A key government experiment that set out to lower costs and coordinate care for Medicare patients -- now the blueprint for an innovation the Obama administration is trying to move to a national scale -- has failed to save a substantial amount of money, according to results released by the federal Centers for Medicare and Medicaid Services (CMS).
The five-year test overseen by CMS enlisted 10 leading health systems around the country and offered financial bonuses if they could save enough by treating older patients more efficiently while providing high-quality care.
In 2010, the final year, just four of the 10 sites, all long-established groups run by doctors, slowed their Medicare spending enough to qualify for a bonus, according to an official evaluation not yet made public but initially reported by the Washington Post. Two sites saved enough to get bonuses in all five years, the evaluation shows, but three suprisingly did not succeed even once.
The uneven progress is significant because the experiment involves Accountable Care Organizations (ACOs), one of the hottest trends in health policy and an idea included in the year-old federal law intended to overhaul the nation's health care system.
THe ACO provision within the Patient Protection and Affordable Care Act (PPACA) calls for the Medicare program to approve teams of doctors or hospitals to run such organizations -- a new twist on the old idea of managed care -- starting in January 2012. Although important details differ, the basic tenets of the experiment and new ACOs are the same: Medicare shares savings with health organizations if they can treat older Americans for less money and attain specific hallmarks of quality.
What can -- and cannot -- be accomplished by changing the way Medicare pays for and delivers care is particularly relevant now because the Obama administration proposed rules this spring for groups that want to become ACO's under Medicare. Many health care providers, including the leaders of all 10 sites in the experiment, are complaining that the rules the Obama administration proposed would to too burdensome.
This experiment first began in 2005 under the George W. Bush administration and it focused on achieving cost savings while improving quality outcomes for Medicare patients. The initiative offered "performance payments" to participants that met most of 32 measures of quality -- half as many as in the proposed rule -- and spent at least 2 percent less for Medicare patients, compared with a group of similar Medicare patients outside the experiment who lived nearby who served as control groups for the experiment.
Despite their spotty financial progress, all 10 medical groups in the experiment met the quality requirements. And the program fostered innovations in care, according to administration officials, outside health policy experts, and leaders of the groups.
One of the participants, Wisconsin's Marshfield Clinic, was by far the biggest winner of bonus payments. Over the first four years of the fuive year study Marshfield Clinic saved the Medicare program more than $83 million.
As a result of that achievement in cost savinfs Marshfield received a bonus payment of about $16.15 million which it says will be used to fund further changes and improvements in how Marshfield Clinic delivers care to all of our patients,” Praxel said. “The performance payment Marshfield Clinic receives will allow us to continue beneficial health care activities that are not currently reimbursed by most insurers right now.”
According to Theodore Paxel, Marshfield's medical director, the experiment prompted the 95-year-old organization to create an innovation in patient care. Marshfield created a telephone line with nurses available day and night, and half of the people who called last year received enough advice that they did not need to visit a doctor.
Marshfield also set up an innovative care management program for patients with congestive heart failure. Every day, the patients are in touch by telephone with an interactive device that asks them to punch in their weight and answer a few questions. If any of their responses are medically suspicious, someone from the clinic calls right away.
In contrast, the Billings Clinic in Montana put into place similar innovations but never qualified for a bonus payment. The medical director, Doug Carr, said the group did not start out as far along with its electronic health records (EHR) -- a vital tool to coordinate care. At the same time, Marshfield Clinic has been a leader in EHR development having been the first health system to achieve Certification Commission for Healthcare Information TechnologySM (CCHIT) certification back in 2007.
This perhaps signals that EHRs are an essential component of quality coordinated care in helping Marshfield Clinic perform so substantially better than Billings Clinic.
The leaders at some of the sites, formally known as the Physician Group Practice Demonstration, say that technical rules for comparing their Medicare patients to ones outside the experiment made it difficult to demonstrate savings. Other health policy experts say that patients in the experiment look sicker on paper than the ones outside, but that it was a false impression, because the experiment gave the medical groups an incentive to submit lots of diagnostic codes within their billing procedures.
