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The MassHealth P4P program was implemented in 2008. The program began with a P4P incentive for pneumonia treatment and a pay-for-reporting incentive for surgical infection prevention. In 2009, hospitals were eligible for P4P payments for both measures. Nevertheless, the effect of the MassHealth on P4P was practically non-existent. What happened? Today we review an article by Ryan and Blumstein (2011) to find out.
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An excerpt from Monocle Magazine‘s February Issue, p. 58 in which I am quoted:
“Syracuse is a healthcare hub. A state teaching hospital and a non-profit community hospital, two of the city’s four largest employers, for a stable base of high-paying jobs in hard times. But having a hospital as a leading employer can often be a bad sign: the local community is overwhelmed by an ageing population.
The US healthcare overhaul will change the terrain for cities such as Syracuse, which are likely to see their hospitals forced to consolidate, economise or languish under the new rules. Community hospitals have struggled financially for years, providing a safety net for millions of uninsured patients who could not afford care. Hospital revenue will increase when more Americans receive insurance coverage from public exchanges from 2014. The trade-off is that the payment system now rewards hospitals that produce better results at lower costs.
To do more with less, hospitals have to cut their bureaucracies and better coordinate and streamline care.
Even if hospitals manage to trim costs, it will be cold comfort to the local economy. ”It’s not like a community hospital is going to become the Google of local healthcare,” says healthcare economist Jason Shafrin of research firm Acumen. A solid reputation for good healthcare is a nice perk for a city to have but not a big draw for business. Cities such as Syracuse have to revive other parts of their economy rather than wait for hospitals to save them.”
Source: The Curse of Care: A local economy too reliant upon the healthcare business. Monocle, February 2010, Issue 40, p. 58.
Logue: They’re idiots.
Prince: They’ve all been knighted.
Logue: Makes it official then.
Where do we spend our health care dollars? A paper by Conway et al. in Health Services Research examines this question using data from the Medical Expenditure Panel Survey (MEPS) from 2007. Typically, statistics break down health expenditures by payer (e.g., Medicare, Medicaid, private insurance) or setting (e.g., inpatient, outpatient, nursing home). “However, this is not how patients experience care. Patients have a chronic disease, pregnancy, trauma, or some other life event.”
Instead, Conway and co-authors use a “patient-centered” hierarchy to organize health care costs. The chart below gives a breakdown of costs into Conway’s 7 patient-centered categories.
It is clear that chronic conditions make up the greatest share of health spending. This finding is especially true for older individuals. In fact, fifty one percent of health spending for Americans aged 45-64 goes to treat chronic conditions and for seniors 65 and older, this figure rises to 56 percent.
Source:
Pay-for-performance schemes have been attracting much attention of late. A RWJF policy paper from 2007 provides a nice overview of various P4P design considerations. Below, I summarize some of the key findings of this article.
One example where P4P was implemented was the Premier Hospital Quality Incentive Demonstration (HQID). A paper by Lindenauer et al. (2007) review the demonstration. 613 hospitals participated in the demonstration over a two-year paper. These hospitals were judged on 33 quality measures for five clinical conditions: heart failure,acute myocardial infarction, community-acquiredpneumonia, coronary-artery bypass grafting, andhip and knee replacement. Ten of these measures were already being used for public reporting on the Hospital Compare website.
To be eligible for payment, hospitals needed to have a minimum of 30 cases per condition annually. ”For each of the clinical conditions, hospitals performing in the top decile on a composite measure of quality for a given year received a 2% bonus payment in addition to the usual Medicare reimbursement rate. Hospitals in the second decile received a 1% bonus. Bonuses averaged $71,960 per year and ranged from $914 to $847,227. These additional payments are anticipated to be partially offset by financial penalties ranging from 1 to 2% of Medicare payments for hospitals that by the end of the third year of the program had failed to exceed the performance of hospitals in the lowest two deciles, as established during the program’s first year.”
The paper by Lindenauer and co-authors examines whether public reporting or public reporting plus payment really makes the difference. As any economist would suspect, payment matters. The authors found the following results:
“Baseline performance was inversely associated with improvement; inpay-for-performance hospitals, the improvement in the composite of all 10 measureswas 16.1% for hospitals in the lowest quintile of baseline performance and 1.9% forthose in the highest quintile (P<0.001). After adjustments were made for differencesin baseline performance and other hospital characteristics, pay for performance wasassociated with improvements ranging from 2.6 to 4.1% over the 2-year period.”
Sources:
In Swaziland, a nationwide campaign is under way to circumcise 160,000 males by the end of this year. Not 160,000 male babies, 160,000 adult males. In a country with less than 1.5 million people, this is a huge undertaking.
Why would the government of Swaziland promote adult circumcision so strongly? Here’s the answer:
“…a randomized controlled trial in South Africa (later confirmed by studies in Uganda and Kenya) found that circumcised men are as much as 60 percent less likely to contract HIV through heterosexual sex. Scientists do not yet know exactly why, but the study was so convincing that it was stopped after 18 months, because preventing the uncircumcised control group from getting the procedure would have been unethical.”
“Currently, 20 percent of Swaziland’s population are HIV positive…Nearly half of women ages 25 to 29 and men 35 to 39 are infected.” Thus, circumcision is seen as a way to reduce the spread of HIV.
However, could circumcision actually increase the prevalence of HIV in the country? This may be the case if moral hazard strikes.
Moral hazard would occur if young Swazi males now overestimate their protection against HIV and these men become more promiscuous. In fact, after circumcision “Some of the men have the misconception that they’ll be 100 percent safe.” Fortunately, NGOs are providing counseling before and after the procedure to educate the Swazi men on the post-circumcision risk and the need to use condoms. For the sake of their future, let’s home the young men listen.
Tags: Moral Hazard
All patients with end stage renal disease (ESRD) are eligible for Medicare regardless of their age. In 1972, the Social Security Act extended all Medicare Part A and Part B benefits to individuals with ESRD (of any age) who are entitled to receive Social Security benefits. ESRD beneficiaries now account for 1% of Medicare enrollment. This post review the types of services ESRD Medicare beneficiaries receive and how Medicare pays providers for these services. Today, however, I will review Medicare efforts to improve the quality of care ESRD beneficiaries receive. You can find an overview of the ESRD Quality Improvement Program (QIP) here.
Where are we now? Medicare will begin paying dialysis providers through a PPS beginning in 2011. This will give providers an incentive to provider services more cost effectively, but also potentially will give them an incentive to decrease the quality of care. To ensure that ESRD beneficiaries receive the same quality of services under PPS as under a FFS, Medicare developed the QIP. Below, I review the QIP in more detail.
The QIP requires Medicare to establish an ESRD quality program using the following steps:
Medicare has already chose quality measures for the initial year. Data from the following three measures will be submitted to CMS via ESRD claims.
The numbers in parentheses represent the national performance rates for all dialysis providers and facilities based on 2008 data from the Dialysis Compare website. Providers receive a score between 0-10 based on their performance on each measure. Medicare has recently proposed a scoring method which subtracts 2 points for every 1 percentage point the provider falls below the initial performance standard (e.g., if the initial performance standard for a particular provider or facility for the Hemoglobin>12 g/dL is set as the 2008 national average rate (26%), then if that provider/facility had 28% of Medicare patients with hemoglobin levels>12 g/dL during 2010, the provider/facility would receive 6 points for its performance on the measure as 28% is 2 percentage points below the performance standard). The provider’s total score could be weighted evenly across all three scores. Alternatively, some have proposed weighting the Hemoglobin <10.0 g/dL at 50% of the score and the other two quality measures at 25% of the provider’s score to put more weight on avoiding low hemoglobin levels.
Payment will be based on the provider’s score. THe proposed payment reduction scale is as follows:
In the future, Medicare will consider expanding the QIP program to include additional measures. Quality measures considered include: Kt/V, vascular access rates, bone and mineral metabolism, and access infection rates.
Source:
John Holahan has a nice RWJ issue brief summarizing how health reform will affect the federal budget. This spreadsheet I made has a summary of the CBO projections. The CBO claims that over the next 10 years, expansions to Medicaid and CHIP and the subsidies for the health insurance exchange will increase the deficit by about half a trillion each. Medicare cost cutting, however, should save a little over $0.5 trillion and increase revenues should also save $0.4 trillion. Thus, the CBO claims that the net effect of health reform will be a net decrease in national debt.
Although Holohan claims that the Medicaid projections seem reasonable, he rightfully has some doubts as to whether the Medicare cuts will come about. “”
“Another uncertainty is that the law has assumed that the cuts in Medicare payments to hospitals, hospices, nursing homes, and home health agencies, with payment increases below the rate of inflation, can be sustained. The assumption is that there will be ongoing ―productivity improvements in the delivery of health care that will then be returned to the taxpayer. To the extent that providers are successful at lobbying for legislation that reduces cuts of this magnitude, the savings will be reduced and the deficit will be higher than projected.”
I think it is very doubtful that CMS will be able to sustain these cuts to Medicare. The sustainable growth rate (SGR) was also supposed to slow the growth of physician compensation over time. Every year, however, Congress overturns the SGR and physician compensation does not decrease. Thus, the Medicare cuts are likely optimistic. Further, if the cost of health insurance rises faster than expected, than subsidies plans in the health insurance exchange may also have to rise.
Overall, I am very doubtful that health reform will reduce the deficit, regardless of the CBO figures.
The U.S. medical system does a good job of vaccinating children. The CDC has a list of recommended vaccinations which most children receive during routine physician visits. As children grow into adolescents, however, they are less likely to visit their primary care provider regularly. As a handful of new vaccines are targeted at teens (e.g., vaccines against meningococcal meningitis), the CDC is trying to target to teens using in-school vaccinations.
Reactions to this policy depends on whether you believe these vaccines provide more health benefits than risks (which I and most researchers do) or if you believe the risks of illness outweighs the health benefits.
Below are two headlines describing the same pilot in-school vaccination program in Denver.
Today I’ll be talking about healthcare in Australia. Australia a rich country with 21.2 million residents, has the sixth highest life expectancy of any country in the world. The review of the Australian healthcare system is based on the Australia’s Health 2008 report. Unless otherwise noted, all dollar figures reference are in Australian dollars ($1 USD=1.10 AUD)
Health Spending
“Almost 70% of total health expenditure in Australia is funded by government, with the Australian Government contributing two-thirds of this and state, territory and local
governments the other third. The Australian Government’s major contributions include the two national subsidy schemes, Medicare and the Pharmaceutical Benefits Scheme (PBS). Medicare subsidises payments for services provided by doctors and optometrists and other allied health professionals such as clinical psychologists, and the PBS subsidises payments
for a high proportion of prescription medications bought from pharmacies (individuals contribute out-of-pocket payments for these services as well). The Australian Government and state and territory governments also jointly fund public hospital services.”
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