Tag Archives: MACRA

healthcare quality

Healthcare Quality: How to Define It

In a previous article, we mentioned the Centers for Medicare and Medicaid Services’ (CMS’s) new provider reimbursement model, Medicare Access and CHIP Reauthorization (MACRA), which replaces the current reimbursement formula. MACRA will include an incentive component that will replace those in plans today; performance criteria will roll out in 2019. From the providers’ lens, they are faced with the need to hire more administrative resources to keep up with the tracking of their performance, and the big question is: Are consumers making different choices based on the performance results of a physician or hospital? When there are more than 150 different measures in place today, how is an occasional consumer of healthcare services able to assess the most important criteria in finding the right physician?

During a recent employers’ conference on the East Coast, the forum featured two panels consisting of the health plans and the providers. The panels were set in a Q&A format to enlist the leaderships’ views on various topics facing the employers, and it was a fascinating dialogue we have attempted to capture below.

In the first panel with the execs of five major carriers, the opening question asked for a one-minute overview of their health plan’s area of focus in addressing the employers’ challenges. The responses were consistent among the leaders — the focus is on the individual consumer and value-based contracting. When the discussion evolved into quality criteria and outcomes to identify high-performing physicians, the leaders acknowledged that defining quality and outcomes is a challenging endeavor, and each health plan has its own formula to assess the providers’ performance. One commented that a physician practicing in the morning could be viewed as a top performer by a carrier, while that afternoon, she could be ranked as a poor performer by another, even though the physician was delivering the same process of care for all her patients. The leaders agreed that employers really needed to weigh in on what was important to them so that there was greater consistency in the scoring logic with the physician community.

See Also: Are Your Health Cost Savings an Illusion?

The next panel was with the chief medical officers (CMOs) from the major systems and a primary care practice, and a number of relevant things were learned. There was unanimity in the frustration with the variation in the quality metrics being used by commercial carriers and CMS. One physician said he had never been asked for input on the quality metrics, and he was ready to engage in that discussion. The physician leaders asked for the employers to outline what was important to them so there could be a common set of standards for the commercial market — a consistent request from the leaders of both healthcare stakeholders.

Two of the CMOs were primary care physicians, and they both acknowledged that we have not given enough attention to the resource that has the greatest opportunity to lower employers’ costs — the family doctor. The primary care physicians can build trusting relationships with employees; they can help avoid the unnecessary services being provided; and they can help educate and channel the patients into the appropriate specialist, when they are equipped with quality and cost information.

The CMO from the largest health system acknowledged that there was 30% variation (aka waste) in the way care was being delivered within the community and that there was opportunity to improve the results. If we know there is variation in care even with performance-based contracts in place, what is the catalyst to get serious on consistency? Are there any other services that you purchase with a 30% variance? Would you continue spending money for that service knowing there is wasted spending?

After the event, there was a conversation with an employer, and we discussed the employers’ opportunity to help shape and define the quality metrics. This employer stated that he did not have experience or knowledge on how to establish criteria, and he was surprised to hear health plans were looking for his guidance, because he thought it was their role. When the discussion moved to the employer’s overall business, he acknowledged its internal business units established the quality criteria in assessing the vendors’ performance.

So, how do we move beyond the billboards and the marketing campaigns to understand the healthcare suppliers’ performance? Who has the greatest opportunity to drive change in a free-market system? We believe the one paying the bill has the ability to drive a more consistent outcome for high-quality, cost-effective healthcare. Let’s recognize and reward the physicians who are delivering a Six Sigma approach to healthcare so the other suppliers will be motivated to change. It’s time for employer-driven healthcare.

Why Healthcare Costs Soar (Part 4)

The first three articles in this series by David Toomey and me are here, here and here.

Over the last few years, the buzz in the healthcare industry has been about accountable care organizations (ACOs), and the next wave will be the promotion of “value-based contracting.” These are similar approaches, different words.

Generally, an ACO is formed around a physician group or a hospital linked to physicians. The basic concept is for the provider system to be accountable for patients, with the providers financially motivated to affect their patient population’s overall costs. Makes sense, right?

For the past 25 or so years, physicians have been linked to independent practice associations, medical groups and management services organizations. Many of these provider organizations have had financial incentives tied to performance. Data have been available to assess physician performance. So, what’s different now?

Today the Feds are re-emphasizing performance in their physician contracting under the new Medicare Access and CHIP Reauthorization (MACRA), which replaces the current reimbursement formula.

Beginning in 2019, the existing incentive programs now used for Medicare physicians will be replaced by a new performance-based model with four components. Those components are 1) quality, 2) resource use, 3) meaningful use of technology and 4) clinical practice improvement.

Based on the Medicare physicians’ results, the reimbursements can be decreased by as much as 4% (adjusting to 9% by 2022). The program will have upside incentive for achieving exceptional performance of as much as 12% in 2019.

As the largest purchaser, Medicare is striving to establish per-unit cost consistency in every market. Yet Medicare’s 2014 costs vary from $6,631 to $10,610 across markets. Why? Even if the cost per unit of service is standardized, extremely wide variation exists in how patients are treated for given conditions. When wide variation in care plans exists, some are right and some are wrong, as regular readers of Cracking Health Costs know. Some are better, and some are worse. Period.

It’ll be interesting to see if the four new performance measures under MACRA will have a better impact than what’s in place today.

Self-insured employers don’t need to wait four or five years to see the results. They can leverage their purchasing scale with the providers to drive out both inappropriate care and unit price variations. The time to start is now.