The influential Congressional Budget Office (CBO) recently issued a disheartening report showing that 10 Medicare demonstration projects designed to reduce health care costs were largely ineffective. The results were surely discouraging, but perhaps not entirely surprising.
The report looked at six demonstrations focused on disease management and care coordination, and four focused on payment reform, in Medicare's fee-for-service program.
Disease management and care coordination programs aim to help patients with chronic illnesses learn how to monitor their symptoms and change their behaviors to manage their disease more effectively. Most importantly, care managers can help ward off health declines and avoid the use of expensive health care services. Payment reform programs change the financial incentives to reward health care providers for delivering high-quality care more efficiently.
Some useful lessons emerged from the disease management initiatives (for example, hospital readmissions and Medicare costs were lowered in the programs where care managers and physicians had more frequent and more in-person interactions with patients), but cost savings were not sufficient to offset the fees associated with the intervention.
On the payment reform side, one bright spot emerged: a bundled payment demonstration involving seven hospitals and associated physicians reduced spending by approximately 10%, without compromising quality. The other three payment reform demonstrations, which paid bonuses to health care providers who achieved certain quality or efficiency benchmarks, produced little or no savings.
How could this be?! Haven't all of the health care pundits -- even me -- been beating the drum that, if we really want to get health care costs under control, we need to do a better job with disease management, care coordination, and payment reform?
Well, yes. And I will continue to beat that drum.
What I take away from the unsuccessful demonstrations is not that we should throw up our hands and move away from care management and payment reform. Quite the opposite: we can't make meaningful change by tinkering around the edges of a broken system, so we need to get serious about an overhaul of our payment and delivery systems.
The CBO report says to me that we need:
- Real payment reform that eliminates the fee-for-service model. Today, our system rewards more care, not better care. A bundled payment approach, like the successful demonstration program evaluated by CBO, would encourage coordination of care, reduce unnecessary procedures and duplication of effort, and improve efficiencies. Here in New York, Montefiore Medical Center is steadily moving toward this model; Maimonides and NYU also are preparing to try out the bundled payment idea.
I see real promise and opportunity for big, bold changes in our health care system. Health care providers throughout New York State and across the country are experimenting with new models of health care payment and delivery -- health homes, patient-centered medical homes, accountable care organizations -- focused on reforming our current system, not just layering on new processes or making small tweaks. Not every experiment will work, not every intervention will be successful, but we have a unique window to try -- and maybe fail, and try again--to make meaningful, lasting change in our health care system.