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“Health Care Reform”
William L. Rich III, MD, FACS
Presented at ASCRS, 2009
Dr. Ritch, the Medical Director of Health Policy for the American Academy of Ophthalmology, shared with us his thoughts on changes in the health care environment that will affect ophthalmic practice and all medical care. He began with a description of President Barack Obama’s philosophies on health care, which will dictate his administration's policies.
Uninsured: He would like to expand existing public programs and create new ones for small business and individuals. Health insurance will be mandated for children. Employers must offer insurance or pay into a pool to finance the new public program.
Employer mandates: Employers must offer meaningful insurance or contribute a percentage of payroll into the public plan. Small businesses may be exempted from this requirement.
Premium subsidies: Income related subsidies will enable individuals and families to buy into the new FEHB (Federal Employee Health Benefit) like plan with portable coverage.
Employer Premium subsidies: There will be a tax credit for small businesses of up to 50% of premium if insurance is supplied.
Insurance Pools: The National Health Insurance Exchange will consist of participating insurers that must provide a guaranteed issue. This must have coverage that is equal to that of the new public plan.
Private Insurance Reforms: This will include $50 billion for health related information technology (IT). Generic drugs and drug reimportation will be encouraged. This will allow for direct public negotiation of drug prices. It will also include malpractice reform while still preserving patient rights. (How will they do that?)
Quality: The quality of medical care will be scrutinized and rewarded or penalized by several means. An independent comparative effectiveness institute will evaluate the cost effectiveness and efficacy of various surgeries and drugs. The pay for performance concept will increase or decrease pay depending on meeting certain criteria. Disparities in health care based on race and socioeconomic status will be addressed. Public reporting of quality of care will be initiated.
The costs for these changes are estimated at $50 to 65 billion per year, to be supported by "savings" and increased taxes on those with greater than $250,000 of yearly income. The reality is that we cannot pay for those covered now, so payment reform must precede expansion of coverage. The history of Hr 3162 and MIPPA (Medicare Improvements for Patients and Providers Act) reflect the political philosophy of the parties and hint at possible reforms in 2009.
The philosophy of the Democrats is that Medicare should be a benefit and health care should be extended to populations at risk. They want to expand benefits and feel that public sources of care are more efficient. They feel that the CMS should negotiate drug costs and overall favor regulations.
The philosophy of the Republicans is that Medicare should be a defined contribution. They want to restrict the growth of public programs and benefits. They favor private competition. They are against direct drug negotiations and overall favor competition.
Democrats wish to increase aid to low income beneficiaries: 50% to those with incomes less than $20,000, and 28% without Medigap coverage. They favor a waiver of cost sharing and deductibles for preventative services (such as colorectal screening). They seek to protect rural physicians with extension of support due to expire. They support PQRI and public reporting as well as FFS and cuts to Medicare Advantage. The Democrats wish to establish reports on comparative effectiveness of drugs and procedures. They will allow CMS to pay for drugs in head to head clinical trials. They favor enhanced financing for the Medical Home. Wikipedia has this to say about this concept: "Central to the Medical Home approach is the premise that patient-centered care requires a fundamental shift in the relationship between patients and their primary care physicians. There must be a higher degree of personalized care coordination, access beyond the acute care episode, and identification of key medical and community resources to meet the patients' needs. However, the widespread adoption of information technology for care management and quality improvement along with adequate payment methods are essential. In the long run, the Medical Home is likely to result in savings to patients' needs. However, the widespread adoption of information technology for care management and quality improvement along with adequate payment methods are essential. In the long run, the Medical Home is likely to result in savings to patients, employers, and health plans. Increasing the emphasis on primary care could produce large dividends throughout the health care system."
The past Republican president vetoed MIPPA. The party supported Medicare private plans despite excessive premium payment of 117% of Medicare fee for service. They supported the "deemed" status of Medicare Advantage FFS plans.
When faced with 22% cuts in MD payments on July 1, 2008, Congress passed MIPPA over Bush's veto which resulted in a 0.5% update for the last 6 months of 2008 and a 1.1% increase in 2009. However, there will be 21% cut in payments in January 2010 without any reforms. The 1.1% increase for 2009 includes a 2% increase for PQRI and 2% for electronic prescribing. In fact, 80% of the payment increase is being used to incentivize quality and HIT (healthcare information technology).
Payment reforms for 2009 include the following concepts: 1) Stimulation of coordination and accountability (Medical Home), 2) Bonus to primary care physicians, 3) Continuation of pay for performance, 4) Comparative effectiveness studies, 5) Stimulation of HIT, 6) Moving away from transactional payment to value based purchasing. Recent legislation proposed six spending targets which by 2018 would result in long term increases in surgical services, slow increases in office visits, and marked cuts in high end imaging and office based testing.
Health Information Technology (HIT): There will be a continuation of the bonus for electronic prescribing (2% in 2009-10, 1% in 2011-12, 0.5% in 2013) followed by 5 years of increasing penalties for non-adoption. The HHS will stipulate interoperability standards for EMR and HIT in 2009. Ophthalmic HIT and EMR standards will be in effect by 2011.
Comparative "clinical" effectiveness: There is a stipulation for comparative effectiveness study in the MIPPA 2008.
Value based payment: This will be realized via the coordination of care (Medical Home). Gain sharing will be encouraged and rewarded. For example, a program to decrease infection coordinated by both physicians and the hospital. Bundling of procedures will be increased.
Efficiency: The typical measure of physician efficiency is the ratio of actual resource used to expected resource used, given an equivalent quality of care. Efficiency measures must be adjusted for relevant practice differences that the physician cannot control. It assumes equivalent quality of care between the actual and expected resource use, requiring the measurement and reporting of quality of care concurrently.
Episode Groupers: These are software technologies that reduce claims data to a set of measures that are "meaningful" and easily compared. They identify and classify clinically related services and procedures that occur over time into "episodes of care". They use claim coding data from outpatient, inpatient, laboratory and pharmaceutical sources.
Economic Profiling: Commercial plans have already been profiling physicians on the basis of cost for several years. Many plans use utilization data and grouper software to profile specialty care. The problems of profiling are that there is no way to differentiate from claims data an episode provided by a subspecialist from that of a general ophthalmologist or optometrist. There is no way to adjust for the severity of disease or associated co-morbidities. This places all specialists in the highest cost tier. Profiling benefits purchasers because it carves out the sickest patients and puts them at more financial risk for the choice of a provider. It leads to administrative nightmares for specialists and academicians, who are not deemed "preferred".
In summary, there is a long term trend to move from financially rewarding physicians for the provision of high volume and paying for the efficient provision of evidence based, effective and efficient care. There is a strong emphasis on meaningful outcome metrics. There is a ten year trend with decreasing payment for office based testing and imaging, with increases for major procedures and exams. We as physicians must educate patients and policy makers that current "grouper" software is flawed and creates financial barriers to care. There will be further scrutiny of relations with industry, such as the Sunshine Act. There will be increased payments for primary care and the Medical Home. There will be more comparative effectiveness studies and research and implementation of efficiency measures. The current administration has pledged billions for health care reform which will (and already has) changed the practice of medicine!