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Fixing health care doesn't necessarily need political reform

Fixing health care doesn't necessarily need political reform | Healthcare and Technology news |

It’s very hard to find a product or service that is both lousy and unaffordable. Such expensive duds are usually quickly replaced by cheaper and better competitors. Prior to the Affordable Care Act, health care was becoming more expensive every year while simultaneously becoming less convenient, less personal, and less satisfying. In 2009, I wrote a series of four posts explaining how the health care marketplace reached such a sorry state and offering a suggestion for reform.

Since then, the Affordable Care Act has passed. For many, insurance has become much more affordable, but whether this translates to better or more affordable care remains to be seen. If it results in many patients receiving affordable insurance that very few physicians accept, then the situation will be a repetition of the Massachusetts experience with universal coverage: Everyone has insurance; no one has a doctor.

At the same time, the intrusive and complex bureaucracy that physicians must navigate to collect insurance payments has vastly expanded. Physicians are now coerced into serving as the workforce for Federal plans to collect health care data, cut costs, and make their care increasingly legible to payers but increasingly opaque to patients.

Bear with me for just a few examples. In an ill-advised plan called “meaningful use,” physicians receive incentives for submitting complex reports documenting their use of electronic health records (EHRs). The time and effort required to comply with this program has earned it much scorn from physicians. And the incentives will likely distort the true value of EHRs and inflate their costs.

The International Classification of Diseases (ICD) is the coding system used by physicians and billers to report to insurance companies patients’ diagnoses. In October, the government will update ICD to its tenth version. ICD-10 will contain radically more complexity than its predecessors. It is widely ridiculed for the detail with which diseases must be reported. (Code V91.07XA is for a “burn due to water-skis on fire.”) The transition to ICD-10 was already postponed once, and I predict it will cause much disruption and grief.

My last example is the recently passed sustainable growth rate (SGR) fix which gets rid of the annual congressional scramble to increase Medicare reimbursement to physicians by increasing reimbursement in the short term, but tying reimbursement to outcomes measures in the long term. This is sure to become a data collection and reporting hassle that makes doctors long for the simpler days of meaningful use.

I honestly believe that there has been more bureaucratic complexity added to the typical physician’s life in the last few years than in the twenty years before that. None of it cares for a single patient.

Two weeks ago, my family and I spent ten days visiting New York City. We had a wonderful time. The services that completely transformed our experience were the ride sharing services of Uber and Lyft. We never used public transportation. We never hailed a taxi. For longer trips (and a family of five) this was likely cheaper than train tickets. For shorter trips, it meant not handling cash, never finding bus or subway stops, and never referring to transit schedules.

For years, passengers complained about high taxi prices and poor taxi service, and potential competitors complained about the legalized monopolies given to taxi companies by city governments. But rather than bang their heads against these barriers, companies like Uber and Lyft just started giving people rides.

This was an epiphany to me. I had always assumed that fixing the health care marketplace would mean political reform — undoing the myriad laws that substituted insurance for health care and caused prices to skyrocket, and dismantling the byzantine bureaucracy that physicians must navigate. Now, I understand that political reform is both unrealistic and unnecessary.

Doctors and patients aren’t waiting for political reform. More and more doctors are “going off the grid” to provide excellent care unencumbered by insurance regulations. Concierge primary care is just one example. The Surgery Center of Oklahoma lists on its website the prices for every surgery it offers. The prices are all-inclusive. You won’t get a separate bill from the anesthesiologist, the surgeon, and the facility. And they don’t care what insurance you have because they won’t deal with any insurance company. Other innovative companies are using video conferencing technology to connect patients to doctors thousands of miles away. LUX Healthcare Network (with which I’m proud to be associated) is building a multi-specialty concierge physician network.

I argued six years ago that using insurance for routine care is wasteful. I now realize that attempts at universal coverage and the bureaucracy that comes with it — ICD-10, meaningful use — will never be repealed. This bureaucracy will become the taxi monopolies of health care — increasingly ignored by both doctors and patients and increasingly irrelevant. The successful enterprises in health care will connect doctors and patients and then get out of the way. Like Uber and Lyft they will help patients find the service they want at a price they’re happy to pay, and they will facilitate not regulate the delivery of excellent care.

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Modernizing Medicare: An important first step

Modernizing Medicare: An important first step | Healthcare and Technology news |

The Medicare program is at a crucial juncture: it is responsible for 25 percent of all federal outstanding debt this century, and the total continues to grow. Every day, 10,000 newly eligible seniors enter a Medicare health insurance program whose budget needs are already escalating out of control. This path is simply unsustainable. 

Just as troubling is the fact that all those Medicare dollars are not delivering the top-quality health care that senior citizens deserve.  A quick look at how Medicare pays for care makes plain why this is so.  Under its antiquated “fee-for-service” approach, Medicare pays for services delivered, rather than for outcomes achieved.  We know that prevention and care coordination are essential, for instance, but the current payment system does little to encourage or reward this.  Since Medicare is the largest payer of medical bills in the United States, the poor incentives embedded in its fee-for-service approach set a subpar standard for care throughout the American health care system.

It’s past time for Medicare to be modernized. A sensible first step toward this objective is with post-acute care bundling – payment based on the treatment of an entire illness or injury, not each individual service provided. 

Over the next 10 years, Medicare is projected to spend nearly $1 trillion on medical treatment for seniors who have been discharged from a hospital. But what are we currently getting for all that money?  A study by the Alliance for Home Health Quality and Innovation showed that primary chronic conditions do not explain variation in Medicare payments across setting or clinical conditions. Many seniors are returning to the hospital while millions of others are receiving treatment that is not coordinated, is not of sufficient quality, and is not being delivered in the most clinically-appropriate and cost-effective settings. The fee-for-service approach costs Medicare money and seniors’ their health.

Research suggests that one way to approach reform would be to replace fee-for-service with condition-specific bundled payments modeled on the DRG system that hospitals have been using with great success for three decades. This would allow patients and their families to choose their own providers and networks to coordinate patient care for a period of time, such as 60 or 90 days following discharge from the hospital at a rate determined based on the patient’s clinical condition. If a patient returns to the hospital during that period, or if the cost of her care exceeded the amount of the bundle, the coordinator would bear the loss. If the patient’s needs were met effectively such that she didn’t need to be re-hospitalized and her costs were less than the bundle amount, the resulting savings would be split among the coordinators, physicians, discharging hospital, and the participating post-acute care providers.

This type of approach was effective in the past was the Department of Veterans Affairs’ Home Based Primary Care demonstration program, which used teams of health care providers to provide coordinated care for participating veterans with chronic and disabling conditions who needed more continuous care. This program was able to reduce days spent in hospitals by 62 percent, and overall care costs for this uniquely expensive population dropped by 24 percent.

Applying this type of program to Medicare would modernize it by rewarding participants for the delivery of high-quality, coordinated care in the most clinically appropriate, cost-effective manner possible. Different approaches to this reform have previously been proposed by Reps. David McKinley (R-W.Va.) and Tom Price (R-Ga.) and by Rep. Diane Black (R-Tenn.). Post-acute care bundling would simultaneously keep costs low while preventing risky hospital readmissions for seniors.

Taxpayers and the Medicare Trust Fund would likewise benefit.  This type of proposal could limit overall spending on post-acute care to a percentage of what those same services would cost in a fee-for-service setting without the need to make cuts to provider reimbursement. 

Modernizing Medicare is no longer an option – it’s an imperative.  Bundling post-acute care services is an important first step.

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