0 Medicare Accountable Care Organizations Medical Homes Experimental Potential or Essential

Time to measure some
new Medicare office drapes?

One major and longstanding criticism of CMS numerous innovation and demonstration projects is that they seldom lead to any meaningful orm of the core Medicare program.  In response, the Affordable Care Act created an "Innovation Center."  Despite legions of lobbyists, a third rail dread afflicting our political class and a powerful Medicare voting bloc, the intrepid folks in the Center promise to deliver insights that will advance quality, lower costs, increase access and spare all sacred cows.

Naturally, the thousands of health care experts who regularly read the Disease Management Care Blog have their doubts.  As a result, theyre unlikely to be moved by Karen Davis and colleagues "Medicare Essential" proposal appearing in the May issue of Health Affairs.

Assuming that the most wildly optimistic Accountable Care Organization (ACO) and medical home pilot programs projections are fulfilled, Dr. Davis et al propose the creation of a new "Medicare Essential" program that would co-exist with standard Medicare and Medicare Advantage.

"Essentials" essential purpose would be to finance ACOs and medical homes.  Given the authors enthusiasm, the DMCB is surprised that their Health Affairs paper isnt also recommending measuring drapes for the programs new offices.
 
In "Medicare Essential," Parts A (hospital), B (providers) and D (drugs) would be combined. There would be a single overall deductible, followed by low co-pays for primary care and higher co-pays for specialty and emergency room care Preventive care would have first dollar coverage. Pharmaceuticals would be governed by a single national formulary with low co-pays for generics as well as for perred brands and condition-specific/value-based drugs. Persons in the "Essential" program who are receiving care in ACOs or medical homes (financed with capitation, bonuses, gain sharing and monthly fees) would naturally have even lower co-pays.
 
Using "modeling by the Actuarial Research Corporation" and, as the DMCB understands it, transferring all savings back to the beneficiary, monthly out-of-pocket costs for the average Medicare enrollee could be reduced from the currently level of $427 to $354.  As an added bonus, if the patient used an ACO/Medical Home, the out of pocket would be further reduced to $254.

Case closed, right?

The DMCB isnt too sure.

Dont Measure Those "Essential" Medicare Program Office Drapes Quite Yet: While Davis et al should be commended for sending the savings back to the patient instead of Uncle Sam, their optimistic actuarial "research" projections cant be based on any consistent, statistically significant and real-world published proof.  Thats because there is no consistent, statistically significant and real-world published proof that ACOs and medical homes save money.  Come back, says the DMCB, when you have an analysis based on some real numbers.

Behavioral Economics: Furthermore, we dont know if monthly beneficiary savings of $73 to $173 are enough to move market share away from Medicare and Medicare Advantage to "Essential."  Thats doubly true if ACOs and medical homes, despite their quality, are viewed by patients as another way to impose a restricted network.

Disease Management Playbook: Advocates for the earliest versions of disease management likewise used official sounding projections to confidently project huge benefits for the Medicare program. When reality rudely intruded, the industrys fall was spectacular and almost fatal.  With friends like Dr. Davis similarly doubling down with huge ACO and medical home promises, who needs enemies?

Reinventing A 3rd Wheel? Many Advantage plans have similar co-pay arrangements and are already investing in ACO-like and medical home programs in their networks. They are likewise more than able to leverage out-of-pocket expenses to incent beneficiary behavior.

Suppose You Gave An ACO Party and Nobody Came? The last time the DMCB looked, many parts of the country lacked fully functional ACOs and medical homes. Dr. Davis says beneficiaries will respond by demanding local access to the Essential program and theore turbocharge additional health orm. The DMCB is unaware of any published data that supports that notion and, furthermore, wonders if the local lack of these programs will translate into even more variation in the U.S. health care system.

0 What Is The Difference Between Pay for Performance and Accountable Care Organizations

Wheres that evidence?

The Disease Management Care Blog has occasionally wondered about the difference between pay for performance (P4P) and accountable care organizations (ACOs).  While the latter involves a more explicit transfer of risk, it thinks the underlying logic for both is ultimately the same: better quality performance should translate into less sickness, fewer specialist physician visits and reduced hospitalizations which, in turn, should save money that can be shared with the providers.  Assuming thats true, the possibility of getting that kind of money should prompt physicians to prevent, coordinate, counsel, immunize and screen instead of treat, er, ignore, not immunize and hustle out the door.

Unfortunately, a recently published Cochrane Review says otherwise. 

The DMCB likes CRs because they are state-of-the-art and highly disciplined reviews of the worlds scientific medical literature.  In this instance, after an exhaustive examination of every published paper on the topic of P4P, the authors conclude....

"....there is insufficient evidence to support or not support the use of financial incentives to improve the quality of primary health care."

The DMCB will be the first to argue that academic, rigorously conducted, randomized and controlled clinical trials are not the final answer when it comes to managing the subtle complexities of physician behavior change.  The DMCB has run into some very smart and passionate physician leaders who have few doubts about the real world links between P4P, increased quality and reduced cost.

That being said, given the commonalities between P4P and ACOs, no one should assume that ACOs are going to succeed based on any notions of "evidence" that the promise of savings will translate into a changed physician workforce.   Cochrane says it just aint there.