Case Study on "Medicare: The Successful Backstory"

Case Study 10 pages (2651 words) Sources: 10

[EXCERPT] . . . .

Indeed, medical providers participating in a formal demonstration of best practices and reduced costs clearly showed that quality services and reduced costs can go hand-in-hand.

Physician group practice (PCP): an ACO prototype. In 2000, Congress tasked the Department of Health and Human Services (DHHS) with establishing an incentive-based payment methods for physicians. The purpose of the accountable care organization (ACO) Medicare physician group practice demonstration was to "encourage care coordination and investment in processes for more efficient service delivery and to reward physicians for improving health care outcomes" (Iglehart, 2011, p. 198). The physician group practice (PCP) was established by the Centers for Medicare and Medicaid Services (CMS) with the aim of addressing the following question: Could care management initiatives improve quality while generating cost savings through the reduction of "avoidable hospital admissions, readmissions, and emergency department visits" (Iglehart, 2011, p. 198)? The program commenced in 2005 with 10 large group practices operating all across the nation. The regular fee-for-service payments continued in place, but participating groups could also earn an 80% share of the savings to Medicare if they "collectively achieved specified quality and cost targets for the beneficiaries 'attributed' to their group" (Iglehart, 2011, p. 199)? These performance payments needed to generate more than 2% of the target savings for Medicare Parts A and B. In 2010, after four years of the PCP program being in operation, DHHS reported on the results. All 10 PCPs were found to achieve at least 29 of the 32 goals for quality, and five PCPs generated $38.7 million in Medicare savings -- which translated into $31.7 million in earned performance payments (Iglehart, 2011). The RTI research institute evaluated the model demonstration program for the CMS, and found multifactor attribution of successful savings by PCPs (Iglehart, 2011). Key drivers of the Medicare savings were reported as: Organizational structure, more detailed diagnostic coding, redesigned care processes, investments in care management, and changes in market conditions (Iglehart, 2011). One practitioner group alone earned more than half of the total performance payments, an accomplishment repeated from previous years: Marshfield Clinic in Wisconsin was eligible for $16.2 million in performance payments (Iglehart, 2011). Analysts are considering the replicability of the Marshfield Clinic efforts, noting that the director of the PCP activities had aggressively accelerated "multiple initiatives…including health information technology (point-of-care reminders, being completely chartless), care management programs, [and] education and feedback to providers regarding populations of patients with given conditions" (Iglehart, 2011, p. 199). Overall, savings from all the participating sites were associated with outpatient care and not inpatient care. This led RTI to hypothesize that it might not be possible for hospitals to "reduce avoidable admissions or use lower cost care substitutes without affecting their inpatient revenue" (Iglehart, 2011, p. 2000). Therefore, the presence of a hospital in the practice group was viewed as a deterrent to achieving care targets. Another substantial issue was the inability of the PCP participants to track beneficiaries who sought care elsewhere, as there was no lock-in capacity or enrollment process to signal changes in care providers. This meant that the when patients changed care providers, they were still associated with the original provider. The costs attributed to the patient remained with the provider, which made controlling care expenses difficult. Other issues with the ACO model include: 1) Determining if the strength of the incentives are sufficient to change physician behavior, 2) identifying beneficiaries perspectives about being assigned to an ACO that uses incentives to reduce costs and improve care quality -- and if this situation alters the ability of the beneficiaries to participate in their own care management; and, 3) establishing a system to inform practice groups in a timely manner about the care utilization of their patients.

The capitalization policies of health insurance companies left physicians distrustful of managed care, and the entry of the Patient Protection and Affordable Care Act on the healthcare scene underscored the fiscal threat physicians either feared or were experiencing. Moreover ACA provided a convenient scapegoat for physicians who felt insurance companies were aggressively and intrusively making decisions about care that were beyond their ethical reach. While a proportionately very small number of physicians have decided not to serve Medicare patients, and a somewhat higher number of physicians will not see Medicaid patients, by and large the system is effective for both patients and physicians.

Affordable Care Act Provisions

The Patient Protection and Affordable Care Act was designed to correct much of the spin-out caused by capitation payments and fee-for-service payments, but these aspects of the ACA are not typically covered by the media or understood by the general public. A number of these important provisions of ACA include: 1) Medicare bonus payments for primary care physicians and general surgeons are provided; 2) Medicaid primary care payments are increased; 3) geographic adjustments to Medicare physician payments in 42 states and territories are increased; 4) provides small business tax credits for employee health insurance for which many practices may be eligible; 5) streamlines claims processing requirements that increase administrative costs, and finally, 6) the Recovery Act created financial incentives for providers who adopt Electronic Health Records (EHRs). For instance, more than 176,049 providers were already registered for the Medicare & Medicaid EHR incentive programs and more than $2.5 billion was already paid out in incentive payments by 2012.

Conclusion

The research conducted by the Kaiser Foundation illuminated the need for critical research on local market issues, and for policy makers to take legislative action based on research evidence rather than a myopic desire to reduce government overall, increase privatization, and enhance corporate earnings. Indeed, the Kaiser Foundation synthesis of research clearly demonstrates that Medicare is working for beneficiaries and that physician participation is high. Furthermore, the ACO PCP demonstration project showed that medical groups with aggressive focus and intention can be highly profitable while providing quality services to Medicare patients. The myth that physicians and patients will suffer under the existing Medicare and ACA programs can no longer be promulgated. These factors do not discount the crucial need to respond to changing national demographics by drawing more responsive education policies for nurses, who will -- and must -- play an ever-increasing role in the provision of healthcare to all of the nation's citizenry, not just its Medicare and Medicaid beneficiaries.

References

Aiken, L.H. (2011, January 20). Nurses for the future. The New England Journal of Medicine, 364(3), 195-198.

Boccuti, C. And Neuman, T. (2013, December 10). Medicare patients' access to physicians: A synthesis of the evidence. The Henry J. Kaiser Family Foundation.

Fairman, J.A., Rowe, J.W., Hassmiller, S., and Shalala, D. (2011, January 20). Broadening the scope of nursing practice. The New England Journal of Medicine, 364(3), 193-195.

Galewitz, P. (2012, August 6). Study: Nearly a third… READ MORE

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