Spending to save--ACOs and the Medicare Shared Savings Program

Dutch shared savings program targeted at primary care: Reduced expenditures in its first year

In countries where GPs fulfill a central role in the health care system, like in the Netherlands, the lack of value-based incentives in GP payment systems may have negative consequences for value delivered in other parts of the health care spectrum. We evaluate an experiment in which GPs were allowed to share in savings in total health care expenditures, conditionally on achieving quality targets. At least in theory, these so-called 'shared savings contracts' incentivize GPs to become critical gatekeepers, coordinate the provision of care and substitute for specialist services when appropriate. This study evaluates a Dutch shared savings program targeted at GPs. This study employs a difference-in-differences design using a regional control group of non-participating GPs. We find that program participation led to savings in health care expenditures (-2%), while patient satisfaction was unaffected and while the results for other quality indicators were ambiguous. Additional analyses show that savings have been predominantly realized by lowering the volume of specialist care, and that almost every participating GP displayed cost-saving behavior. This finding suggests that shared savings contracts, even when added as a mere complemented to existing volume-based payment models, already elicit substantive effort to increase the value of health care provided.

A Review of Chemotherapy and Radiotherapy Near the End of Life in Individuals with Metastatic Non-small Cell Lung Cancer

Objectives

Appropriate chemotherapy and radiation near end of life is a moving target; challenged by increasing costs, evolving therapies, new reimbursement models and quality metrics. We review treatment trends and variables impacting the initiation of chemotherapy (CHT) and radiotherapy (XRT) in the final 60, 30 and 14 days of life in metastatic non-small cell lung cancer (NSCLC).

Methods

The Florida Cancer Data System was studied to complete a retrospective cohort analysis of 48,858 individuals with Stage IV (M1) NSCLC from 1995–2010. We evaluated the initiation of CHT and XRT after diagnosis and associations with patient demographics, insurance and socioeconomic status (SES).

Results

The use of CHT increased from 35% to 49%, while XRT decreased from 52% to 37% between 1995 and 2010. Initial courses of CHT occurred 8.1%, 5.0%, and 3.6% in the final 60, 30, and 14 days of life, and XRT 13.8%, 7.7%, and 5.2% of the time, respectively. Younger, married, and male patients were more likely to receive treatment. Low SES (OR 0.685, 95% CI 0.633–0.741) and uninsured individuals (OR 0.678, 95% CI 0.572–0.804) were less likely to receive CHT. SES and insurance did not impact XRT.

Conclusions

The initiation of late CHT and XRT treatments decreased from 1995–2010. It persisted above 3% in the last 14 days of life. Clinicians may struggle to taper treatment before death, especially in patients with limited survival. It is important to recognize the complexities of death and dying and the potential influences of palliative care in affecting treatment decisions.

White Paper: Corporatization in Radiology

Consolidation in health care has been widely recognized as having significant impact in the United States. A related trend is the corporatization of medical professional practices by companies in capital markets. Several medical subspecialties have been identified as attractive corporatization candidates, including radiology. The purpose of the white paper is to present information about the trend of corporatization in radiology. The real, recognized, and potential influences of capital investors in radiology need to be acknowledged as evolving and important considerations. Many radiologists and practices have already realized significant change as a result of corporatization. Corporatization presents significant practical, financial, ethical, and moral implications for those in and related to radiology.

Academic physicians' views on low-value services and the choosing wisely campaign: A qualitative study

BACKGROUND

In 2012, the American Board of Internal Medicine (ABIM) Foundation launched a campaign called Choosing Wisely which was intended to start a national dialogue on services that are not medically necessary. More research is needed on the in-depth reasons why doctors overuse low-value services, their views on Choosing Wisely specifically, and ways to help them change their practice patterns.

METHODS

We performed a qualitative study of focus groups with physicians to explore their views on the problem of overuse of low-value services, the reasons why they overuse, and ways that they think could be effective at curbing overuse. Participants were attendings in the fields of emergency medicine, internal medicine, hospital medicine, and cardiology.

RESULTS

All physicians felt that overuse of low-value services was a significant problem. Physicians frequently cited that patient expectations drove the use of low-value services and lack of time was the most cited reason why behavior change was difficult. Facilitators that could promote behavior change included decision support through the electronic medical record, motivation to maintain their reputation among their colleagues, internal motivation to be a good doctor, objective data showing their rates of overuse, alignment of institutional goals, and forums to discuss evidence and new research.

CONCLUSIONS AND IMPLICATIONS

In focus groups with physicians, we found that physicians perceived that overuse of low-value services was a problem. Participants cited many barriers to behavior change. Methods that help address patient expectations, physician time, and social norms may help physicians reduce their use of low-value services.

Reliability of hospital cost profiles in inpatient surgery

BACKGROUND

With increased policy emphasis on shifting risk from payers to providers through mechanisms such as bundled payments and accountable care organizations, hospitals are increasingly in need of metrics to understand their costs relative to peers. However, it is unclear whether Medicare payments for surgery can reliably compare hospital costs.

METHODS

We used national Medicare data to assess patients undergoing colectomy, pancreatectomy, and open incisional hernia repair from 2009 to 2010 (n = 339,882 patients). We first calculated risk-adjusted hospital total episode payments for each procedure. We then used hierarchical modeling techniques to estimate the reliability of total episode payments for each procedure and explored the impact of hospital caseload on payment reliability. Finally, we quantified the number of hospitals meeting published reliability benchmarks.

RESULTS

Mean risk-adjusted total episode payments ranged from $13,262 (standard deviation [SD] $14,523) for incisional hernia repair to $25,055 (SD $22,549) for pancreatectomy. The reliability of hospital episode payments varied widely across procedures and depended on sample size. For example, mean episode payment reliability for colectomy (mean caseload, 157) was 0.80 (SD 0.18), whereas for pancreatectomy (mean caseload, 13) the mean reliability was 0.45 (SD 0.27). Many hospitals met published reliability benchmarks for each procedure. For example, 90% of hospitals met reliability benchmarks for colectomy, 40% for pancreatectomy, and 66% for incisional hernia repair.

CONCLUSION

Episode payments for inpatient surgery are a reliable measure of hospital costs for commonly performed procedures, but are less reliable for lower volume operations. These findings suggest that hospital cost profiles based on Medicare claims data may be used to benchmark efficiency, especially for more common procedures.

Contracting for integrated health and social care: a critical review of four models

Purpose

– Service transformation of health and social care is currently requiring commissioners to assess the suitability of their contracting mechanisms to ensure goodness of fit with the integration agenda. The purpose of this paper is to provide a description and critical account of four models of contracting, namely Accountable Care Organisations, the Alliance Model, the Lead Provider/Prime Contractor Model, and Outcomes-based Commissioning and Contracting.

Design/methodology/approach

– The approach taken to the literature review was narrative and the results were organised under an analytical framework consisting of six themes: definition and purpose; characteristics; application; benefits/success factors; use of incentives; and critique.

Findings

– The review highlighted that while the models have relevance, there are a number of uncertainties regarding their direct applicability and utility for the health and social care agenda, and limited evidence of effectiveness.

Research limitations/implications

– Due to the relative newness of the models and their emerging application, much of the commentary was limited to a narrow range of contributors and a broader discussion is needed. It is clear that further research is required to determine the most effective approach for integrated care contracting. It is suggested that instead of looking at individual models and assessing their transferable worth, there may be a place for examining principles that underpin the models to reshape current contracting processes.

Practical implications

– What appears to be happening in practice is an organic development. With the growing number of examples emerging in health and social care, these may act as “trailblazers” and support further development.

Originality/value

– There is emerging debate surrounding the best way to contract for health and social care services, but no literature review to date that takes these current models and examines their value in such critical detail. Given the pursuit for “answers” by commissioners, this review will raise awareness and provide knowledge for decision making.

Patient sharing and quality of care: measuring outcomes of care coordination using claims data

BACKGROUND

With the goal of improving clinical efficiency and effectiveness, programs to enhance care coordination are a major focus of health care reform.

OBJECTIVE

To examine whether "care density"--a claims-based measure of patient sharing by office-based physicians--is associated with measures of quality. Care density is a proxy measure that may reflect how frequently a patient's doctors collaborate.

RESEARCH DESIGN

Cohort study using administrative databases from 3 large commercial insurance plans.

SUBJECTS

A total of 1.7 million adult patients; 31,675 with congestive heart failure, 78,530 with chronic obstructive pulmonary disease, and 240,378 with diabetes.

MEASURES

Care density was assessed in 2008. Prevention Quality Indicators (PQIs), 30-day readmissions, and Healthcare Effectiveness Data and Information Set quality indicators were measured in the following year.

RESULTS

Among all patients, we found that patients with the highest care density density--indicating high levels of patient sharing among their office-based physicians--had significantly lower rates of adverse events measured as PQIs compared with patients with low-care density (odds ratio=0.88; 95% confidence interval, 0.85-0.92). A significant association between care density and PQIs was also observed for patients with diabetes mellitus but not congestive heart failure or chronic obstructive pulmonary disease. Diabetic patients with higher care density scores had significantly lower odds of 30-day readmissions (odds ratio=0.68, 95% confidence interval, 0.48-0.97). Significant associations were observed between care density and Healthcare Effectiveness Data and Information Set measures although not always in the expected direction.

CONCLUSION

In some settings, patients whose doctors share more patients had lower odds of adverse events and 30-day readmissions.

Ethical challenges for accountable care organizations: a structured review

BACKGROUND

Accountable care organizations (ACOs) are proliferating as a solution to the cost crisis in American health care, and already involve as many as 31 million patients. ACOs hold clinicians, group practices, and in many circumstances hospitals financially accountable for reducing expenditures and improving their patients' health outcomes. The structure of health care affects the ethical issues arising in the practice of medicine; therefore, like all health care organizational structures, ACOs will experience ethical challenges. No framework exists to assist key ACO stakeholders in identifying or managing these challenges.

METHODS

We conducted a structured review of the medical ACO literature using qualitative content analysis to inform identification of ethical challenges for ACOs.

RESULTS

Our analysis found infrequent discussion of ethics as an explicit concern for ACOs. Nonetheless, we identified nine critical ethical challenges, often described in other terms, for ACO stakeholders. Leaders could face challenges regarding fair resource allocation (e.g., about fairly using ACOs' shared savings), protection of professionals' ethical obligations (especially related to the design of financial incentives), and development of fair decision processes (e.g., ensuring that beneficiary representatives on the ACO board truly represent the ACO's patients). Clinicians could perceive threats to their professional autonomy (e.g., through cost control measures), a sense of dual or conflicted responsibility to their patients and the ACO, or competition with other clinicians. For patients, critical ethical challenges will include protecting their autonomy, ensuring privacy and confidentiality, and effectively engaging them with the ACO.

DISCUSSION

ACOs are not inherently more or less "ethical" than other health care payment models, such as fee-for-service or pure capitation. ACOs' nascent development and flexibility in design, however, present a time-sensitive opportunity to ensure their ethical operation, promote their success, and refine their design and implementation by identifying, managing, and conducting research into the ethical issues they might face.

Attributing patients to accountable care organizations: performance year approach aligns stakeholders' interests

The accountable care organization (ACO) model of health care delivery is rapidly being implemented under government and private-sector initiatives. The model requires that each ACO have a defined patient population for which the ACO will be held accountable for both total cost of care and quality performance. However, there is no empirical evidence about the best way to define how patients are assigned to these groups of doctors, hospitals, and other health care providers. We examined the two major methods of defining, or attributing, patient populations to ACOs: the prospective method and the performance year method. The prospective method uses data from one year to assign patients to an ACO for the following performance year. The performance year method assigns patients to an ACO at the end of the performance year based on the population served during the performance year. We used Medicare fee-for-service claims data from 2008 and 2009 to simulate a set of ACOs to compare the two methods. Although both methods have benefits and drawbacks, we found that attributing patients using the performance year method yielded greater overlap of attributed patients and patients treated during the performance year and resulted in a higher proportion of care concentrated within an accountable care organization. Together, these results suggest that performance year attribution may more fully and accurately reflect an ACO's patient population and may better position an ACO to achieve shared savings.

The PGP demonstrations: were they sufficient to justify accountable care organizations?

The Physician Group Practice (PGP) Demonstration Project was designed to try to establish whether high-quality healthcare can be delivered to Medicare patients, while simultaneously lowering overall Medicare costs. In this project, participating healthcare organizations were provided a portion of any savings achieved, provided that certain quality goals were also achieved. The results of this project were used to provide evidence as to the feasibility of Accountable Care Organizations (ACOs), a healthcare delivery approach, which is rapidly becoming more prevalent. While the quality measures achieved by the vast majority of participants in the PGP Demonstration Project were widespread, the financial performance of these organizations was quite mixed. Many participating organizations received no shared savings whatsoever, while one received more "shared savings" payment that the others combined. Problems with the evidence supporting PGPs' cost savings are discussed, and, based on these concerns, the future success of ACOs is questioned.

The business of interventional pulmonology

Interventional pulmonologists are regularly asked to perform more complicated and advanced procedures, but reimbursement for the time, effort and skill involved in these procedures has not kept up with other procedural specialties. Further changes in funding and reimbursement are likely under the Affordable Care Act. Understanding and effectively using the current system of funding for interventional pulmonology practices are imperative as we adapt to changing medical needs, legislative mandates, and reimbursement policy. This article reviews the current landscape of insurance and reimbursement in health care and anticipates some changes that might be expected from implementation of the Affordable Care Act.

Risk-adjusted payment and performance assessment for primary care

BACKGROUND

Many wish to change incentives for primary care practices through bundled population-based payments and substantial performance feedback and bonus payments. Recognizing patient differences in costs and outcomes is crucial, but customized risk adjustment for such purposes is underdeveloped.

RESEARCH DESIGN

Using MarketScan's claims-based data on 17.4 million commercially insured lives, we modeled bundled payment to support expected primary care activity levels (PCAL) and 9 patient outcomes for performance assessment. We evaluated models using 457,000 people assigned to 436 primary care physician panels, and among 13,000 people in a distinct multipayer medical home implementation with commercially insured, Medicare, and Medicaid patients.

METHODS

Each outcome is separately predicted from age, sex, and diagnoses. We define the PCAL outcome as a subset of all costs that proxies the bundled payment needed for comprehensive primary care. Other expected outcomes are used to establish targets against which actual performance can be fairly judged. We evaluate model performance using R(2)'s at patient and practice levels, and within policy-relevant subgroups.

RESULTS

The PCAL model explains 67% of variation in its outcome, performing well across diverse patient ages, payers, plan types, and provider specialties; it explains 72% of practice-level variation. In 9 performance measures, the outcome-specific models explain 17%-86% of variation at the practice level, often substantially outperforming a generic score like the one used for full capitation payments in Medicare: for example, with grouped R(2)'s of 47% versus 5% for predicting "prescriptions for antibiotics of concern."

CONCLUSIONS

Existing data can support the risk-adjusted bundled payment calculations and performance assessments needed to encourage desired transformations in primary care.

Statistical uncertainty in the Medicare shared savings program

OBJECTIVE

Analyze statistical risks facing CMS and Accountable Care Organizations (ACOs) under the Medicare Shared Savings Program (MSSP).

METHODS

We calculate the probability that shared savings formulas lead to inappropriate payment, payment denial, and/or financial penalties, assuming that ACOs generate real savings in Medicare spending ranging from 0-10%. We also calculate expected payments from CMS to ACOs under these scenarios.

RESULTS

The probability of an incorrect outcome is heavily dependent on ACO enrollment size. For example, in the MSSP two-sided model, an ACO with 5,000 enrollees that keeps spending constant faces a 0.24 probability of being inappropriately rewarded for savings and a 0.26 probability of paying an undeserved penalty for increased spending. For an ACO with 50,000 enrollees, both of these probabilities of incorrect outcomes are equal to 0.02. The probability of inappropriate payment denial declines as real ACO savings increase. Still, for ACOs with 5,000 patients, the probability of denial is at least 0.15 even when true savings are 5-7%. Depending on ACO size and the real ACO savings rate, expected ACO payments vary from $115,000 to $35.3 million.

DISCUSSION

Our analysis indicates there may be greater statistical uncertainty in the MSSP than previously recognized. CMS and ACOs will have to consider this uncertainty in their financial, administrative, and care management planning. We also suggest analytic strategies that can be used to refine ACO payment formulas in the longer term to ensure that the MSSP (and other ACO initiatives that will be influenced by it) work as efficiently as possible.

Health care reform: 2012 update

The recent landmark health care reform legislation seeks to expand health insurance coverage, change incentives, and improve the quality and flow of information. This article reviews the elements of health care reform most relevant to clinical gastroenterology, discusses the ongoing challenges that health care reform legislation faces, and considers the potential implications for clinical practice.

The AJT Report News and issues that affect organ and tissue transplantation

Do accountable care organizations make sense for transplantation? This month, "The AJT Report" investigates how this element of healthcare reform may impact transplant patient care and clinical practice. Also this month, we look at new legislation that hopes to expand immunosuppressant drug coverage, and report on findings of a new study focused on risk factors for pediatric heart disease.