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Robert Pearl, M.D., Urges a New Approach to Create Value-Driven Healthcare

Keynote Speech Cites Physician-Driven Innovation and Technologies to Re-invent Healthcare Delivery

 

Washington, DC – With healthcare now 18 percent of the Gross National Product and climbing each year, Robert Pearl, M.D., keynote speaker for the American Medical Group Association 2016 Institute for Quality Leadership (IQL) conference, underscored the innovative and disruptive thinking needed among physician leaders to transform healthcare delivery and achieve the Triple Aim.

“Economics, not politics, is ultimately the most powerful driving force in healthcare today,” noted Pearl, who is chairman of the Council of Accountable Physician Practices (CAPP), a coalition of high-performing multi-specialty medical groups and health systems, as well as CEO of The Permanente Medical Group and president and CEO of the Mid-Atlantic Permanente Medical Group. “If we change the structure, modify how care is reimbursed, and embrace 21st century technology, we can improve quality and access, while at the same time lowering the cost of healthcare delivery overall.

“For example, through capitated payments, financial incentives will reward keeping people healthy, encourage prevention, maximize patient safety, and lead physicians to diagnose sooner and treat more effectively,” he said.

During his presentation, Dr. Pearl noted that attempts to change the healthcare cost equation in the past focused on reducing access to care, rationing medical care or reducing provider payment. None have proven effective, and all decrease quality and patient satisfaction. He supports the movement towards payment based on value, rather than volume, and recommends that the nation stay the course.

As part of the shift, he outlined various opportunities for clinical and operational improvements. Examples included approaches to reduce the time between surgeries and ways to minimize hospital care delays over weekend days. Dr. Pearl cited the success of the various CAPP medical groups in implementing digital communications and electronic connectivity as the types of innovations that have lowered operating costs across multiple sectors when implemented through large, physician-led multi-specialty medical groups. Similar innovative applications need to be widespread in health care in order to flatten the trajectory of health care inflation across the entire nation.

Dr. Pearl cited three specific technologies that are changing the way healthcare is delivered, including improving quality while reducing cost:

  • Video and digital photography that enable physicians to diagnose patients remotely and secure appropriate care immediately. One example of this technology in action is the use of video consultation with a neurologist to quickly evaluate a patient in the emergency department who might be having a stroke. This practice has already reduced the time for a patient to receive appropriate treatment by 50 percent.
  • Data analytics that can identify groups of patients and individuals who are at risk for specific conditions, or who require additional care.
  • Use of the electronic medical record not just as a repository of data, but as a communication tool between healthcare providers. This technology enables the best patient care decisions to be made at every point in the care continuum.

“When payment is tied to patient outcomes, and the re-engineering of healthcare delivery is led by physicians, we will see a reduction in the inefficient fragmentation that is so costly today, and improvement in the quality of care that patients receive,” concluded Dr. Pearl.

For information on patients’ experience of coordinated care and the use of technology with their doctors, see results from two Nielsen Strategic Health Perspective Surveys from 2015 and 2016, sponsored by CAPP.

Browse the pages of this site for more information on accountable care. To learn more about physician leadership in the work to achieve accountable care, and to receive updates on key health care issues, follow CAPP on Twitter at: @accountableDOCS.

CAPP Health Care Primer: What Candidates Need to Know

By Robert Pearl, MD, Chair, Council of Accountable Physician Practices

With thousands of political offices up for election this November, health care will continue to be a complex and frequently debated issue.  To help focus discussions, the Council of Accountable Physician Practices has produced an original primer, “What Every Candidate Should Know About Health Care.” This primer is for candidates running for local and national elected office and details the most critical health reform topics they must understand to ultimately improve the medical care their constituents receive.

The three primary issues highlighted in “What Every Candidate Should Know About Health Care” are:

  1. Payment system reform to enable acceleration of the move towards value-based payment and away from the current volume-based fee-for-service model, aligning incentives to reward better patient outcomes, safety and efficiency.
  2. Expanded use of health information technology so care providers always have the information they need to make the best care decisions.
  3. Consistent and meaningful quality measurements to accurately identify high-performing medical groups and health systems.

By bringing these healthcare issues into the political discourse, the leaders of CAPP believe they can educate and inform elected politicians on the accountable approaches that produce the highest quality and best health outcomes for patients.

We encourage you to read and share “What Every Candidate Should Know About Health Care”  and send us feedback on twitter @accountableDOCS.

 

New Brandeis Study: Medical Groups That Take On Risk Show Success in Quality, Care Management

The American Journal of Managed Care recently published a second round of research sponsored by the Council of Accountable Physician Practices (CAPP) on the prevalence and magnitude of capitation and other alternative payment contracts among CAPP’s organized physician groups.

“Risk Contracting and Operational Capabilities in Large Medical Groups During National Healthcare Reform” represents CAPP’s ongoing commitment to promoting the benefits of outcomes-based payments, one of our five pillars.

CAPP partnered with Brandeis researchers Robert Mechanic and Darren Zinner in 2011 to launch a longitudinal study. The focus of the research is to gauge the incidence of alternative payment contracts among CAPP groups, understand these groups’ previous experience with managing risk, and to define the approaches to physician compensation utilized by these groups. This published report is the second round of research conducted.

“This is one of the only published analyses examining payment and contracting practices for a variety of organizations across the full range of their payers. This allows us to better assess the relationship between contracting structures and organizational practices likely to positively impact performance” said Mechanic.

Twenty-two CAPP groups have participated in the survey’s second round, as well as 11 member groups of the Group Practice Improvement Network. The survey asked for information about quality and cost management programs, risk contracting, physician compensation changes and other factors to evaluate risk-based payment models.

According to survey findings, medical groups that received a high portion of revenue from risk contracts were able to more successfully implement advanced programs to avoid hospitalizations and provide care management. It also found that these groups placed greater emphasis on quality and patient experience in their physician compensation models and relatively less on the amount of care provided.

“Groups that had a higher proportion of risk contracts generally had physician compensation models with more emphasis on quality, patient experience and performance, compared to groups in fee-for-service models,” said Mechanic.

He predicted that future rounds of this survey would show a slow and steady movement toward alternative payment models. “Taking on risk is not easy or straightforward, so you really have to have an organization that believes in managing care and physicians that buy into the culture,” he said.

“The Brandeis findings are clear evidence that risk-based payment models allow physicians and medical groups to focus on the patient and their needs, not just on a bottom line,” said Laura Fegraus, Executive Director of CAPP. “CAPP is excited to be a part of this ongoing project to track payment reform progress and provide both current analysis and consistent historical accounting of the “pay-for-value movement.”

A third round of this survey is currently in the field. Results are expected in early 2017.

Read the entire journal article here.

Learning from Medicare Advantage: Moving Toward a Better Model for American Health Care

By Robert Pearl, MD, CEO, The Permanente Medical Group
Chair, Council of Accountable Physician Practices

Despite the political angst, the doomsday predictions and a very rocky launch, the Affordable Care Act has enabled more than 8 million Americans to acquire insurance coverage through the public exchanges.

Health insurance increases the probability that patients will access the medical care they need. And my colleagues at Kaiser Permanente are already seeing some positive stories emerging as a result.

They’ve shared dozens of stories with me about patients with undiagnosed medical problems who are now receiving treatment. In particular, I enjoyed hearing about two new patients in Northern California who’ve benefited from being insured. They came in with life-threatening cancer: One, a mother with a uterine malignancy, and the other, a young man with a testicular mass. Both had gone years without medical care because they were unable to afford it. And now – thanks to medical coverage, early diagnosis and successful treatment – both will live.

But expanding access to health insurance is only the first step. Improving health care delivery is the next step in this journey.

With all the acrimony in our nation’s capital, bipartisan agreements are few and far between.

Medicare Advantage may be the one platform on which both parties can stand. Examining this program and why it has proven so successful offers us insights into where we as a nation might choose to go.

Medicare Advantage: A History Born from Necessity

Since the Medicare program was created in 1965, the federal government has been insuring citizens over the age of 65.This original form of Medicare, called traditional Medicare, was and remains a “fee-for-service” program. That means the Centers for Medicare and Medicaid Services (CMS) – the agency that administers the Medicare program – pays individual physicians for the services they provide to Medicare beneficiaries. Think of a service as an office visit, a test or a procedure. The price for those services is determined by the agency’s Physician Fee Schedule.

Beginning in 1978, Medicare beneficiaries had a second option. They could enroll in private Health Maintenance Organizations (HMOs) under a “risk contract” between CMS and the HMOs.

Over the next 25 years, many modifications to the original legislation were enacted by Congress. And in 2003, this program was renamed Medicare Advantage.

Unlike the government-run traditional Medicare option, the current Medicare Advantage program requires CMS to contract with private health plans on a prospective payment basis. These health plans then contract with individual medical groups and preferred provider networks to deliver the care that enrolled Medicare beneficiaries need.

Operating with a global budget and leveraging their capability to measure and report both quality performance and beneficiary satisfaction, Medicare Advantage plans have demonstrated increased care coordination and superior clinical outcomes.

As a result, these plans are becoming increasingly attractive to Medicare beneficiaries. In fact, 50 percent of new Medicare enrollees choose a Medicare Advantage option – enrollment in the program has tripled in a decade, and now exceeds 16 million beneficiaries. Some experts predict that Medicare Advantage enrollees will represent 30 percent of all Medicare beneficiaries by 2016.

Let’s explore three reasons why this program is so successful.

Reason 1: Beneficiaries Enjoy Abundant Choice and Predictable Costs

Medicare beneficiaries who select a Medicare Advantage plan obtain their care through dedicated delivery systems or provider networks.

In 2014, beneficiaries have an average of 18 Medicare Advantage options from which to select. And they can make their choice through the CMS website, which offers an online marketplace, including comparisons of quality and cost. According to recent Kaiser Family Foundation research, beneficiaries last year paid average monthly premiums of only $49 and most of these Medicare Advantage plans included Part D Drug coverage.

Unlike traditional Medicare, Medicare Advantage enrollees benefit from a limit on out-of-pocket costs. In 2014, the average out-of-pocket maximum for Medicare Advantage plans was $5,000. This gives enrollees – often living on fixed monthly incomes – more predictable costs and greater financial security.

Reason 2: Program Structure Provides Incentives for Superior Quality Outcomes and Service

The structure of Medicare Advantage creates incentives for providers to deliver comprehensive preventive services, achieve superior clinical quality and offer an excellent patient experience.

They know that satisfied beneficiaries will stay with the same plan and delivery system during the next annual selection process – with positive financial outcomes to boot.

And since government payments are based on the age of patients and the diseases they have — not the number of procedures performed — Medicare Advantage programs do best when the physicians and hospitals provide comprehensive preventive services, intervene early for patients with chronic illnesses, and avoid complications.

Although it’s difficult to compare overall outcomes, data from the National Committee for Quality Assurance (NCQA) show that Medicare Advantage organizations that score the highest tend to use a dedicated, integrated delivery system (including a multi-specialty medical group), and deploy a comprehensive electronic medical record (EMR).

Their results are in the top 10 percent of all programs in a broad set of areas, including managing blood pressure, reducing the risk factors that lead to heart attacks and strokes, and screening for cancer. In addition, their structure leads to more coordinated care, increased patient convenience, and greater access to technology, including both a comprehensive EMR and a variety of mobile device applications designed for ease of use by beneficiaries.

Reason 3: Five-Star Quality Rating System Holds Delivery Systems Accountable

An important feature of the Medicare Advantage program is the use of a Five-Star Quality Rating System.

Organizations participating in the Medicare Advantage program must report quality and patient satisfaction data to CMS on an annual basis. Based on this information, each Medicare Advantage program is awarded one to five stars. The Medicare stars program rewards the highest-rated organizations – the ones with superior quality and service results – with additional payments.

And with these dollars, they can invest further in the care of their members. Over time, this approach encourages every program to strive for higher quality and helps direct patients to those delivery systems that accomplish these goals. Most importantly, it results in patients obtaining even better medical care and more comprehensive preventive services.

Medicare Advantage Drawing Bipartisan Support, Sign of Program Success

For decades, liberal democrats have expressed antipathy toward the financing arrangements in Medicare Advantage. They’ve worried that this approach “privatizes” Medicare and allows insurance companies to benefit from this program by operating as “middlemen.”

But it is becoming clear is that the advantages of this program far outweigh the problems. By paying for value rather than volume – and by encouraging investments in superior quality, technology and coordination of care – the real winners are the Medicare beneficiaries and their health.

There’s increasing recognition across the country of our need to move from “fee-for-service” to “pay-for-value” payment models. And a growing number of democrats who were skeptical in the past are embracing this alternative to fee-for-service.

A recent bipartisan call to mitigate planned cuts in Medicare Advantage payments may be proof of this shifting perspective – whether or not those efforts are successful.

Learning from Medicare Advantage

A lot goes in to achieving superior performance, increased care coordination and improved quality outcomes.

For starters, care providers can’t allow patients to “fall through the cracks” when they receive treatment from multiple doctors or in multiple venues. Achieving this increased degree of safety requires a dedicated delivery system committed to seamlessly transitioning patients and their medical information from one provider or venue to the next.

It also requires the deployment and “meaningful use” of a comprehensive electronic medical record (EMR) that provides vital information at every point of contact. Having this information rapid treatment and allows gaps in prevention to be addressed immediately and by all physicians involved in the patient’s care.

And prospective payment creates incentives to provide appropriate preventive services, minimize complications and ensure patients recover as soon as possible.

The Medicare Advantage program offers a model for broader delivery system reform as we continue the journey from a fee-for-service/pay-for-volume “sick care” system to a pay-for-value/health-promoting approach.

Accountable Care Organizations – structured along the same principles of prepayment, prevention, care coordination, integration between primary and specialty care, and a commitment to measuring and improving performance – have the potential to move the country forward on the path to true health care reform. And other models are likely to be developed in the future.

We’ve expanded health insurance coverage for Americans in a year and improved health care for millions. Now, it’s time to focus on improving the process of care delivery in America.

Medicare Advantage doesn’t solve all of today’s health care challenges, but it is a good start. And we can learn a lot from its success.

Reprinted with permission from Forbes.com.