Changes in health care spending and quality 4 years into global payment

Determinants of success in Shared Savings Programs: An analysis of ACO and market characteristics

BACKGROUND

Medicare's Accountable Care Organization (ACO) programs introduced shared savings to traditional Medicare, which allow providers who reduce health care costs for their patients to retain a percentage of the savings they generate.

OBJECTIVE

To examine ACO and market factors associated with superior financial performance in Medicare ACO programs.

METHODS

We obtained financial performance data from the Centers for Medicare and Medicaid Services (CMS); we derived market-level characteristics from Medicare claims; and we collected ACO characteristics from the National Survey of ACOs for 215 ACOs. We examined the association between ACO financial performance and ACO provider composition, leadership structure, beneficiary characteristics, risk bearing experience, quality and process improvement capabilities, physician performance management, market competition, CMS-assigned financial benchmark, and ACO contract start date. We examined two outcomes from Medicare ACOs' first performance year: savings per Medicare beneficiary and earning shared savings payments (a dichotomous variable).

RESULTS

When modeling the ACO ability to save and earn shared savings payments, we estimated positive regression coefficients for a greater proportion of primary care providers in the ACO, more practicing physicians on the governing board, physician leadership, active engagement in reducing hospital re-admissions, a greater proportion of disabled Medicare beneficiaries assigned to the ACO, financial incentives offered to physicians, a larger financial benchmark, and greater ACO market penetration. No characteristic of organizational structure was significantly associated with both outcomes of savings per beneficiary and likelihood of achieving shared savings. ACO prior experience with risk-bearing contracts was positively correlated with savings and significantly increased the likelihood of receiving shared savings payments.

CONCLUSIONS

In the first year, performance is quite heterogeneous, yet organizational structure does not consistently predict performance. Organizations with large financial benchmarks at baseline have greater opportunities to achieve savings. Findings on prior risk bearing suggest that ACOs learn over time under risk-bearing contracts.

IMPLICATIONS

Given the lack of predictive power for organizational characteristics, CMS should continue to encourage diversity in organizational structures for ACO participants, and provide alternative funding and risk bearing mechanisms to continue to allow a diverse group of organizations to participate.

LEVEL OF EVIDENCE

III.

Analysis of Healthcare Cost and Utilization in the First Two Years of the Medicare Shared Savings Program Using Big Data from the CMS Enclave

The Medicare Shared Savings Program (MSSP) is the larger of the first two Accountable Care Organization (ACO) programs by the Centers for Medicare and Medicaid Services (CMS). In this study we assessed healthcare cost and utilization of 1.71 million Medicare beneficiaries assigned to the 333 MSSP ACOs in the calendar years of 2013 and 2014, in comparison to years 2010 and 2011, using the official CMS data. We employed doubly robust estimation (propensity score weighting followed by generalized linear regression) to adjust the analyses to beneficiary personal traits, history of chronic conditions, previous healthcare utilization, ACO administrative region, and ZIP code socioeconomic factors. In comparison to the care delivered to the control cohort of 17.7 million non-ACO beneficiaries, we found that the care patterns for ACO beneficiaries shifted away from some costly types of care, but at the expense of increased utilization of other types, increased imaging and testing expenditures, and increased medication use, with overall net greater increase in cost instead of smaller increase.

The Early Impact Of The 'Alternative Quality Contract' On Mental Health Service Use And Spending In Massachusetts

Accountable care using global payment with performance bonuses has shown promise in controlling spending growth and improving care. This study examined how an early model, the Alternative Quality Contract (AQC) established in 2009 by Blue Cross Blue Shield of Massachusetts (BCBSMA), has affected care for mental illness. We compared spending and use for enrollees in AQC organizations that did and did not accept financial risk for mental health with enrollees not participating in the contract. Compared with BCBSMA enrollees in organizations not participating in the AQC, we found that enrollees in participating organizations were slightly less likely to use mental health services and, among mental health services users, small declines were detected in total health care spending, but no change was found in mental health spending. The declines in probability of use of mental health services and in total health spending among mental health service users attributable to the AQC were concentrated among enrollees in organizations that accepted financial risk for behavioral health. Interviews with AQC organization leaders suggested that the contractual arrangements did not meaningfully affect mental health care delivery in the program's initial years, but organizations are now at varying stages of efforts to improve mental health integration.

Value-Based Approaches for Emergency Care in a New Era

Although emergency departments (EDs) play an integral role in the delivery of acute unscheduled care, they have not been fully integrated into broader health care reform efforts. Communication and coordination with the ambulatory environment remain limited, leaving ED care disconnected from patients' longitudinal care. In a value-based environment focused on improving quality, decreasing costs, enhancing population health, and improving the patient experience, this oversight represents a missed opportunity for emergency care. When integrated with primary and subspecialty care, emergency care might meet the needs of patients, providers, and payers more efficiently than yet realized. This article uses the Merit-Based Incentive Payment System from the Medicare Access and CHIP Reauthorization Act as a framework to outline a strategy for improving the value of emergency care, including integrating quality and resource use measures across health care delivery settings and populations, encouraging care coordination from the ED, and implementing robust health information exchange systems.

Introducing Value-Based Purchasing into TRICARE Reform

TRICARE, the health benefits program created for beneficiaries of the U.S. Department of Defense, covers health care provided in military treatment facilities and by civilian providers. Congress is now considering how to update TRICARE, which was first developed in the 1980s drawing on managed care concepts from civilian health plans. This article places TRICARE's current managed care strategy in historical context and describes recent innovations by private insurers and Medicare intended to enhance the value---cost and quality---of the care they purchase for their members. With this movement toward value-based purchasing as background, the authors evaluate two existing proposals for reform and describe an alternative approach that blends the existing proposals.

Effects of accountable care and payment reform on substance use disorder treatment: evidence from the initial 3 years of the alternative quality contract

BACKGROUND AND AIMS

Global payment and accountable care reform efforts in the United States may connect more individuals with substance use disorders (SUD) to treatment. We tested whether such changes instituted under an Alternative Quality Contract (AQC) model within the Blue Cross Blue Shield of Massachusetts' (BCBSMA) insurer increased care for individuals with SUD.

DESIGN

Difference-in-differences design comparing enrollees in AQC organizations with a comparison group of enrollees in organizations not participating in the AQC.

SETTING

Massachusetts, USA.

PARTICIPANTS

BCBSMA enrollees aged 13-64 years from 2006 to 2011 (3 years prior to and after implementation) representing 1 333 534 enrollees and 42 801 SUD service users.

MEASUREMENTS

Outcomes were SUD service use and spending and SUD performance metrics. Primary exposures were enrollment into an AQC provider organization and whether the AQC organization did or did not face risk for behavioral health costs.

FINDINGS

Enrollees in AQC organizations facing behavioral health risk experienced no change in the probability of using SUD services (1.64 versus 1.66%; P = 0.63), SUD spending ($2807 versus $2700; P = 0.34) or total spending ($12 631 versus $12 849; P = 0.53), or SUD performance metrics (identification: 1.73 versus 1.76%, P = 0.57; initiation: 27.86 versus 27.02%, P = 0.50; engagement: 11.19 versus 10.97%, P = 0.79). Enrollees in AQC organizations not at risk for behavioral health spending experienced a small increase in the probability of using SUD services (1.83 versus 1.66%; P = 0.003) and the identification performance metric (1.92 versus 1.76%; P = 0.007) and a reduction in SUD medication use (11.84 versus 14.03%; P = 0.03) and the initiation performance metric (23.76 versus 27.02%; P = 0.005).

CONCLUSIONS

A global payment and accountable care model introduced in Massachusetts, USA (in which a health insurer provided care providers with fixed prepayments to cover most or all of their patients' care during a specified time-period, incentivizing providers to keep their patients healthy and reduce costs) did not lead to sizable changes in substance use disorder service use during the first 3 years following its implementation.

Impact of Provider Incentives on Quality and Value of Health Care

The use of financial incentives to improve quality in health care has become widespread. Yet evidence on the effectiveness of incentives suggests that they have generally had limited impact on the value of care and have not led to better patient outcomes. Lessons from social psychology and behavioral economics indicate that incentive programs in health care have not been effectively designed to achieve their intended impact. In the United States, Medicare's Hospital Readmission Reduction Program and Hospital Value-Based Purchasing Program, created under the Affordable Care Act (ACA), provide evidence on how variations in the design of incentive programs correspond with differences in effect. As financial incentives continue to be used as a tool to increase the value and quality of health care, improving the design of programs will be crucial to ensure their success.

Reflections on the 20th anniversary of Taiwan's single-payer National Health Insurance System

On its twentieth anniversary, Taiwan's National Health Insurance (NHI) stands out as a high-performing single-payer national health insurance system that provides universal health coverage to Taiwan's 23.4 million residents based on egalitarian ethical principles. The system has encountered myriad challenges over the years, including serious financial deficits. Taiwan's government managed those crises through successive policy adjustments and reforms. Taiwan's NHI continues to enjoy high public satisfaction and delivers affordable modern health care to all Taiwanese without the waiting times in single-payer systems such as those in England and Canada. It faces challenges, including balancing the system's budget, improving the quality of health care, and achieving greater cost-effectiveness. However, Taiwan's experience with the NHI shows that a single-payer approach can work and control health care costs effectively. There are lessons for the United States in how to expand coverage rapidly, manage incremental adjustments to the health system, and achieve freedom of choice.

Financial Incentives to Encourage Value-Based Health Care

This article reviews the literature on the use of financial incentives to improve the provision of value-based health care. Eighty studies of 44 schemes from 10 countries were reviewed. The proportion of positive and statistically significant outcomes was close to .5. Stronger study designs were associated with a lower proportion of positive effects. There were no differences between studies conducted in the United States compared with other countries; between schemes that targeted hospitals or primary care; or between schemes combining pay for performance with rewards for reducing costs, relative to pay for performance schemes alone. Paying for performance improvement is less likely to be effective. Allowing payments to be used for specific purposes, such as quality improvement, had a higher likelihood of a positive effect, compared with using funding for physician income. Finally, the size of incentive payments relative to revenue was not associated with the proportion of positive outcomes.

Global budget payment system helps to reduce outpatient medical expenditure of hypertension in China

BACKGROUND

As healthcare spending continues to increase, medical insurance is now under great pressure of growing economic burden. To control the excessive growth of medical expenditure, change of medical payment system was clearly put forward in China's new healthcare reform. With this end, Tianjin, a large city in North China, is now exploring to replace traditional fee-for-service (FFS) with global budget payment system (GBPS), and actual effects of GBPS needs to be assessed.

METHODS

Data of this study is from the 2013 National Health Services Utilization Survey among patients of Urban Basic Medical Insurance in China, containing 102,492 outpatient visits of 21,925 hypertensive patients to Tianjin's primary hospitals in 2013. t test was used to compare the difference between continuous variables. A linear regression analysis was also done to identify possible risk factors of medical expenditure.

RESULTS

On the basis of expenditure per capital, GBPS, compared with FFS, has significantly reduced total medical expense (CNY 640.28 vs. CNY 700.64, p < 0.001), medical insurance (MI) fund expense (CNY 491.87 vs. CNY 532.37, p < 0.001) and out-of-pocket (OOP) expense (CNY 148.42 vs. CNY 168.27, p < 0.001). Results of generalized linear regression also show that younger people, female and GBPS independently predict less total medical expense, MI fund expense and OOP expense.

CONCLUSIONS

Compared with FFS, GBPS can help reduce total medical expense, MI fund expense and OOP expense significantly. This study offers evidence for wider implementation of GBPS in China.

Performing Economic Evaluation of Integrated Care: Highway to Hell or Stairway to Heaven?

Health economists are increasingly interested in integrated care in order to support decision-makers to find cost-effective solutions able to tackle the threat that chronic diseases pose on population health and health and social care budgets. However, economic evaluation in integrated care is still in its early years, facing several difficulties. The aim of this paper is to describe the unique nature of integrated care as a topic for economic evaluation, explore the obstacles to perform economic evaluation, discuss methods and techniques that can be used to address them, and set the basis to develop a research agenda for health economics in integrated care. The paper joins the voices that call health economists to pay more attention to integrated care and argues that there should be no more time wasted for doing it.

Effects of Global Payment and Accountable Care on Tobacco Cessation Service Use: An Observational Study

BACKGROUND

Tobacco use is the leading cause of preventable death and disability. New payment and delivery system models including global payment and accountable care have the potential to increase use of cost-effective tobacco cessation services.

OBJECTIVE

To examine how the Alternative Quality Contract (AQC) established in 2009 by Blue Cross Blue Shield of Massachusetts (BCBSMA) has affected tobacco cessation service use.

DESIGN

We used 2006-2011 BCBSMA claims and enrollment data to compare adults 18-64 years in AQC provider organizations to adults in non-AQC provider organizations. We examined the AQC's effects on all enrollees; a subset at high risk of tobacco-related complications due to certain medical conditions; and behavioral health service users.

MAIN MEASURES

We examined use of: (1) any cessation treatment (pharmacotherapy or counseling); (2) varenicline or bupropion; (3) nicotine replacement therapies (NRTs); (4) cessation counseling; and (4) combination therapy (pharmacotherapy plus counseling). We also examined duration of pharmacotherapy use and number of counseling visits among users.

KEY RESULTS

Rates of tobacco cessation treatment use were higher following implementation of the AQC relative to the comparison group overall (2.02 vs. 1.87 %, p < 0.0001), among enrollees at risk for tobacco-related complications (4.97 vs. 4.66 %, p < 0.0001), and among behavioral health service users (3.67 vs. 3.25 %, p < 0.0001). Statistically significant increases were found for use of varenicline or bupropion alone, counseling alone, and combination therapy, but not for NRT use, pharmacotherapy duration, or number of counseling visits among users.

CONCLUSIONS

In its initial three years, the AQC was associated with increases in use of tobacco cessation services.

Independent practice associations: Advantages and disadvantages of an alternative form of physician practice organization

BACKGROUND

Value-based purchasing (VBP) favors provider organizations large enough to accept financial risk and develop care management infrastructure. Independent Practice Associations (IPAs) are a potential alternative for physicians to becoming employed by a hospital or large medical group. But little is known about IPAs.

METHODS

We selected four IPAs that vary in location, structure, and strategy, and conducted interviews with their president and medical director, as well as with a hospital executive and health plan executive familiar with that IPA.

RESULTS

The IPAs studied vary in size and sophistication, but overall are performing well and are highly regarded by hospital and health plan executives. IPAs can grow rapidly without the cost of purchasing and operating physician practices and make it possible for physicians to remain independent in their own practices while providing the scale and care management infrastructure to make it possible to succeed in VBP. However, it can be difficult for IPAs to gain cooperation from hundreds to thousands of independent physicians, and the need for capital for growth and care management infrastructure is increasing as VBP becomes more prevalent and more demanding.

CONCLUSIONS

Some IPAs are succeeding at VBP. As VBP raises the performance bar, IPAs will have to demonstrate that they can achieve results equal to more highly capitalized and tightly structured large medical groups and hospital-owned practices.

IMPLICATIONS

Physicians should be aware of IPAs as a potential option for participating in VBP. Payers are aware of IPAs; the Medicare ACO program and health insurer ACO programs include many IPAs.

Opportunities and Challenges for Payment Reform: Observations from Massachusetts

Policy makers and private health plans are expanding their efforts to implement new payment models that will encourage providers to improve quality and deliver health care more efficiently. Over the past five years, payment reforms have progressed faster in Massachusetts than in any other state. The reasons include a major effort by Blue Cross Blue Shield of Massachusetts to implement global payment, the presence of large integrated systems willing to take on financial risk, and a supportive state policy environment. By 2014, thirty-seven percent of Massachusetts's residents enrolled in health plans were covered under risk-based payment models tied to global budgets. But the expansion of payment reform in Massachusetts slowed between 2012 and 2015 because some commercial enrollment shifted from risk-based health maintenance organization products to fee-for-service preferred provider organization (PPO) plans, and the state Medicaid program fell short of its payment reform goals. Provider groups will not fully commit to population-based clinical models if they believe it will result in large reductions in fee-for-service revenue. The use of alternative payment models will accelerate in 2016 when Blue Cross begins implementing PPO payment reforms, but it is unknown how quickly other payers will follow. Massachusetts's experience illustrates the complexity of payment reform in pluralistic health care markets and the need for complementary efforts by public and private stakeholders.

Association Between Medicare Accountable Care Organization Implementation and Spending Among Clinically Vulnerable Beneficiaries

IMPORTANCE

Accountable care contracts hold physician groups financially responsible for the quality and cost of health care delivered to patients. Focusing on clinically vulnerable patients, those with serious conditions who are responsible for the greatest proportion of spending, may result in the largest effects on both patient outcomes and financial rewards for participating physician groups.

OBJECTIVE

To estimate the effect of Medicare accountable care organization (ACO) contracts on spending and high-cost institutional use for all Medicare beneficiaries and for clinically vulnerable beneficiaries.

DESIGN, SETTING, AND PARTICIPANTS

For this cohort study, 2 study populations were defined: the overall Medicare population and the clinically vulnerable subgroup of Medicare beneficiaries. The overall Medicare population was based on a random 40% sample drawn from continuously enrolled fee-for-service beneficiaries with at least 1 evaluation and management visit in a calendar year. The clinically vulnerable study population included all Medicare beneficiaries 66 years or older who had at least 3 Hierarchical Condition Categories (HCCs). Beneficiaries entered the cohort during the quarter between January 2009 to December 2011 when they first had at least 3 HCCs and remained in the cohort until death. Cohort entry was restricted to the preperiod to account for potential changes in coding practices after ACO implementation. Difference-in-difference estimations were used to compare changes in health care outcomes for Medicare beneficiaries attributed to physicians in ACOs with those attributed to non-ACO physicians from January 2009 to December 2013.

EXPOSURES

Medicare ACOs beginning contracts in January 2012, April 2012, July 2012, and January 2013 through the Pioneer and Medicare Shared Savings Programs.

MAIN OUTCOMES AND MEASURES

Total spending per beneficiary-quarter, spending categories, use of hospitals and emergency departments, ambulatory care sensitive admissions, and 30-day readmissions.

RESULTS

Total spending decreased by $34 (95% CI, -$52 to -$15) per beneficiary-quarter after ACO contract implementation across the overall Medicare population (n = 15 592 600) and decreased $114 in clinically vulnerable patients (n = 8 673 823) (95% CI, -$178 to -$50). In the overall Medicare cohort, hospitalizations and emergency department visits decreased by 1.3 and 3.0 events per 1000 beneficiaries per quarter, respectively (95% CIs: -2.1 to -0.4 and -4.8 to -1.3), and hospitalizations and emergency department visits decreased in the clinically vulnerable cohort by 2.9 and 4.1 events per 1000 beneficiaries per quarter, respectively (95% CIs: -5.2 to -0.7 and -7.1 to -1.2). Changes in total spending associated with ACOs did not vary by clinical condition of beneficiaries.

CONCLUSIONS AND RELEVANCE

Medicare ACO programs are associated with modest reductions in spending and use of hospitals and emergency departments. Savings were realized through reductions in use of institutional settings in clinically vulnerable patients.

Survival and Toxicity After Cisplatin Plus Etoposide Versus Carboplatin Plus Etoposide for Extensive-Stage Small-Cell Lung Cancer in Elderly Patients

PURPOSE

Elderly patients with cancer are under-represented in clinical trials and risk greater toxicity from chemotherapy. These patients and their physicians need better evidence to decide among guideline-recommended regimens. We test whether patients with extensive-stage small-cell lung cancer (ES SCLC) have noninferior survival and less hospital-based health care after carboplatin/etoposide compared with cisplatin/etoposide.

METHODS

We analyzed SEER-Medicare data for beneficiaries with ES SCLC diagnosed at age 67 years and older between 1995 and 2009. Among patients treated with first-line chemotherapy in the ambulatory setting, 831 received cisplatin/etoposide and 2,846 received carboplatin/etoposide. Propensity score matching (2:1 ratio) yielded 778 cisplatin/etoposide and 1,502 carboplatin/etoposide patients.

RESULTS

Survival was nearly identical in the two groups: 35.7 weeks for cisplatin/etoposide and 35.9 weeks for carboplatin/etoposide. The hazard ratio of 1 (95% CI, 0.91 to 1.09) excluded our prespecified threshold, indicating noninferiority. Mortality at 6 months was indistinguishable: 35% for cisplatin/etoposide and 34% for carboplatin/etoposide. After carboplatin/etoposide, patients were less likely to be admitted to a hospital (80% v 86%, P < .001) and had fewer hospitalizations (median 1 v 2, odds ratio 0.76, 95% CI, 0.65 to 0.9), ED visits (median 1 v 2, odds ratio 0.82, 95% CI, 0.7 to 0.96), and ICU stays (median 0 v 0, odds ratio 0.82, 95% CI, 0.69 to 0.99).

CONCLUSION

First-line carboplatin/etoposide is associated with similar survival and less subsequent hospital-based health care use than cisplatin/etoposide among elderly patients with ES SCLC treated in ambulatory settings.

Preventive Care Quality of Medicare Accountable Care Organizations: Associations of Organizational Characteristics With Performance

BACKGROUND

Accountable Care Organizations (ACOs) are a delivery and payment model aiming to coordinate care, control costs, and improve quality. Medicare ACOs are responsible for 8 measures of preventive care quality.

OBJECTIVES

To create composite measures of preventive care quality and examine associations of ACO characteristics with performance.

DESIGN

This is a cross-sectional study of Medicare Shared Savings Program and Pioneer participants. We linked quality performance to descriptive data from the National Survey of ACOs. We created composite measures using exploratory factor analysis, and used regression to assess associations with organizational characteristics.

RESULTS

Of 252 eligible ACOs, 246 reported on preventive care quality, 177 of which completed the survey (response rate=72%). In their first year, ACOs lagged behind PPO performance on the majority of comparable measures. We identified 2 underlying factors among 8 measures and created composites for each: disease prevention, driven by vaccines and cancer screenings, and wellness screening, driven by annual health screenings. Participation in the Advanced Payment Model, having fewer specialists, and having more Medicare ACO beneficiaries per primary care provider were associated with significantly better performance on both composites. Better performance on disease prevention was also associated with inclusion of a hospital, greater electronic health record capabilities, a larger primary care workforce, and fewer minority beneficiaries.

CONCLUSIONS

ACO preventive care quality performance is related to provider composition and benefitted by upfront investment. Vaccine and cancer screening quality performance is more dependent on organizational structure and characteristics than performance on annual wellness screenings, likely due to greater complexity in eligibility determination and service administration.

Early Performance of Accountable Care Organizations in Medicare

BACKGROUND

In the Medicare Shared Savings Program (MSSP), accountable care organizations (ACOs) have financial incentives to lower spending and improve quality. We used quasi-experimental methods to assess the early performance of MSSP ACOs.

METHODS

Using Medicare claims from 2009 through 2013 and a difference-in-differences design, we compared changes in spending and in performance on quality measures from before the start of ACO contracts to after the start of the contracts between beneficiaries served by the 220 ACOs entering the MSSP in mid-2012 (2012 ACO cohort) or January 2013 (2013 ACO cohort) and those served by non-ACO providers (control group), with adjustment for geographic area and beneficiary characteristics. We analyzed the 2012 and 2013 ACO cohorts separately because entry time could reflect the capacity of an ACO to achieve savings. We compared ACO savings according to organizational structure, baseline spending, and concurrent ACO contracting with commercial insurers.

RESULTS

Adjusted Medicare spending and spending trends were similar in the ACO cohorts and the control group during the precontract period. In 2013, the differential change (i.e., the between-group difference in the change from the precontract period) in total adjusted annual spending was -$144 per beneficiary in the 2012 ACO cohort as compared with the control group (P=0.02), consistent with a 1.4% savings, but only -$3 per beneficiary in the 2013 ACO cohort as compared with the control group (P=0.96). Estimated savings were consistently greater in independent primary care groups than in hospital-integrated groups among 2012 and 2013 MSSP entrants (P=0.005 for interaction). MSSP contracts were associated with improved performance on some quality measures and unchanged performance on others.

CONCLUSIONS

The first full year of MSSP contracts was associated with early reductions in Medicare spending among 2012 entrants but not among 2013 entrants. Savings were greater in independent primary care groups than in hospital-integrated groups.

Population Health: A New Paradigm for Medicine

Healthcare delivery system reform has become a dominant topic of conversation throughout the United States. Driven in part by ever-higher national expenditures on health, an increasing number of payers and provider organizations are working to reduce the costs and improve the quality of healthcare. In this article, we demystify the term "Population Health," review some of the larger payer initiatives currently in effect and discuss specific provider group efforts to improve the quality and cost of healthcare for patients.

Uncomfortable realities: the challenge of creating real change in Europe's consolidating hospital sector

BACKGROUND

This article examines uncomfortable realities that the European hospital sector currently faces and the potential impact of wide-spread rationalization policies such as (hospital) payment reform and privatization.

METHODS

Review of relevant international literature.

RESULTS

Based on the evidence we present, rationalization policies such as (hospital) payment reform and privatization will probably fall short in delivering better quality of care and lower growth in health expenses. Reasons can be sought in a mix of evidence on the effectiveness of these rationalization policies. Nevertheless, pressures for different business models will gradually continue to increase and it seems safe to assume that more value-added process business and facilitated network models will eventually emerge.

CONCLUSIONS

The overall argument of this article holds important implications for future research: how can policymakers generate adequate leverage to introduce such changes without destroying necessary hospital capacity and the ability to produce quality healthcare.

Early Discharge Planning and Improved Care Transitions: Pre-Admission Assessment for Readmission Risk in an Elective Orthopedic and Cardiovascular Surgical Population

BACKGROUND/METHODS

Readmission prevention is a marker of patient care quality and requires comprehensive, early discharge planning for safe hospital transitions. Effectively performed, this process supports patient satisfaction, efficient resource utilization, and care integration. This study developed/tested the utility of a predictive early discharge risk assessment with 366 elective orthopedic/cardiovascular surgery patients. Quality improvement cycles were undertaken for the design and to inform analytic plan. An 8-item questionnaire, which includes patient self-reported health, was integrated into care managers' telephonic pre-admission assessments during a 12-month period.

RESULTS

Regression models found the questionnaire to be predictive of readmission (p ≤ .005; R(2) = .334) and length-of-stay (p ≤ .001; R(2) = .314). Independent variables of "lives-alone" and "self-rated health" were statistically significant for increased readmission odds, as was "self-rated health" for increased length-of-stay. Quality measures, patient experience and increased rates of discharges-to-home further supported the benefit of embedding these questions into the pro-active planning process.

CONCLUSION

The pilot discharge risk assessment was predictive of readmission risk and length-of-stay for elective orthopedic/cardiovascular patients. Given the usability of the questionnaire in advance of elective admissions, it can facilitate pro-active discharge planning essential for producing quality outcomes and addressing new reimbursement methodologies for continuum-based episodes of care.

Which Triple Aim related measures are being used to evaluate population management initiatives? An international comparative analysis

INTRODUCTION

Population management (PM) initiatives are introduced in order to create sustainable health care systems. These initiatives should focus on the continuum of health and well-being of a population by introducing interventions that integrate various services. To be successful they should pursue the Triple Aim, i.e. simultaneously improve population health and quality of care while reducing costs per capita. This study explores how PM initiatives measure the Triple Aim in practice.

METHOD

An exploratory search was combined with expert consultations to identify relevant PM initiatives. These were analyzed based on general characteristics, utilized measures and related selection criteria.

RESULTS

In total 865 measures were used by 20 PM initiatives. All quality of care domains were included by at least 11 PM initiatives, while most domains of population health and costs were included by less than 7 PM initiatives. Although their goals showed substantial overlap, the measures applied showed few similarities between PM initiatives and were predominantly selected based on local priority areas and data availability.

CONCLUSION

Most PM initiatives do not measure the full scope of the Triple Aim. Additionally, variety between measures limits comparability between PM initiatives. Consensus on the coverage of Triple Aim domains and a set of standardized measures could further both the inclusion of the various domains as well as the comparability between PM initiatives.

Medical Malpractice: Reform for Today's Patients and Clinicians

The current system of medical malpractice does a poor job of serving the best interests of physicians or patients. Economic and societal forces are shifting the nature of health care from the individual physician to a system of health care professionals, characterized by accountable care organizations. In particular, more physicians are employed, quality and outcomes are routinely measured, and reimbursement is moving to value-based purchasing. Medical malpractice likewise needs to transition to a new model that is consistent with the modern era of patient-centered care. Collective accountability, the concept that patient care is the responsibility of all the members of the health care organization, requires malpractice reform that reflects a systems-based practice of medicine. Enterprise liability, coupled with medical error communication and resolution programs, provides the legal framework necessary for the patient-centered practice of medicine in today's environment.

No hospital left behind? Education policy lessons for value-based payment in healthcare

Value-based payment systems have been widely implemented in healthcare in an effort to improve the quality of care. However, these programs have not broadly improved quality, and some evidence suggests that they may increase inequities in care. No Child Left Behind is a parallel effort in education to address uneven achievement and inequalities. Yet, by penalizing the lowest performers, No Child Left Behind's approach to accountability has led to a number of unintended consequences. This article draws lessons from education policy, arguing that financial incentives should be designed to support the lowest performers to improve quality.

Adaptation of Cost Analysis Studies in Practice Guidelines

Clinical guidelines play a central role in day-to-day practice. We assessed the degree of incorporation of cost analyses to guidelines and identified modifiable characteristics that could affect the level of incorporation.We selected the 100 most cited guidelines listed on the National Guideline Clearinghouse (http://www.guideline.gov) and determined the number of guidelines that used cost analyses in their reasoning and the overall percentage of incorporation of relevant cost analyses available in PubMed. Differences between medical specialties were also studied. Then, we performed a case-control study using incorporated and not incorporated cost analyses after 1:1 matching by study subject and compared them by the Consolidated Health Economic Evaluation Reporting Standards (CHEERS) statement requirements and other criteria.We found that 57% of guidelines do not use any cost justification. Guidelines incorporate a weighted average of 6.0% (95% confidence interval [CI] 4.3-7.9) among 3396 available cost analyses, with cardiology and infectious diseases guidelines incorporating 10.8% (95% CI 5.3-18.1) and 9.9% (95% CI 3.9- 18.2), respectively, and hematology/oncology and urology guidelines incorporating 4.5% (95% CI 1.6-8.6) and 1.6% (95% CI 0.4-3.5), respectively. Based on the CHEERS requirements, the mean number of items reported by the 148 incorporated cost analyses was 18.6 (SD = 3.7), a small but significant difference over controls (17.8 items; P = 0.02). Included analyses were also more likely to directly relate cost reductions to healthcare outcomes (92.6% vs 81.1%, P = 0.004) and declare the funding source (72.3% vs 53.4%, P < 0.001), while similar number of cases and controls reported a noncommercial funding source (71% vs 72.7%; P = 0.8).Guidelines remain an underused mechanism for the cost-effective allocation of available resources and a minority of practice guidelines incorporates cost analyses utilizing only 6% of the available cost analyses. Fulfilling the CHEERS requirements, directly relating costs with healthcare outcomes and transparently declaring the funding source seem to be valued by guideline-writing committees.

The Theory of Value-Based Payment Incentives and Their Application to Health Care

Objectives

To present the implications of agency theory in microeconomics, augmented by behavioral economics, for different methods of value‐based payment in health care; and to derive a set of future research questions and policy recommendations based on that conceptual analysis.

Data Sources

Original literature of agency theory, and secondarily behavioral economics, combined with applied research and empirical evidence on the application of those principles to value‐based payment.

Study Design

Conceptual analysis and targeted review of theoretical research and empirical literature relevant to value‐based payment in health care.

Principal Findings

Agency theory and secondarily behavioral economics have powerful implications for design of value‐based payment in health care. To achieve improved value—better patient experience, clinical quality, health outcomes, and lower costs of care—high‐powered incentives should directly target improved care processes, enhanced patient experience, and create achievable benchmarks for improved outcomes. Differing forms of value‐based payment (e.g., shared savings and risk, reference pricing, capitation, and bundled payment), coupled with adjunct incentives for quality and efficiency, can be tailored to different market conditions and organizational settings.

Conclusions

Payment contracts that are “incentive compatible”—which directly encourage better care and reduced cost, mitigate gaming, and selectively induce clinically efficient providers to participate—will focus differentially on evidence‐based care processes, will right‐size and structure incentives to avoid crowd‐out of providers’ intrinsic motivation, and will align patient incentives with value. Future research should address the details of putting these and related principles into practice; further, by deploying these insights in payment design, policy makers will improve health care value for patients and purchasers.

Changes in Low-Value Services in Year 1 of the Medicare Pioneer Accountable Care Organization Program

IMPORTANCE

Wasteful practices are widespread in the US health care system. It is unclear if payment models intended to improve health care efficiency, such as the Medicare accountable care organization (ACO) programs, discourage the provision of low-value services.

OBJECTIVE

To assess whether the first year of the Medicare Pioneer ACO program was associated with a reduction in use of low-value services.

DESIGN, SETTING, AND PARTICIPANTS

In a difference-in-differences analysis, we compared use of low-value services between Medicare fee-for-service beneficiaries attributed to health care provider groups that entered the Pioneer program (ACO group) and beneficiaries attributed to other health care providers (control group) before (2009-2011) vs after (2012) Pioneer ACO contracts began. Data analysis was conducted from December 1, 2014, to June 27, 2015. Comparisons were adjusted for beneficiaries' sociodemographic and clinical characteristics as well as for geography. We decomposed estimates according to service characteristics (clinical category, price, and sensitivity to patient preferences) and compared estimates between subgroups of ACOs with higher vs lower baseline use of low-value services.

MAIN OUTCOMES AND MEASURES

Use of, and spending on, 31 services in instances that provide minimal clinical benefit, measured as annual service counts per 100 beneficiaries and price-standardized annual service spending per 100 beneficiaries.

RESULTS

During the precontract period, trends in the use of low-value services were similar for the ACO and control groups. The first year of ACO contracts was associated with a differential reduction (95% CI) of 0.8 low-value services per 100 beneficiaries for the ACO group (-1.2 to -0.4; P < .001), corresponding to a 1.9% differential reduction in service quantity (-2.9% to -0.9%) and a 4.5% differential reduction in spending on low-value services (-7.5% to -1.4%; P = .004). Differential reductions were similar for services less sensitive vs more sensitive to patient preferences and for higher- vs lower-priced services. The ACOs with higher than their markets' mean baseline levels of low-value service use experienced greater service reductions (-1.2 services per 100 beneficiaries; -1.7 to -0.7; P < .001) than did ACOs with use below the mean (-0.2 services per 100 beneficiaries, -0.6 to -0.2; P = .41; P = .003 for test of difference between subgroups).

CONCLUSIONS AND RELEVANCE

During its first year, the Pioneer ACO program was associated with modest reductions in low-value services, with greater reductions for organizations providing more low-value care. Accountable care organization-like risk contracts may be able to discourage use of low-value services even without specifying services to target.

Medicare Chronic Care Management Payments and Financial Returns to Primary Care Practices: A Modeling Study

BACKGROUND

Physicians have traditionally been reimbursed for face-to-face visits. A new non-visit-based payment for chronic care management (CCM) of Medicare patients took effect in January 2015.

OBJECTIVE

To estimate financial implications of CCM payment for primary care practices.

DESIGN

Microsimulation model incorporating national data on primary care use, staffing, expenditures, and reimbursements.

DATA SOURCES

National Ambulatory Medical Care Survey and other published sources.

TARGET POPULATION

Medicare patients.

TIME HORIZON

10 years.

PERSPECTIVE

Practice-level.

INTERVENTION

Comparison of CCM delivery approaches by staff and physicians.

OUTCOME MEASURES

Net revenue per full-time equivalent (FTE) physician; time spent delivering CCM services.

RESULTS OF BASE-CASE ANALYSIS

If nonphysician staff were to deliver CCM services, net revenue to practices would increase despite opportunity and staffing costs. Practices could expect approximately $332 per enrolled patient per year (95% CI, $234 to $429) if CCM services were delivered by registered nurses (RNs), approximately $372 (CI, $276 to $468) if services were delivered by licensed practical nurses, and approximately $385 (CI, $286 to $485) if services were delivered by medical assistants. For a typical practice, this equates to more than $75 ,00 of net annual revenue per FTE physician and 12 hours of nursing service time per week if 50% of eligible patients enroll. At a minimum, 131 Medicare patients (CI, 115 to 140 patients) must enroll for practices to recoup the salary and overhead costs of hiring a full-time RN to provide CCM services.

RESULTS OF SENSITIVITY ANALYSIS

If physicians were to deliver all CCM services, approximately 25% of practices nationwide could expect net revenue losses due to opportunity costs of face-to-face visit time.

LIMITATION

The CCM program may alter long-term primary care use, which is difficult to predict.

CONCLUSION

Practices that rely on nonphysician team members to deliver CCM services will probably experience substantial net revenue gains but must enroll a sufficient number of eligible patients to recoup costs.

PRIMARY FUNDING SOURCE

None.

Accountable Care Organizations: The National Landscape

There are now more than seven hundred accountable care organizations (ACOs) in the United States. This article describes some of their most salient characteristics including the number and types of contracts involved, organizational structures, the scope of services offered, care management capabilities, and the development of a three-category taxonomy that can be used to target technical assistance efforts and to examine performance. The current evidence on the performance of ACOs is reviewed. Since California has the largest number of ACOs (N=67) and a history of providing care under risk-bearing contracts, some additional assessments of quality and patient experience are made between California ACOs and non-ACO provider organizations. Six key issues likely to affect future ACO growth and development are discussed, and some potential "diagnostic" indicators for assessing the likelihood of potential antitrust violations are presented.

Review of Medicare, Medicaid, and Commercial Quality of Care Measures: Considerations for Assessing Accountable Care Organizations

Accountable care organizations (ACOs) have proliferated under the Affordable Care Act (ACA). If ACOs are to improve health care quality and lower costs, quality measures will be increasingly important in determining if provider consolidations associated with the development of ACOs are achieving their intended purpose. This article assesses quality measurement across public and private sectors. We reviewed available quality measures for a subset of programs in six organizations and assessed the number and domain of measures (structure, process, outcomes, and patient experience). Two-thirds of all quality measures were categorized as process measures. Outcome measures made up nearly 20 percent of measures. Patient experience and structure measures made up approximately 8 percent and 7 percent, respectively. We propose further improvements to quality measurement initiatives. For example, programs that reward providers should consider reward size and distribution within the organization. Quality improvement initiatives should consider what encourages provider buy-in and participation and the effects on populations with disproportionate health care needs. As the focus of quality initiatives may change from year to year, measures should be periodically revisited to ensure continued improvement and sustainability. Finally, we suggest quality measures that regulators could use prior to ACO formation or in the year or two following formation.

Cost-Benefit Analysis of an Otolaryngology Emergency Room Using a Contingent Valuation Approach

OBJECTIVES

Dedicated otolaryngology emergency rooms (ERs) provide a unique mechanism of health care delivery. Relative costs and willingness to pay (WTP) for these services have not been studied. This study aims to provide a cost-benefit analysis of otolaryngology-specific ER care.

STUDY DESIGN

Cost-benefit analysis based on contingent valuation surveys.

SETTING

An otolaryngology-specific ER in a tertiary care academic medical center.

SUBJECTS AND METHODS

Adult English-speaking patients presenting to an otolaryngology ER were included. WTP questions were used to assess patient valuations of specialty emergency care. Sociodemographic data, income, and self-reported levels of distress were assessed. State-level and institution-specific historical cost data were merged with WTP data within a cost-benefit analysis framework.

RESULTS

The response rate was 75.6%, and 199 patients were included in the final analysis. Average WTP for otolaryngology ER services was $319 greater than for a general ER (95% CI: $261 to $377), with a median value of $200. The historical mean cost per visit at a general ER was $575, and mean cost at the specialty ER was $551 (95% CI: $529 to $574). Subtracting incremental cost from incremental WTP yielded a net benefit of $343.

CONCLUSION

Dedicated otolaryngology ER services are valued by patients for acute otolaryngologic problems and have a net benefit of $343 per patient visit. They appear to be a cost-beneficial method for addressing acute otolaryngologic conditions. This study has implications for ER-based otolaryngologic care and direct-to-specialist services.

Solving the Sustainable Growth Rate formula conundrum continues steps toward cost savings and care improvements

Congress is again attempting to repeal the Sustainable Growth Rate (SGR) formula. The formula is a failed mechanism intended to constrain Medicare Part B physician spending by adjusting annual physician fee updates. Congress has averted formula-driven physician fee cuts each year beginning in 2003 by overriding the SGR, usually accompanied with last-minute disputes about how these overrides should be paid for. Last year Congress achieved bipartisan and bicameral agreement on legislation to replace the SGR—the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, which we refer to as the "2014 SGR fix"—but was unable to find a way to pay for the legislation under current budget rules. Current congressional deliberations appear focused on how to pay for the fix, with wide consensus that the 2014 legislation should remain the basic model for reform. We describe key features of the 2014 SGR fix, place it in the context of both past and ongoing Medicare health policy, assess its strengths and weaknesses as a mechanism to foster improved care and lower costs in Medicare, and suggest further actions to ensure success in meeting these goals.