Health for life

In yesterday’s posting on care management nurse-staffing ratios and their associated costs, Peter McMenamin pointed out that a per member per month cost (PMPM) that ranged from $8 to $17 was a reasonable estimation.  Whats more, it compared favorably to the monthly management fee in the Comprehensive Primary Care Initiative. 

This is also important for Accountable Care Organizations that are grappling with the amounts that they’ll need to invest in care coordination to achieve the shared savings.  Assuming an ACO becomes accountable for 5,000 beneficiaries, that calculates out to between $480,000 and $1,020,000 per year.

But, asked the Disease Management Care Blog, should there be any differences in care management ratios and costs for Medicare, Medicaid and commercial insurance?  If it’s a commercial ACO, should it estimate $500K, while a Medicare ACO should plan lower ratios and invest $1M?

Peter McMenamin’s thoughts:

A parity between Medicare, commercial, and Medicaid is possible but not exactly plausible.  Thanks to many co-morbidities, Medicare patients have more different docs, more visits, and more drugs.  Unless they are particularly compliant with respect to medications, you’d expect Medicare patients to be more demanding.  Unless they return to a physician so frequently that care coordination is incidental or are hospitalized so much that their care is taken care of, they need considerable care management. If Medicare patients take more time for follow-up, etc. that might explain the difference between $20 PMPM and the somewhat lower PMPM estimates from my calculations.

Good point, of course.  Yet the DMCB is not so sure that there is a correlation between savings and the intensity of care management beyond a certain threshold for any patient of any age.  In addition, while persons with Medicare have greater illness burden, that doesn’t mean the day-to-day management, care plans and shared decision making for conditions like diabetes or heart failure making varies depending on a patient’s age.

Dr. McMenamin and the DMCB will keep their eye out for answers.  More to follow.

Dont underestimate the physician dismay over the looming "Doc Fix" debacle. Unless some budget compromise gets hammered out, Medicare is about to stick it to a lot of docs.

Ever since the passage of the Balanced Budget Act of 1997, Congress has been repeatedly delaying a yearly mandated cut in Medicares physician fees. That statutory reduction has been slowly accumulating through no fault of the physician community and is now estimated to be more than 27%.  Assuming most physicians practices are made up by a majority of Medicare beneficiaries, that represents a huge hit to their cash flow. KHN has a good summary of the partisan mutual assured destruction that has led us to this crisis here.

The docs are not happy:

From the AMA ("shameful"):

"Congress has again failed to fulfill its responsibilities. It is shameful that patients and physicians are the collateral damage; the citizens of this country deserve better. Congress had the entire year to repeal the broken physician payment formula and provide stability for the millions of seniors...who rely on Medicare... but has failed to act. It is long past time for members of Congress to act decisively and protect access to care for seniors..."

From the American Academy of Family Physicians ("outraged"):

“The American Academy of Family Physicians is outraged that Congress failed to prevent the 27.4 percent Medicare physician pay cut mandated by current law. That failure has presented their elderly and disabled constituents a bitter holiday gift — uncertainty whether their physicians will be able to provide the services they need."

A family physician blogger ("very upset"):

"I have talked some of my colleagues and some of my patients, and all of us are very upset about this. Some of my physician friends are really thinking this time about completing the necessary paperwork to stop accepting Medicare patients. How can any business (except government) run with such uncertainty as not finding a permanent fix to the broken current Medicare system. Patients will be unable to see their physicians, resulting in delayed care, increased hospitalization, and illness."

 From an email that was forwarded to the Disease Management Care Blog:

"Who can help us? 28% cut are you kidding me, some of us cannot sustain the disruption of cash flow.
I had a great home equity line on my house, but it was closed (not just frozen) because my bank just got taken over by the feds."

Observers may believe that the fallout will be limited to the small-business physician-owned practices and that the larger systems with salaried physicians will be able to carry on.  That would be a mistake.

Within each large provider systems, clinical "work units" are still responsible for meeting revenue expectations which, in turn, are tied to physician salaries and non-physician support staff.  A fee schedule cut courtesy of Medicare will be just as much of a problem for them too.

How will both the physician-owned and salaried practices respond?  The DMCB predicts that most will conclude that seeing more Medicare patients (volume) will not make up for the reduction in fees.  As has been noted by persons far wiser than the DMCB, "if youre losing 25 cents on every watermelon you sell, you cant make up for it by selling more watermelons."

As a result, both physician-owned and salaried practices will limit access by Medicare patients. Most will probably continue to see their active and established Medicare patients, but they will functionally "deactivate" their other Medicare patients and decline to take on new ones.  Theyll then "backfill" those open appointment slots with patients who have better insurance.  Heres how its done.

The DMCB will close with three additional thoughts:

1. If rates go down by 27%, there may be increased merit to the notion of "balance billing."

2. "Concierge practices," thanks to this stand-off, just got a lot more attractive to thousands of physicians.

3. Now would be an opportune time for the population health management community to close ranks and communicate with their legislators on behalf of their physician partners.

This way to consolidation....

Disease Management Care Blog readers may recall that Medicares Hospital Readmissions Reduction Program was among the many provisions of the Affordable Care Act. 

According to the finalized regulations, if a hospitals readmission rate within 30 days for heart attack, heart failure or pneumonia exceeds an established norm (using three years of data based on a minimum of 25 patients with a statistical risk adjustment to account for co-morbid conditions), that hospitals Medicare payment rates will be reduced for all discharges in the following year. The reduction, depending on the excess rate, can go from zero (readmissions meet the norm) to a maximum of 1% (the hospital penalty results in payment of only 99% of the applicable fee schedule).

Now, Kaiser Health News has just looked at the numbers and calculates that, thanks to the HRRP,over 2000 hospitals will forgo close to $300 million. According to KHN, 278 hospitals - including some household names - will achieve the dubious distinction of a full 1% reduction.  You can check out how your local hospital will likely fare here.

While readmissions themselves are a significant problem, the approach used by the HRRP has its own set of under-appreciated methodologic challenges (as noted here and here). Now that hospitals are about to get battered by a well-meaning if flawed payment system, your DMCB raises one more red flag:

This will drive hospital consolidation.

That may well be one intent of the law. Cheesecake Factory logic tells us that large hospital systems have the intellectual and capital resources to systematize care, apply best practices, reduce variation and maximize outcomes.  Rather than weep for those hospitals that are losing income, Washingtons policymakers are probably hoping that the losers have one more reason to join forces with the bigger, smarter and more efficient hospitals or systems nearby or in the next state (especially the ones with a smartly run disease management program).

Yet, whether or not hospital consolidation alone would make a palpable difference in cost or quality remains to be seen (as indicated here and here). What could happen instead is the rise of too-big-to-fail, politically connected and market-dominant health care systems.

Well see.

Image from NIHSeniorHealth

"I  think I need to go back to the hospital....."

The Disease Management Care Blog remembers her very well. She had come to the United States after escaping on foot from post-war Hungary.  She liked to have sliced pears and cognac for lunch. As her health began to fail, her stubbornness began to exceed her self-sufficiency, leading to multiple hospitalizations. One time, despite making sure she had a post-discharge outpatient appointment, a fresh pile of prescriptions and home visiting nurse services, her illness flared and she had to come back to hospital.

She was not only my patient, but she represented one of Medicares dreaded readmission statistics.

By now, DMCB readers know that CMS, buoyed by its value-based purchasing program, has targeted readmissions by reducing payment levels to hospitals that fall outside the expected norm. Threatened by the loss of income, it’s assumed that hospitals will respond by developing higher quality discharge planning and care programs that keep patients from having to come back.

An important part of reducing readmissions is to identify those patients that are at greatest risk. That would help on two levels:

1) if a hospital had more than its fair share of patients at risk, it could argue that an increased number of readmissions is the result of a sicker patient population and not quality of care. As a result, the hospital could be held "harmless;

2) hospitals would be able to focus extra care resources on those patients who are spotted early as likely to come back, thereby reducing the readmission rate.

In other words, patients like the lady from Hungary would not necessarily lead to a cut in hospital payment rates and, for example, she could be proactively given extra care, such as a doctor appointment within 48 hours, a week’s supply of free medications and twice a day home nurse visits.

Which is why this just published JAMA article "Risk Prediction Models for Hospital Readmission" by Devan Kansagara, Honora Englander, Amanda Salanitro David Kagen, Cecelia Theobald, Michele Freeman and Sunil Kripalani is important.  The authors set out to see what the evidence-based published scientific literature had to say about predicting readmissions.   They filtered thousands of erences, reviewed 286 publications found 30 rigorous studies that described 26 models. 

To the DMCBs delight, the authors applied a “c statistic” to the 30 publications to assess a wide variety of retrospective and concurrent prediction methodologies using a host of data inputs such as age, gender and past diagnoses. According to this article, the c (or "concordance") statistic measures how well a test can predict the presence or absence of a "condition" which, in this case, was being readmitted to the hospital.  One way to think of this is the likelihood of correctly identifying a condition when there are two people, one with it and one without it.  If the likelihood is 50%, thats no better than random guessing.  If its 100%, thats perfect.  By the way,if this sounds a lot like the area under the receiver operator curve, youre right.

And what did the all-seeing "c statistic" say?  All of the published models had disappointingly similar levels of performance that ranged between the extremes of .52 to .83 with most in the .50 to .7 range. Whats more, only one study examined the most important question of all: is it possible to find patients with preventable readmissions?

What does the DMCB think?

1) This may be another area where national health policy has gotten out in front of the scientific evidence.  If we cant reliably assess or predict readmissions with sufficient accuracy, there is a distinct likelihood that statistical variation, not quality of care, will lead to some hospitals being victimized by CMS with lower payment rates. Whats more, if hospitals cant tell which patients are likely to come back, how are they supposed to target their expensive care management programs at those who are most likely to benefit?

2) There are undoubtedly some proprietary predictive models that havent been reported in the literature that claim to have higher levels of accuracy.  Yet, without the scrutiny of successful peer-reviewed publication, itd be difficult to believe that theyre really any better than the mainstream published range of .5 to .7.  The next time the DMCB runs into one of these outfits, its going to ask about the "c statistic" and if they havent published their results, why not.

3) Last but not least, while the hospital payment rates are being held hostage by CMS, its the doctors that are making the call on readmissions based on the best interest of their patient.  The c statistic suggests that that will be the most important determinant in the readmission rate.

The Disease Management Care Blog finally caught up with it. 

Heres its take:

Its a well-written and traditionally crafted summary of CMS six demonstrations that had the participation of 34 programs:

Care Management for High Cost Beneficiaries
Medicare Coordinated Care
Disease Management for Dual Eligibles
Informatics for Diabetes Education and Telemedicine
Disease Management for Severely Chronically Ill Beneficiaries
Medicare Health Support

Why Demos?

Demos are used by CMS to test innovative care strategies before they are formally adopted as a covered benefit in the fee-for-service program. These demos were funded because CMS knows that half of all Medicare beneficiaries have five or more chronic conditions and that they account for 75% of its costs. In addition, up to 50% of beneficiaries are not receiving recommended care, such as vaccinations and cancer screening.

How Did the Demos Work?

The programs enrolled persons with a variety of chronic conditions such as diabetes and heart failure. Kick off dates ranged from 2000 to 2005. "Hierarchical condition categories" or high baseline expenditures were used to identify and target the persons at high risk. All used care coordination nurses who were typically - but not always - remote and disconnected from the physicians. There was little information on admission criteria to the programs, on the training or credentials of the care managers, the approaches used in to manage transitions across care settings or improving medication compliance.

What Was the Bottom Line?

On average, the programs were unable to achieve savings in excess of Medicares fees.

The programs reduced hospitalizations by an average of 7%. In order for Medicare to have saved money based on the disease management fees, the hospitalizations would have had to be reduced by 11%. Programs that involved greater in-person interactions between nurses and patients appeared to have greater success in reducing admissions rates.

The evaluation was also statistically stymied by relatively low numbers of patients in some of the programs. It is possible that there were savings, but if they exist, they were too small to be detected by widely accepted statistical methods.

So What DMCB Conclusions Can Be Drawn and Why?

There are two:

1.The "versions" of disease management used by Medicare from 2000-2005 relied on approaches used in commercial settings from 1995-2000. These deployed remotely stationed nurses calling patients with worrisome cost patterns. From 2000-2005, commercial insurers and employers knew that wasnt working and transitioned to more sophisticated engagement protocols as well as in-person care programs tailored for patients with high as well as modifiable risk.

In other words, the impact of later versions - like this, this and this - of disease management in fee-for-service Medicare remains largely unknown. Thats why the CBO report ends with the conclusion that....

"...the demonstration results indicate that additional experimentation, evaluation, and inement over a period of years will probably be needed to identify policies involving disease management and care coordination that can significantly reduce Medicare expenditures."

Of course, by the time CMS gets done with more years of "experiments," "evaluation" and "inement," those results will likewise be obsolete.

2. This begs the question: if Medicare cant achieve savings, why do practically all insurers and most self-insured employers still include disease management programs in their benefit designs?

The DMCB suggests that in addition to a growing body of peer-reviewed literature showing that more modern (and still untested by Medicare) disease management is "efficacious," non-governmental insurers have some additional advantages that increase real world effectiveness:

1.Using disease management as only one component in an overlapping suite of other mutually supportive programs, including consumer-based incentives to rely on primary care, value-based insurance designs, intelligently restricted networks and concurrent wellness and prevention programs.

2. Access to internal assessments of program success that will never be submitted for publication in the peer reviewed literature.

3. Flexible program adaptation to the myriad local cultural and community factors that determine success. After all, what works in a motorcycle factory in the Midwest may not work in a cubicle farm in Silicon Valley.

The DMCB Bottom Line:

While the CBO report is technically correct, it promotes the tired canard is that modern disease management consists of naive nurses making blind calls and exhorting baffled consumers to take better care of themselves. In addition, the idea that single standard can be implemented everywhere in a stand-alone fashion is a pipe dream. No wonder Medicares disease management demos have failed.

The Feds need to figure out how to implement disease management, not what doesnt work.

If youre one of those disease management skeptics, you might enjoy the lingering anti-vendor schadenfreude of this bottom-up re-analysis of the MHS program that was just published in the New England Journal.  However, if you are a fan of the Feds programs for the Patient Centered Medical Home or Accountable Care Organizations, youll also want to pay close attention to a timely reminder about the perils of contracting with CMS.

The Disease Management Care Blog explains.

Recall MHS was a CMS program designed to test old fashioned disease management in fee-for-service Medicare.  A total of eight vendors launched their programs in separate geographic areas across the U.S. in the latter half of 2005.  Each area had about 30,000 beneficiaries with diabetes and heart failure who were randomized to disease management or usual care in a 2:1 ratio.  Participants were ill with an average of more than one recent hospitalization in the previous 12 months and more than $15,000 in baseline costs.  The programs consisted of remote call centers staffed by nurse-coaches who counselled patients on a regular basis.  Each of the vendors negotiated a monthly "at risk" administrative fee from CMS.  To retain the fee, the companies had to reduce costs in excess of the fee and simultaneously achieve a variety of quality and satisfaction targets vs. the usual care patients.  If they failed to save enough money, CMS clawed the money back.

The Journals reanalysis, involving more than 240,000 beneficiary-participants, didnt shed any new light on the original depressing report to Congress.  Among the eight vendors, the change in the per beneficiary per month (PBPM) cost ranged from $22 in savings to $38 in additional costs; most of the PBPM changes were in the single digits.  In contrast, the fees ranged between $74 to $159 per beneficiary per month.  Only three of the eight vendors had lower costs, none achieved statistical significance and none had savings that exceeded their fees. There were some improvements in quality, but they were spotty and quite modest.

Participation rates among eligible beneficiaries averaged 85%.  Mean telephone contacts per patient was .7 per month and ranged from .4 to 1 per month.  Patients were telephoned on average every 2.7 months; over a 30 month period, 59% were contacted at least 10 times and 23% were contacted fewer than 5 times. 

And what are the lessons?

The authors had five, all of which also apply to the medical home and ACOs.  The DMCB has two more.

1) Show me the money:  In retrospect, the research that led to MHS that suggested that disease management "worked" was imperfect.  By the way, the same can be said of the largely observational and underpowered research supporting medical homes and the total lack of any meaningful experience with ACOs.  Will these innovative care approaches share the same fate as MHS?  Based on what we know at this time, it cant be ruled out.

2) Needy patients:  Medicare beneficiaries with diabetes and heart failure are sick. The nurse-coaches were unprepared to meet all of their patients needs.  Medical homes and ACOs may end up being surprised also.

3) Analytics:  In the CMS "data dumps" to the vendors, it was difficult to find the patients who were the most vulnerable.  This good news is that modern predictive modeling analytics - despite its limitations - may enable medical homes and ACOs to target their care management at those patients with the greatest need and at the highest risk for increased costs.

4) Timely access to data: CMS data transfers to the vendors could be tardy, resulting in telephonic outreach to patients long after it could have done any good.  ACOs will need to worry about this in their dealings with CMS. 

5) The doctors: despite the vendors assurances, the disease management programs were not aligned with the beneficiaries doctors.  This is less likely to be a problem in medical homes and ACOs, but doesnt mean that they wont have to worry that their docs arent fully buying into the notion of teaming with non-physicians.

The DMCB offers two other lessons:

In retrospect, calling sick Medicare patients infrequently may have been one factor in MHS undoing.  The telephone will probably have a role to play for medical homes and ACOs, but the best mix of telephonic and face-to-face visits remains an open question.  At any rate, it seems that contacting patients at least every 30 days would be a good benchmark.

The DMCB remembers the confident "this is guaranteed to work!" hubris of yesterdays MHS architects and finds it eerily similar to the enthusiasm surrounding todays medical homes and ACOs. If the Medicare medical home and ACO programs dont work out, itll set these innovations back ten years or more.

Image from Wikipedia

Simultaneous conservative praise and liberal support for something called the "Wyden-Ryan Plan" prompted the inquisitive Disease Management Care Blog to look up the document. 

Could this be **THE** template for a grand bipartisan compromise orm of Medicare?  Thanks to this consolidated DMCB summary, readers will not only get to ponder that question, but contrast their health market and business acumen with non-DMCB coworkers and colleagues with self-serving and career-advancing questions like:

"So Barry, do you foresee any business opportunities related to the annual risk review audit envisioned in the Wyden Ryan plan?"

Without further ado, here are the facts:

Persons who are currently age 55, i.e. become Medicare eligible on or after January 2, 2022, can choose to be enrolled in either

1) traditional Medicare "as we know it" or,

2) a competing commercial plan with "premium support" funding provided by Medicare.  This option includes either old fashioned Medicare Advantage or a fee-for-service plan.  Either would be required to provide a benefit package that is "actuarially equivalent" to standard Medicare. 

Beneficiaries are given a voucher to pay for Medicare advantage or the fee-for-service plan.

What is the value of the voucher?  It depends on a competitive bidding process.  Competing commercial plans would have to submit premium bids to CMS. For any service area, the second lowest bid would serve as the local benchmark.  If a beneficiary chooses that plan, they would be given a voucher that pays the bid i.e. the full cost of the insurance.  Beneficiaries are free to chose other plans that submitted a losing bid, but the beneficiaries pay the difference.  If a beneficiary chooses that plan with the lowest bid, Medicare will rebate the difference.

If the beneficiary is older or sicker than average, the amount in voucher will be "risk-adjusted" upward.  Lower risk beneficiaries would have their voucher adjusted downward.  This is designed to compensate insurance plans for the increased risk of enrolling sicker patients.  Participating plans would be required to accept anyone who applies for coverage.  That means there would be no underwriting, i.e., no cherry picking i.e. there would be guaranteed issue.

Once enrollment is complete, plans would be subjected to an "annual risk review audit." Those with an excess of low risk enrollees would pay a fee to make up for a more profitable book of business, while those with an excess of high risk enrollees would get a rebate.

If, despite the introduction of competition described above, Medicares nationwide costs exceed the growth of the U.S. gross domestic product (GDP), Congress would be "required" to act with a suite of options including reducing provider payments or requiring richer seniors to pay more (i.e., means testing).

Competing plans would be listed in an exchange.  They would also be closely overseen by CMS.

Beneficiaries could switch plans during an open enrollment period

Medicares Part A and B deductibles would be combined and a cap that limits out of pocket spending.

So what is the DMCBs take:

"Medicare Advantage" and fee-for-service plans for Medicare beneficiaries are not new.  Whats new is the introduction of vouchers. The DMCB predicts critics will view vouchers as a political Trojan Horse ultimately intended to undo traditional Medicare.

The plan relies on competitive bidding to drive down costs.  Its unclear if bidding will be the "tail" that wags the "dog" of an aging U.S. population that wants the best and a health care-technology industrial complex that wants to sell their goods at the highest price point they can justify.

Recall all those past protests from the insurance industry over the prospect of competing with a publicly funded program?  The DMCB thinks this is different because they will benefit from Medicares price controls.

Ingredients for commercial insurer voucher success will include actuarial smarts over the details of prospective risk adjustment and retroactive claw backs, neutralizing the pernicious effects of variation with high enrollment and not only making money but doing right by the beneficiaries with a higher level of service.  If all they do is return value to their investors, Congress will shut em down.

Last but not least bloggers smarter than the DMCB have problems with the proposal and are worth a look.

According to this just-released Health and Human Services Issue Brief, the percent of U.S. physicians "accepting new Medicare patients" increased from 87.9% in 2005 to 90.7% in 2012. Whats more, this rate of uptake of new Medicare beneficiaries is tracking higher than the rate of "new privately insured patients."

The Issue also says there "may" have been a "very small increase" in the number of docs who have dropped out of the Medicare program. Those drop-outs appear to be greatest among psychiatrists (1.1%) and plastic surgeons (1.6%). In contrast, only 0.35% of primary care physicians have dropped out. These drop-outs have been more than compensated for by the new physicians entering the labor market.

Except for 2012, these data are from the in person interviews that comprise the National Ambulatory Medical Care Survey, The 2012 numbers are described as "interim," because they are based on a mail-in survey.

The Issue brief also quotes a separate MedPAC annual survey of thousands of Medicare beneficiaries. According to the brief, 77% reported they never experienced a delay in getting an appointment for routine care, compared with 76% in 2008.

Case closed, right?  The Disease Management Care Blogs dire warnings about a widespread provider exit from Medicare that was echoed years later by the Wall Street Journal have been overblown.

Not exactly, speculates the DMCB, for the following reasons:

1. The DMCB pulled a copy of the NAMCS survey and found the question that was apparently used to assess physician participation. The screen shot is above. It generically ers to "Medicare," not fee-for-service Medicare.  Because many physicians are members of insurance networks, an affirmative answer could be misinterpreted by the respondents as erring to Medicare Advantage. 

2. There is a difference between "accepting" new patients vs. welcoming new patients. In this seminal New England Journal study, many respondents "accepted" "new" Medicaid beneficiaries, but moved them to the back of the appointment queue.

That being said, the MedPAC survey suggests that isnt happening           - yet - to Medicare beneficiaries. And thats assuming a health care consumers definition of "delay" hasnt been dumbed down since 2005.   

3. Last but not least, the NAMCS numbers represent a national average. Many areas of the country have seen consolidation of physician practices into larger groups. The DMCB suspects these entities are more willing to accommodate Medicare beneficiaries. Its very possible that the smaller physician-owned practices - many of whom practice in rural areas - are less likely to do so in 2013 than they were in 2008.

Coda:

In yesterdays post, the DMCB was introduced to "twerking." After additional inquiries of the DMCB spawn, it has learned more about this curious phenomenon. 

Which led to this insight:

Q: What is one key similarity between twerking and being an ACO?

A: You better be caul doing both, otherwise you could get screwed.



.

Even on the 100th anniversary of RMS Titanics sinking, the Disease Management Care Blog cant make it through a single sitting of either A Night to Remember or James Camerons Titanic.  It only cares to watch the films last half hour.

That doesnt mean that the DMCB cant use the tragedy as a Medicare metaphor. 

To wit:

1.  We still believe the guarantee that Medicare is unsinkably going to meet its obligations.

2.  The threat is a huge fiscal iceberg that we know exists. It will not be seen until it is too late.

3.  Medicares design experts were likewise stunningly wrong.

4  The regulations, made years if not decades ago, remain hopelessly obsolete.

5. The twin unpredictable Black Swan mirages and tides of a) "savings" and b) technology can only be recognized in retrospect.  And there are other "unknowns" out there.

6.  Those presently in charge can be wrong about remaining calm: if the ship is listing, its time to panic and run for the lifeboats.

7. Once disaster strikes, ill-conceived actions can make things worse.

8.  Whether its news or movie media, much of what we think we know is a littered with historical inaccuracies.

9.  If the ship goes down, the lowest socioeconomic classes will suffer the most.

10. When we deal honestly with the lessons of a disaster, we can eventually build a better and safer system.