Carrots, not Sticks: Focusing on Quality Performance

While policymakers in both parties argue over how to reshape Medicare for the future, the Medicare Advantage (MA) program is quietly and effectively getting the job done.

Consider these facts:

• Today, nearly 1 in 4 Medicare beneficiaries have chosen to enroll in a MA plan — 12.8 million of Medicare’s 49 million beneficiaries.  I’m proud of the fact that ACHP member plans that offer Medicare Advantage enroll about 15 percent of the almost 13 million MA members.   MA plans are doing a better job at preventing unnecessary readmissions to hospitals by improving coordination of care and care transitions (also see ACHP’s recent Transitions of Care report);[1]
• Beneficiaries with chronic conditions often get better care if they are enrolled in an MA plan —  for example, diabetics who are enrolled in MA plans see their doctors more often and go to the hospital less frequently than those who are in traditional fee-for-service Medicare;[2]
• The number of beneficiaries enrolling in MA plans is rising at a rate of five to ten percent a year and the number of plans participating in the program is also rising.

Sadly, Medicare Advantage is often a political football, tossed and kicked in different directions by both parties. But such political contentiousness belies the true value of the program. By creating the combination of quality and payment incentives for patients and their providers to get the right care at the right time, Medicare Advantage has helped to manage costs and improve quality.  Health plans have led the way in the movement toward value-based purchasing by adding preventive health care and care coordination for high risk patients to the typical array of benefits.

The Medicare Advantage program’s  capitated payments promote cost savings and allow for flexibility to manage chronic disease and complex patient cases.  In addition, Medicare Advantage allows health plans to provide social supports and to fill in gaps where patients need care.

The benefits to patients are clear: with Medicare Advantage, beneficiaries’ total out-of-pocket costs are much more predictable and typically less than they would be using fee-for-service.  Moreover, MA members have guaranteed access to a network of qualified providers.  In an MA plan the problems that some fee-for-service patients face, such as limited access to providers, simply don’t exist.

And there’s another important difference between Medicare Advantage and traditional fee-for-service Medicare:  quality measurement.  Since 1997, MA plans have collected and reported data on their performance and the performance of their providers using evidence-based quality measures. This information helps to guide plans’ quality improvement efforts and provides Medicare consumers with detailed data about the performance of MA plans. That data forms the basis for Medicare’s “Five-Star” quality rating system that provides consumers with summary information about plans and their providers’ performance, as well as detailed drill-down data.  As a result, beneficiaries and the general public have robust information about the quality of the care delivered by MA plans and can choose the plan that best suits their health care needs.  This stands in stark contrast with traditional Medicare, which until recently has collected very little information about quality and customer service and provides consumers with much less comparative data.

The Affordable Care Act established a new program to reward plans that consistently provide high-quality care and service to their Medicare members. Under the law, MA plans that achieve either four or five stars for their performance are eligible for additional payments that reflect their investment in quality and service.  These quality incentives must be spent directly on enrollees to expand benefits, making it clear that the additional funding ultimately is intended to improve the health of members.  To incentivize more plans to improve, a demonstration program that provides incentive payments to Medicare Advantage plans with a star rating of three stars or above is in place for 2012, 2013 and 2014.

ACHP member plans have performed extremely well under this ratings system:  Seven of the MA plans offered by our members received 5 stars in 2012.  In fact, 98 percent of Medicare beneficiaries enrolled in a 5-Star Medicare Advantage plan are in an ACHP member plan.  And 70 percent of beneficiaries in plans with a star rating of 4.5 or better are members of an ACHP plan.

Medicare’s quality payments address three of the toughest problems in health care today:  by tracking performance on clinical measures that matter to consumers, such as consistent  care for diabetes patients, health and health care are improved; by grouping these clinical ratings with customer service ratings, consumers can make choices about where they will get the care and service they need; and by aligning payment with higher performance on clinical, satisfaction and access measures, we’re spending our Medicare dollars more wisely.

In short, health plans in Medicare Advantage have an incentive to provide high-quality services and to do so efficiently.  These quality-over-quantity incentives promote better care; they also give patients clear, evidence-based information about their health plans and providers.  Medicare beneficiaries can use the star system to help them select a high-quality plan that also emphasizes customer service.

What’s more, highly rated plans can, and should, be used as learning laboratories for Medicare innovation and program reform. Medicare Advantage provides a model for reform of traditional fee-for-service Medicare, transforming the way in which patients and providers access and deliver health care.  Let’s use it.

- Patricia Smith
President and CEO, ACHP

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[1] “Hospital Readmission Rates in Medicare Advantage Plans.” American Journal of Managed Care. 2012; 18(2):96-104.

[2] “Medicare Advantage Chronic Special Needs Plan Boosted Primary Care, Reduced Hospital Use Among Diabetes Patients.”  Health Affairs, January 2012 31:1110-119.

(Image courtesy of Green Growth Cascadia)

Transitions of Care from Hospital to Home

Today, the Alliance of Community Health Plans released a new report, Transitions of Care from Hospital to Home, the second in our series entitled Health Plan Innovations in Patient-Centered Care.  This new report details our members’ care transition initiatives and focuses on health plans’ roles in implementing and sustaining improvements to patient transitions from hospital to home.

The process of hospitalization is a stressful, confusing, and often traumatic experience, for both patients and their loved ones. Augmenting this anxiety are the difficulties associated with transitioning back home: poor coordination of care, confusion with instructions and medications, and a lack of communication all contribute to high hospital readmissions rates and medication errors. Every year, millions of Medicare patients are re-hospitalized within 30 days of being discharged. Not only do readmissions increase stress and health risks, they are costly – Medicare readmissions alone cost the U.S. over $26 billion annually.

Health plans play a crucial role in these transitions, as they are often the only entities that have a complete picture of a patient’s care across locations. ACHP health plans have been at the vanguard of improving care transitions for their members, assisted by close ties with their communities and partnerships with providers. Our report, conducted by independent health care analyst Avalere Health, incorporates insight and feedback from twelve different ACHP plans working to improve patient care. By identifying five key practices in care coordination amidst shifting providers and locations, these member plans can more effectively facilitate their transition programs’ success:

• Using data to tailor care transition programs to patients’ needs.  By identifying patients most at risk for readmission, plans can ensure that these patients get the necessary help and resources for their transition to home.
• Anticipating patients’ needs and engaging them early in the transition process.  Engaging patients prior to hospital discharge allows health plans to make sure the patient is going to an appropriate setting, prepares a patient for a home visit from a case manager or other clinician, and provides the patient with realistic expectations about their care and guidance on addressing issues that may arise.
• Engaging providers to become program partners.  Health plans can incorporate provider feedback into the design of care transitions programs and communicate regularly with provider teams to maintain physician engagement and incentivize positive outcomes.
• Leveraging technology to improve care transitions.  Technology, including access to a centralized and accurate patient record, plays a critical role in how health plans facilitate communication between patients and their providers during a transition of care.
• Incorporating care transitions into broader quality initiatives.  Some plans use their care transitions programs to enroll members into other programs such as disease management, while other plans make care transitions a component of a larger program, such as a patient-centered medical home, rather than a stand-alone initiative.

In implementing these key practices, ACHP plans have developed innovative and creative solutions to connect with patients and coordinate with providers. Security Health Plan of Wisconsin collaborates with discharge planners at each of its contracted hospitals, and sends “Get Well Cards” to patients prior to discharge. These cards serve to engage patients in and provide explanation of care transitions programs.  Below is an example of one of the cards.

Technology plays a critical role in facilitating communication; in light of this, ACHP plans have improved their care coordination by utilizing telehealth solutions and maintaining electronic medical records. All of HealthPartners of Minnesota onsite case managers are equipped with laptops, which allow them secure access to their health information systems and platforms. In rural Michigan, where access to care is of vital concern, Priority Health uses telehealth solutions for heart failure patients. By using glucometers to remotely monitor glucose levels in CHF patients with diabetes, providers keep an eye on patients – if the daily data indicates a red flag, providers will telephone or conduct a home visit to check up. These are only a small fraction of the myriad ways in which our member plans are developing promising solutions to the most pressing issues of care transition.

Based on these examples and many others like them from our member plans, it is clear that we must move beyond thinking about care as individual episodes of service where one piece of the delivery system hands off a patient to another.  Successful care transitions require a patient-centered approach in which providers and health plan staff are working in partnership and utilizing their unique roles and skills to provide the best care for patients.

My hope is that this report will serve as a useful resource to health plans, providers, and policy makers, as well as consumers. Much is at stake in reducing hospital readmissions; particularly now, the sense of urgency to reduce costs and improve quality of care is intensifying. We can all benefit from taking a look at the successful initiatives of ACHP health plans, as well as the challenges they have faced, to continue to search for and implement new care transitions strategies.

- Patricia Smith
President and CEO, ACHP

Reaching the Goal of Affordability

As I said in my last blog post, health care in America costs more than it should. The Affordable Care Act, while a real step forward on many fronts, falls short in effectively dealing with unsustainable spending on health care. And although there is movement toward affordable health care among ACHP member plans and other committed stakeholders, we have a very long and difficult road ahead. We simply cannot maintain quality care and access to that care without seriously addressing the issue of affordable care.

While appropriate levels of health care spending contribute to maintaining and improving health, excessive health care spending is a burden on the private and public sectors, crowds out other important investment, and diminishes the capacity of our nation to remain competitive and our communities to remain economically viable.  ACHP is committed to a continuing leadership role in forging solutions to this challenge, especially at the community level, where some of the most effective levers for reducing costs can be found and where we have extensive experience.

A comprehensive strategy to achieve affordability must address the total cost of care. Developing solutions for just one sector, public or private, does nothing more than allow a shift of costs to another payer. Three areas must be the focus of attention:

• A transformation in the delivery of care. Payment reform is the starting point for the critical step of transforming our delivery system. Fee-for-service payments reward volume and promote fragmentation; to discourage wasteful practices, payment must reward value. A value-based payment system will promote the alignment of incentives for better care across both providers and health plans.

• Market forces and market consolidation. Economic factors and the Affordable Care Act are both increasing consolidation among health care providers and in the insurance market.  The question is how consolidation affects the price and total cost of care for all payers.  If provider and payer incentives are not aligned — that is, if both providers and payers aren’t invested in lowering cost trend and total cost of care across the entire system, consolidation is likely to drive up prices without producing substantial value for the consumer.  Both private and public payers, as well as providers, must step up to the challenge of aligning incentives between the financing and delivery of care.

• A culture of health. We should remind ourselves that better health is the ultimate goal. While it has long been recognized that social and economic factors have by far the greatest impact on health, our health system tilts strongly to medical solutions. These interventions may serve the provider system well, but they are inadequate to the challenge of achieving a healthier population.  That requires commitment to reducing disease and creating a culture of health. Over time, by incorporating communities, families, employers and other stakeholders into promoting health, we can place less demand on the health care system across the population.

While ACHP firmly believes in these three key principles for affordability and sustainability, such goals require action at federal, state, and local levels. Our community-based member plans will continue to collaborate, innovate, and develop transformative models of care, while we at ACHP will continue to provide leadership in working towards these goals of better care and better health at a better cost.

- Patricia Smith
President and CEO, ACHP

Cherry Blossoms, the Supreme Court, and a Birthday Cake!

When you have lived in Washington long enough, you get used to the great spring migration of visitors eager to see the famous cherry blossoms along the Tidal Basin.  Usually this annual celebration of nature occurs in early to mid-April, but thanks to our unusually warm weather they have already blossomed.

But that’s not all that has Washington buzzing this week.  Last Friday, politicians from both parties either celebrated or decried the second anniversary of the signing of the Affordable Care Act (ACA), also known as the health reform law.  And this week, the U.S. Supreme Court has begun a virtually unprecedented three-day set of oral arguments in a case challenging the constitutionality of various provisions of the Act. Both sides of this continuing debate also plan to make their presence known with a series of events and demonstrations on Capitol Hill and elsewhere in town.

With so much hullaballoo, it’s sometimes difficult to parse out the meaning of it all in more measured tones, yet that’s exactly what is needed.

Let’s take the anniversary.  Such occasions are useful in allowing us to step back and see how things are going.  Not perfectly, to be sure, but in the two years since the Act was signed into law, progress has been made in accomplishing one of the law’s primary objectives: coverage for all Americans.  While there is still a great deal of work to be done, the Department of Health and Human Services has highlighted benefits that many Americans have already seen from the law:

• Seniors and people with disabilities on Medicare have new prevention benefits and those with high prescription drug costs saved over $3 billion in 2011 through discounts on drugs they buy while in the so-called “donut hole.”

• More than 2.5 million young adults (age 18-26) gained health insurance coverage in 2011 thanks to a provision of the law requiring insurers to allow parents to keep adult children on their policy if they don’t have access to an employer plan.

• Nearly 50,000 people with pre-existing medical conditions ranging from cancer to diabetes are now covered by the Pre-Existing Condition Insurance Program (PCIP). Although enrollment in this program has lagged behind earlier projections, extension of coverage makes a difference in the lives of people living with these conditions.

Equally as important as these initial steps toward health care coverage is the advancement of the insurance principle of shared risk.  This market principle recognizes that most of us will have healthy and sick times during our lives.  By expanding coverage to more Americans, the law makes it possible to spread risk – distributing the cost of inevitable illness across a wider share of the population.  This, in effect, is what the individual mandate in the law accomplishes.  In the years ahead, we’ll need to make health care and insurance more affordable.  Combining coverage with shared risk is step number one.

So let’s move on to the Supreme Court.  One of the biggest issues is whether the government can mandate purchase of health coverage and thereby spread the cost over a very large population.  Following this week’s arguments, the Supreme Court is likely to issue its decision in late June or early July.  No one can know for certain how this will turn out, but there are at least three possible scenarios:

Scenario 1:  The Court could decide to overturn major portions of the law including the individual mandate, the expansion of Medicaid eligibility, and the reforms in insurance underwriting (i.e., prohibiting exclusions based on pre-existing conditions, rescissions, annual and lifetime limits, and rating based on sex and age).

Scenario 2:  The Court could surgically strike down the mandate, but leave in place the insurance reforms.

Scenario 3:  The Court could allow the Act to stand in its entirety.

Scenarios 1 and 3, while diametrically opposite, would  provide clarity for the health care system and the nation, on the issue of the mandate.  Under Scenario 1, we would return, more or less, to the status quo of spotty insurance coverage and high levels of uncompensated care, and the number of uninsured Americans would continue to increase.  Under Scenario 3, we would move forward to fully implement the health care law with all of the accompanying complexities.

Scenario 2 is perhaps the most troubling possibility.  If the Court strikes down the mandate, we will continue to face a growing number of uninsured Americans.  At the same time, if the court leaves the insurance reforms in place, insurers’ hands will be tied if consumers can move in and out of insurance based on their health status. This could send our private insurance industry into a steep spiral of higher costs and fewer tools to contain those costs. Ironically, the likely result could be a stronger push to expand the number and type of public insurance programs.

Finally, however this week’s debates – political and legal – are resolved, it is clear that, for many reasons, health care in America costs more than it should.  Encouragingly, movement toward improving value has begun to take root.  It’s still fragile, but consumers, employers, plans, and others are beginning to coalesce around the idea that the best direction for the American health care system is one that drives toward improved care and lower costs.  Let’s not take our eyes off that goal no matter how pretty the blossoms or distracting the political and legal machinations.

- Patricia Smith
President and CEO, ACHP

(Photos courtesy of EDailyUpdate and ELCivics)

Prevention Strategies: The Latest on Obesity

The Organisation for Economic Co-operation and Development (OECD) released a report in February analyzing the latest trends in obesity internationally, with grim (albeit unsurprising) results: the United States is officially the fattest country of all OECD member countries. U.S. childhood obesity rates are higher than any other country in the OECD – 40 percent of American children are overweight. That’s over one in three kids. And for adults, the prognosis is far, far worse: the OECD projects that based on current rates, by 2020, 75 percent of U.S. adults will be overweight or obese.  That is a staggering three out of four adults.

Let’s take a moment to consider that statistic and its significance. Independent research demonstrates that ailments associated with obesity are a prime factor in skyrocketing health care costs. Health expenditures for people whose weight falls into the “obese” category are, on average, 25% higher than for others. With this knowledge, it’s not hard to see how some predictions estimate that by 2018, the price of health care for all obesity-related ailments in the U.S. will be $344 billion.

While the statistics and research confirm that obesity is indeed a public health crisis, there are a heartening number of initiatives, campaigns, and programs aimed at addressing the challenges of reducing obesity. Ideally, we should aim at preventing obesity-related health problems in the first place, by addressing the problem early on – that is, by tackling childhood obesity.  Effectively reducing pediatric obesity requires a multi-faceted approach: one that incorporates comprehensive strategies involving communities, health care providers, and individuals.

ACHP organizations, as community-based nonprofit providers, are acutely aware of the necessity of building and maintaining healthy lifestyles from an early age, in order to prevent pediatric obesity. Over the past several years, ACHP plans have developed dozens of innovative, local programs that support healthy and active lifestyles. These initiatives integrate a variety of resources and approaches, including research-driven pilot projects, community engagement events, and clinical programs developed collaboratively with providers.

UCare in Minnesota, along with Group Health Cooperative Seattle, Group Health Cooperative of South Central Wisconsin, CareOregon, and many other health plans have developed programs designed to increase the accessibility of healthy food to children and educate them on nutrition and portion size. HEALTHY Armstrong (Healthy Eating Active Lifestyles Together Helping Youth),  a partnership between the  University of Pittsburgh Medical Center Health Plan and community organizations, focuses on educating children and their families  through these community partnerships. This highly collaborative model utilizes principles of a program developed by the National Institutes of Health, and was recognized in the Health Communities Act of 2009 as a model for community organizations to emulate.

Other ACHP member plans have initiatives focused on engaging parents and families, such as Kaiser Permanente Georgia’s Operation Zero (OZ), a family-based program that involves dieticians and fitness specialists. OZ incorporates rubrics of progress in order to help set goals and keep track of improvements. Minnesota’s HealthPartners FiiT Kids Program is a collaboration with providers, initiated through pediatrician referrals, and encourages the entire family to participate in healthy behaviors. 5210 Screening, a program developed by Martin’s Point Healthcare in Portland, Maine, screens members in a clinical setting, in order to help pediatricians and parents make more informed decisions regarding a child’s health.

While the issue of pediatric obesity increasingly garners national recognition as a critical problem demanding immediate attention, it is up to all of us – communities, providers, and families – to look for effective solutions and preventive measures. ACHP member plans take this responsibility to heart; they are, after all, an integral part of their communities. Their comprehensive approaches offer inspiration on how health plans can play a prominent role in public health. In order to foster systemic change and to slow (and perhaps even reverse) the alarming trends in obesity, we all need to be invested in the health of our communities. And with so many local and engaged health plans focused on exactly that, the outlook may not be quite so grim.

Beware of bold predictions. They’re usually wrong.

Bold predictions make for good headlines but they rarely make for good analysis. Take, for examples, the following:

“The horse is here to stay but the automobile is a novelty, a fad.” President, Michigan Savings Bank, analysis done for Henry Ford, 1903.

“Computers in the future may weigh no more than 1.5 tons.” Popular Mechanics, industry analysis, 1949.

“It will be years – not in my time – before a woman becomes Prime Minister.” Margaret Thatcher, political analysis, 1974.

So when I recently read a New York Times analysis predicting the end of the health insurance industry by the year 2020, I paused to consider whether the authors (two respected health policy experts) had a point to make.

Their basic theory is that the coming of accountable care organizations (ACOs) will make insurance passé and unnecessary. “Accountable care organizations,” they said, “will increase coordination of patient’s care and shift the focus of medicine away from treating sickness and toward keeping people healthy.”  Now that’s a theory we can wholeheartedly embrace.  It has been health plans, working in partnership with physicians, medical groups, and integrated care organizations that have developed and tested models to maximize coordination among providers, provide team care and care management for patients, and promote wellness and prevention.  .

The authors miss important responsibilities assumed by health plans – many of which ACOs would also have to take on.  Health plans are far more than a company to collect premiums and pay claims. They create broad risk pools that help cushion the very sick against catastrophic costs. They meet stringent solvency tests to ensure that when people do get sick or injured, the money is there to pay for their care. And the best partner closely with providers to assume responsibility for a patient population and develop innovative care delivery approaches that improve health and lower costs.

Employers, who help pay for coverage for more than 180 million Americans, recognize the importance of health plans.  They rely on plans to put together benefit packages not only to meet the varied medical needs of their employees, but also to help workers stay healthy. They ask them to develop comprehensive networks of skilled health care practitioners to serve patients in wide-ranging geographic areas of a state, region, or the entire country. And they ask plans to help in measuring and reporting on the quality and cost of care that is delivered to patients.

Health plans have continued to provide essential functions while other models have been tried and found wanting. In the 1990s, for example, prognosticators predicted insurers would be replaced by something called “PHOs,” or Physician Hospital Organizations. Today, PHOs exist only in research literature. Similarly, less than 10 years ago, physician-owned hospitals were the newest wave of change.  Today, legislators and regulators are pushing back by limiting or banning such arrangements.

ACHP was proud to support provisions of the health care law that will help spur the creation of more accountable care in Medicare, Medicaid, and the private sector.  ACOs could provide an important function in aligning incentives between the financing and delivery of care. But for ACOs to succeed for patients, they must be held accountable for both care and costs. If they are not, they may serve just to promote more consolidation among providers, all the while diminishing competition in the market even further.

Health reforms should build on the private health insurance model, while also requiring insurers and providers to make important changes that will lead to improved care and better value. For example, the new health reform law requires that insurers step up and eliminate many of the underwriting practices that were developed to deal with a fractured system of coverage and payments. Providers, for their part, will be more carefully monitored and measured, with payments increasingly rewarding value, not volume.  And patients will take a greater role in choosing coverage and seeking care.

My prediction –and you can hold me to it – is that health plans will continue to play a powerful role in our health care system if they are accountable for total costs, and for the quality of care and health of their patients.  If ACOs prove that they are able to do the same, they, too, will have a role in our health care system.   And patients will be the ultimate winners.

- Patricia Smith
President and CEO, ACHP

“U.S. Health Care: The Good News” T.R. Reid PBS Documentary

In his new hour-long documentary airing tonight, Former Washington Post correspondent T.R. Reid travels around the county exploring the cost disparities of medical services and care. His aim was to find successful models of high-quality and affordable health care – no small achievement in the United States, where we continue to struggle with controlling health care costs. He discovered that many doctors and hospitals across the nation actually have very effective models for providing excellent health care at a reasonable price. The documentary highlights two ACHP member plans: Rocky Mountain Health Plans in Grand Junction, Colorado and Group Health Cooperative in Seattle. These two health care plans have developed systems that can sustain high-quality health care for all of their members at lower costs, and they enjoy strong community support. Reid notes that Rocky Mountain Health Plans have implemented a payment model that pays for high-quality care and sanctions low quality care, and requires openness for all enrollees, including those in Medicaid. Reid also features Group Health Cooperative’s mostly integrated system that has provided a solid ground for an effective medical home. He says that “If every local health care system could be as efficient as the low-spending communities spotlighted in this film, we could finally afford to provide quality health care at a reasonable cost for every American.”

The documentary will premiere Thursday, February 16 at 9pm ET; in the Washington DC Metro area, it will be aired on Channel 26 (WETA) on Tuesday, February 21 at 11pm.