REFORM: MedPAC Says Sustainability and Quality Mean New Approaches

MedPAC's big June report is out, and it's full of big June ideas. Really big ideas. The panel, which advises Congress on Medicare policy, outlines (not all for the first time, but more emphatically and comprehensively) a lot of ideas for changing a lot more than technical fixes to fee scales and payment rates. MedPAC is ready for the whole enchilada (or whatever the geriatric equivalent would be. Chicken dumplings?) in reshaping the system so that it is both higher quality and more cost-effective. The nonpartisan panel of experts wrote:

Fundamental changes are needed in health care delivery in the United States and in Medicare. ... Recent studies show that the U.S. health care system is not buying enough of the recommended care, is buying too much unnecessary care, and is paying prices that are very high, resulting in a system that costs significantly more per capita than in any other country.

Medicare does more than take care of the elderly and disabled. It sets patterns and models for much of the U.S. medical system, affecting how hospitals function and doctors practice. It also costs a lot. The commissioners stated further:

Without change, the Medicare program is fiscally unsustainable over the long term. Moderating projected spending trends requires fundamental reforms in payment and delivery systems to improve quality, coordinate care, and reduce cost growth.

In the coming days, we'll delve more deeply into aspects of the report. But here are five points that struck us as particularly integral to getting away from a system that has evolved so that it too often rewards the quantity of care, rather than the quality.

1) Comparative effectiveness. MedPAC last year urged Congress to create an independent entity to figure out which drugs, procedures, devices, surgeries, etc. work best, and which don't work so well—or at all. MedPAC goes into more detail this year on the pros and cons of various models, but it stresses that that oversight should be independent and funding should be broad-based, "from federal and private sources because the research findings will benefit all users—patients, providers, private health plans, and federal health programs."

2) Medical home pilot project. A medical home coordinates a patient's care, including prevention and chronic disease management. It is centered around primary care doctors, but specialists can be part of it— notably, endocrinologists for diabetes. It's accessible when the patient needs it (not just 9:00 to 5:00, or else head to the nearest emergency room). Payments would be based on how well overall care is managed, not just how many services or procedures a patient gets. Requirements for the pilot program include using health information technology for clinical decision making, as well as up-to-date records of advanced directives.

3) Bundling and readmissions. We hear a lot of talk about shocking medical errors, but we pay less attention to all the things that can go wrong when patients transition from one setting to another, ie. a frail elderly person who has been severely ill in the hospital returning home, or transitioning between a nursing home and a hospital. One step MedPAC recommends (and it would be phased in during several years after hospitals are given the necessary data and feedback) is reducing what Medicare pays to hospitals with high readmission rates for certain conditions. Another is to "bundle" payments. That is going to require a lot of experimentation to get right, but the idea is instead of paying the hospital one chunk of money for inpatient care, and then paying for a lot of other doctors and tests and procedures in and out of the hospital related to the same illness, there would be one comprehensive payment (pilot projects and experimentation will be necessary to determine exactly how that will be divvied up).

4) More primary care. As MedPAC notes, raising payments for primary care won't address all the reasons (including lifestyle and status) that young docs choose high-paying, high-volume specialties instead of internal medicine, family medicine, geriatrics, and the like. But money can help. MedPAC also looks at how to draw on the cost-effective primary care expertise of advanced practice nurses and physicians assistants.

5 ) Disclosure. Hardly a day goes by (see this recent Boston Globe story about a Harvard psychiatrist) when we don't hear of another doctor or research team that was getting more money than we realized from a drug or device manufacturer. MedPAC wants more disclosure and public reporting. (Hmm. Do you think they can figure out a way of getting them to donate those payments to finance comparative effectiveness??? ) MedPAC outlines several mechanisms for greater transparency but notes, "payers, plans, patients, and the general public are often not aware of these potential conflicts of interest." They should be—sunlight is the best disinfectant.