Trickle-Down Medicare

David Blumenthal, MD, President of the Commonwealth Fund, and heads of 4 other foundations – The John A. Hartford Foundation, The Peterson Foundation, the SCAN Foundation, and the Robert Wood Johnson Foundation, have joined forces to improve care for high-need, high-cost (HNHC) patients,  most of whom are Medicare recipients with chronic disease.

These patients, 5% of the population, account for an estimated 50% of costs. Blumenthal writes that 3 steps will be required t meet the needs of these patients.

·         Understanding this diverse population better.

·         Identifying “evidence-based programs” that offer integrated care at lower costs.

·         Accelerating adoption of these programs on a national level.

The programs to which Blumenthal refers are Accountable Care Organizations , which now number 848 and cover 28 million Medicare patients, MACRA (Medicare Access and Children’s Health Insurance  Reauthorization Act), and other so-called alternative payment programs to be introduced in 2017.   These programs are all intended to replace the Sustainable Growth Program, which has been in existence since 1997,  by phasing out fee-for-medicine which, in the eyes of CMS, encourages fragmented and unnecessary care.

The through to give “providers” incentives to provide better quality care at reduced costs, presumably by closer collaboration ,  bundled payments,  gathering vast amounts of data from electronic health records, and intervening early in care to improve and maintain patients’ health, while saving money , improving quality and outcomes, reducing costs, and, as an incentive, letting hospitals and doctors share “savings, if any.

All of these programs are, in essence, experimental demonstration projects.   ACOs have been around for more than 5 years,  and have a mixed record.  Many of the original “Pioneer ACOs,’ have dropped out of these organizations, because of lack of savings, expenses in setting up and implementing,   federal penalties exacted, and provider and hospital dissatisfaction.    MACRA has yet to be implemented,but is looked upon with dread by many physicians in  surveys.

I wish CMS lots of luck,  HNHC, like most large federal programs bearing new acronyms, will require a vast new bureaucracy to enforce and high levels of collaboration among physicians, primary care physicians,  specialists , hospitals, communities, social service organizations, academics, researchers and others to carry off.  It will  entail phasing out fee-for-service, still the primary mechanism for charging for physicians’ services.   Finally, it will succeed only if it minimizes the number of referrals to specialists and reduced their fees,  not a small tasks when one considers that two-thirds of physicians are specialists  who will not commit financial hari-kari voluntarily.

Source: David Blumenthal, MD, et al,  “Caring for High-Need, High-Cost Patients- an Urgent Priority,” NEJM,  September 8. 2016.