, according to Frakt.

He discussed a recent study published in Health Affairs that measured 30-day survival rates among Medicare patients after hospital discharge for myocardial infarction, heart failure or pneumonia between 2002 and 2011.

“Results showed that productivity was bad for a while, but then increased and has been accelerating,” he said. “Now the productivity gains are quite a bit faster than overall economic productivity gains, which is exactly what we needed and what the designers of the Affordable Care Act expected that hospitals would be able to do. This study is very encouraging and worth looking into.”

However, Frakt noted that this is only one study, and there are many other ways to measure productivity.

“I am both a skeptic and an optimist,” he said. “All of this research is troubling, and I worry about the effect of consolidation, which is ongoing. Yet, I am still cautiously optimistic, because maybe this time will be different — we really are trying some new policies, and we do have better IT systems, so it’s not completely unreasonable to expect different results. These are all the things that health policy minds thought we should try, and we are trying them, but we cannot expect change overnight. We really are not being realistic to think within 5 years that everything should be great, it’s too soon. We need more time.” – by Jennifer Southall

Reference:
Lilly CM, et al. Chest. 2014;doi:10.1378/chest.13-1973.
Romley JA, et al. Health Aff. 2015; doi:10.1377/hlthaff.2014.0587.