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  #1  
Old 07-04-2018, 10:04 PM
kooky cookie kooky cookie is offline
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Default Transformation of the Health Care Industry: Curb Your Enthusiasm?

I found this article fascinating. It discusses how we embrace programs and ideas in health care financing without any real evidence or logic regarding why it would work.

It's by LAWTON R. BURNS and MARK V. PAULY, it was published in the March 2018 issue of Millbank Quarterly.

"Context: There is a widespread belief that the US health care system needs to
move “from volume to value.” This transformation to value (eg, quality divided
by cost) is conceptualized as a two-fold movement: (1) from fee-for-service to
alternative payment models; and (2) from solo practice and freestanding hospitals
to medical homes, accountable care organizations, large hospital systems,
and organized clinics like Kaiser Permanente.
Methods:We evaluate whether this transformation is happening quickly, shifting
risk to providers, lowering costs, and improving quality.We draw on recent
evidence on provider payment and organization and their effects on cost and
quality.
Findings: Data suggest a low prevalence of provider risk payment models
and slow movement toward new payment and organizational models. Evidence
suggests the impact of both on cost and quality is weak."

This got me wondering how the powers that be decide to implement things like ACOs, PCMHs, etc, etc. What evidence are they looking at? Do they actually think the programs will work as advertised, or is that not even the point?

Is there anywhere that the public (I) can access information about how such programs were decided upon? I'd love to see their evidence and read the conversations they had about it. On the one hand, it seems like that information should be available to the public as we're the ones footing the bills for Medicare, etc, but on the other hand, that's probably really naive...

Thanks!!
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  #2  
Old 07-04-2018, 10:38 PM
Dr T Non-Fan Dr T Non-Fan is offline
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Insurers created networks in order to beat other insurers. It's that simple.
IMO
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  #3  
Old 07-05-2018, 09:15 AM
WhosOnFirst WhosOnFirst is offline
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Quote:
Originally Posted by kooky cookie View Post
I found this article fascinating. It discusses how we embrace programs and ideas in health care financing without any real evidence or logic regarding why it would work.

It's by LAWTON R. BURNS and MARK V. PAULY, it was published in the March 2018 issue of Millbank Quarterly.

"Context: There is a widespread belief that the US health care system needs to
move “from volume to value.” This transformation to value (eg, quality divided
by cost) is conceptualized as a two-fold movement: (1) from fee-for-service to
alternative payment models; and (2) from solo practice and freestanding hospitals
to medical homes, accountable care organizations, large hospital systems,
and organized clinics like Kaiser Permanente.
Methods:We evaluate whether this transformation is happening quickly, shifting
risk to providers, lowering costs, and improving quality.We draw on recent
evidence on provider payment and organization and their effects on cost and
quality.
Findings: Data suggest a low prevalence of provider risk payment models
and slow movement toward new payment and organizational models. Evidence
suggests the impact of both on cost and quality is weak."

This got me wondering how the powers that be decide to implement things like ACOs, PCMHs, etc, etc. What evidence are they looking at? Do they actually think the programs will work as advertised, or is that not even the point?

Is there anywhere that the public (I) can access information about how such programs were decided upon? I'd love to see their evidence and read the conversations they had about it. On the one hand, it seems like that information should be available to the public as we're the ones footing the bills for Medicare, etc, but on the other hand, that's probably really naive...

Thanks!!
My opinion, take that for what it is worth, is that very little of the push toward value instead of volume is evidence based. There is some evidence that in my company that value based contracting can lower our costs. Most of the evidence I've heard is that it is worth 3-6% of premium costs. What it comes down to at the end of the day is convincing providers through contracting to accept less revenue when they think their revenue won't change. That is an extremely bitter and jaded view but that is how it works in practice.

The reason these programs get a lot of play is that they sound good in a press release. Wow, we can provide better outcomes and a lower cost! The reality is that providers aren't interested in decreasing their own revenue and payers don't really care about improving outcomes. I recently was working in the Medicaid space and helping out with some VBC things. Every deal that was acceptable to the providers that actually would improve care was going to cost more under the VBC arrangement. Providers are starting to wise up that risk is being shifted to them and they don't like it.
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  #4  
Old 07-06-2018, 02:48 PM
kooky cookie kooky cookie is offline
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Thanks, WhosOnFirst, for sharing your view. That makes me even more curious about what the conversation was that lead to the embrace of ideas like ACOs and PCMHs. "Well, we can make some cool sound bites, but this isn't going to lower spending or improve outcomes, but let's make everyone in the industry rework how they provide care, organize themselves and report to us, just because we can." Is that about right?
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  #5  
Old 07-09-2018, 08:03 AM
WhosOnFirst WhosOnFirst is offline
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Quote:
Originally Posted by kooky cookie View Post
Thanks, WhosOnFirst, for sharing your view. That makes me even more curious about what the conversation was that lead to the embrace of ideas like ACOs and PCMHs. "Well, we can make some cool sound bites, but this isn't going to lower spending or improve outcomes, but let's make everyone in the industry rework how they provide care, organize themselves and report to us, just because we can." Is that about right?
I'm not jaded enough to go quite that far. Insurers have been looking for ways to get out of paying for every itemized thing for quite some time. It makes predicting costs a lot easier if you pay a flat amount per episode of care rather than by each procedure and pill. With the better outcomes of certain high profile hospital systems like Mayo and Kaiser who treat patients using a methodology that fits in well with a payment structure that reimburses based upon the episode of care, the conditions were right for insurers to be able to transfer risk from themselves to providers. I really don't think that providers have recognized that yet so they are supporting the movement as the doctors see this as a way to not have insurers messing around with how they treat their patients.

Payment structure is really about trying to convince providers to take less money while having them think they will get paid the same or more. Once the providers realize that they've gotten the short end of the stick, they will adjust to regain their lost profit. My guess is that will come at the expense of patient care or outcomes through lower utilization of services. The real intent of the ACO models is to reduce the cost of care by eliminating waste and unneeded medical services. There is a fine line between needed and unneeded. Like with most things in health insurance, this is just a swing of the pendulum and we will likely see a return to fee for service in twenty years or so to incentivize providers to perform more procedures.
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  #6  
Old 07-10-2018, 11:39 AM
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ditkaworshipper ditkaworshipper is offline
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WhosOnFirst's take is very fair. I see a couple of other benefits from these programs that don't fit neatly into actuarial/financial analysis though:

1. Data Quality - These programs create an incentive to manage and code everything on the provider side. Not just at the EHR level for billing purposes, but since maximizing patient risk scores gets you more money, getting all of the patient information coded into the EMR correctly is worth money now. As a result, putting in good data systems has a more obvious financial benefit.
2. Price Transparency/Consistency - To DTNF's note on networks, this curbs a provider's incentive to game FFS; they know roughly how much they are really getting for each patient.
3. Patient Management - These programs are structured primarily on cost, but this is actually giving provider networks a set of patients that they "own," and the payer is providing the doctors with information they previously didn't have on procedures performed at providers outside their network. We can have a debate on the extent this is possible given attribution shifting like crazy at all times and the difference between EHR and EMR, but the amount of progress made on this pretty obvious.

Long term, there is a chance this cuts out some of the medical billing layer and general bureaucracy, basically. I'd also add in lowering error rates in the clinical setting from having better information to work with from the start.
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  #7  
Old 07-11-2018, 04:51 PM
kooky cookie kooky cookie is offline
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Are you saying that insurers had a significant role in the creation of ACOs and PCMHs? I have been under the impression that CMS promulgates whatever changes they want and the carriers have to adjust to them.
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Old 07-11-2018, 04:55 PM
kooky cookie kooky cookie is offline
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Are you saying that insurers had a significant role in the creation of ACOs and PCMHs? I have been under the impression that CMS promulgates whatever changes they want and the carriers have to adjust to them.

Or are you saying that CMS promulgates stuff, and insurers respond with changes to their contracts and networks so the changes don't hurt them as much, and that's why ACOs and PCMHs don't end up producing hoped-for results?
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  #9  
Old 07-12-2018, 09:32 AM
WhosOnFirst WhosOnFirst is offline
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Quote:
Originally Posted by kooky cookie View Post
Are you saying that insurers had a significant role in the creation of ACOs and PCMHs? I have been under the impression that CMS promulgates whatever changes they want and the carriers have to adjust to them.

Or are you saying that CMS promulgates stuff, and insurers respond with changes to their contracts and networks so the changes don't hurt them as much, and that's why ACOs and PCMHs don't end up producing hoped-for results?
I'm not certain what CMS changes you are referring to but I'm guessing this falls into the Medicare realm which is outside my area of expertise. In the Medicaid market, there has been a significant push in states over the last several years to have the managed care companies move towards a significant portion of their network contracts be ACO or PCMH. States are convinced that these types of managed care arrangements will save them money. In the commercial realm, there has also been a large shift toward ACO contracts. If Medicare is demanding more ACO contracting that definitely creates a large incentive for carriers to move in that direction which also causes a shift in commercial products. There was also some incentives built into the ACA that encouraged the use of ACOs and PCMHs. From the discussions I've had with our internal contracting folks, ACO contracts can reduce spend by 3-6%. So basically one year's worth of trend. While it might be misguided, I'm going to put my faith in the actuaries I've known for 20 years that are pretty good at their pricing estimates.

What I'm saying is CMS and state entities are highly influenced by politics and lobbying. The decisions these entities make are not always driven by facts and data. My opinion is that the move to ACOs is one of those changes that won't have the desired effect because people decided to make the change before they had any evidence of what the impact of the change would be. If you ever have the chance to sit in on a meeting with a provider group that is offering ACO services, take it. When it comes time to talk about the money, and it will happen very quickly, it is very clear that providers are trying to leverage these arrangements to increase revenue not decrease costs. From PMPM capitation fees for case management to shared savings, every potential decrease in revenue that will occur due to the elimination of "waste" is countered by an increase in revenue from these new payment arrangements. From the provider's standpoint, this can be even better because if they are able to negotiate a PMPM payment than they get paid way faster than if they had to submit the claims. At the end of the day, I don't think insurers really care what kind of contract they have with providers as long as their systems can administer it. If some new name on the contract will encourage governmental agencies to give them more money, the carriers will rename the contract.

In my mind, ACO and PCMH are very similar to the HMOs of the 80s. You have a PCP which acts as a gatekeeper. You provide incentives to the providers to reduce utilization. You have a narrow network of providers. The big difference is that the pure capitation is no longer present so providers are able to manipulate their revenue. As long as the ACOs can manipulate their revenue, the hoped for reduced costs will not appear. 3-6% is not some panacea that is bending the cost curve.
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  #10  
Old 07-14-2018, 02:21 PM
kooky cookie kooky cookie is offline
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Thank you!
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