The better Medicare Advantage/Part C plans provide high quality health care at a reasonable cost. They do so because their incentive structure is very different than the incentive structure of a fee for service provider. Avoiding illness and minimizing large problems is extremely desirable from a profit/loss perspective for a Medicare-C provider.
I had an interesting back and forth with BuckyDoc yesterday on Medicare Part C:
this isn’t merely about coding. It’s actually about providing care and improving outcomes.
So, imagine a patient with Type 2 diabetes with diabetes-related kidney problems. In a Part B practice, the physician may simply code 250.00 and do nothing more than refill her insulin. In a Part C practice, the physician is rewarded for recognizing the patient’s kidney problem and in so doing, is more likely to provide the care required to prevent those problems from progressing….
A good Part C plan has the incentive to manage chronic conditions better because it is on a capitated health management model while traditional Medicare is (mostly) still on a fee for service widget management payment model where a complication 6 months from now is a revenue opportunity instead of a cost-sink.
Most of Medice is still on a modified fee for service basis. Using Buckydoc’s example, a kidney problem for a diabetic is a revenue opportunity six months or eighteen months down the road. More visits leads to more billing, more treatment leads to more billing, more therapy leads to more billing. More billing leads to more blow and better hookers for the doctors.
However on a Medicare Advantage HMO plan, the plan gets a flat fee per person per month (capitation). Preventing the kidney problem and thus preventing $20,000 in follow-up visits leads to better hookers and more blow for the insurers which they tend to share in a variety of ways with the doctors.
Medicare is in the process of transitioning most of its payment structure from straight fee for service to something that is either tied to quality or tied to money at risk. The most notable attempt to do this is the Accountable Care Organization payment model.
Here provider groups are formed. They are usually led by either hospitals or primary care provider physician groups. These groups get a capitated payment that is supposed to take care of all the care needs of all of the members in the group. The same basic incentive structure of an HMO/Medicare Advantage plan applies. Treating root causes to avoid big crisis events should become more common. There is a bit of flexibility on funds that allow groups to spend money on non-medical needs (for instance air conditioners for people with congestive heart failure etc) to avoid hospitalization for preventable events.
The initial results on the Pioneer ACOs are promising as quality is up even as costs go down. The big question (and it is the same question for Medicare Part C plans) is whether or not the best provider groups are able to either expand their operational reach or disseminate best practices ina way that mediocre groups that are not yet in an ACO model or mediocre Medicare Part C plans can adapt.
Mary G
As someone who has had rheumatoid arthritis since 1979, I am deeply suspicious of the capitation model. My experience with HMOs was that the doctor was less interested in helping or healing and more interested in denying or obstructing access to procedures in order to keep the money for himself or herself or their shareholders.
Kylroy
@Mary G: Yeah, the whole thing is predicated on doctors recognizing risks and acting on them appropriately. Given a low probability of a high-cost complication if a moderately expensive treatment is not applied, a lot of doctors will hold off treatment and pocket the money regardless of what the math says.
That said, the model does tend to hold costs down while holding outcomes steady. But people hate it because it means they are being explicitly told no by their doctor far more often.
Lymie
“More visits leads to more billing, more treatment leads to more billing, more therapy leads to more billing. More billing leads to more blow and better hookers for the doctors.”
Because doctors are all men.
WereBear
It’s something everybody, doctor and patient and patient’s family, should get used to. Because it’s better, all around.
One of the reasons our end-of-life costs are so large is because of doctors feeling under pressure to “do everything possible” except it results in horrible quality of life issues for people, just at a time when peace and lack of pain are the most important goals.
Refusing a patient pain management to chase “one more” test or procedure or even surgery or off label drugs “just in case” it works is cruel and pointless.
And there’s this trend to use chemotherapy even as a patient should be ready for hospice, or to use it in an off label way that ignores its highly considerable downsides for the patient who has not consented to be used as an lab animal in this instance.
This is on the order of people demanding antibiotics for a viral issue. They have to be stopped for everyone’s own good.
Thoughtful Today
To expand on that BusinessWeek article that explained that the Veteran’s Administration, after increasing managerial oversight in the 90’s, provided better health care than any corporate insurance scheme.
It’s noteworthy that those managerial appointments were made by President Bill Clinton.
Smart oversight provided exceptional results from the Veteran’s Administration (which is the government running the hospitals, hiring the doctors, and providing the care, A.K.A. ‘socialized medicine’).
Current management of the V.A. has been … deplorable, but at least better than the management that created the Walter Reed Hospital scandal.
Nonetheless, solid management of the socialist health care system of the Veteran’s Administration provided stellar results.
Credit a Clinton for that.
Still, I think Bernie’s got the stronger stand on Veteran’s issues: http://feelthebern.org/bernie-sanders-on-military-and-veterans/#supporting-veterans
Jim
A lot of the discussion seems to be about “the best” this and “the best” that. It reminds me of the frequent discussions about education in the US. Someone will trot out a teacher or school that does very well at bringing out “the best” in its students. Soon the focus is on the process of how that came to be, rather than on the fact that it’s often the fact that it’s exceptional teachers and administrators who make the difference. Other schools with not-as-good teachers won’t achieve the same results, even if they follow the same processes. Same with medicine. Right now I have a urologist who I know has my long-term health as his main objective. My previous urologist, in a different city, was guided by profit (it took me a while to realize this). It will always be so. Despite the incentives we provide to the health-directed doctor, there will always be doctors who are able to game the system to maximize their own profits.
Richard Mayhew
@Lymie:
1) I’ve used “hookers and blow” as a generic reference to self-enrichment as a blithe throw-away line for entire time at Balloon Juice.
2) Not all hookers are female, nor are all users of prostitutes male (see Showtime via the Soup )
WereBear
@Richard Mayhew: That’s right! Hookers and blow are completely non-prejudicial in their application.
Omnes Omnibus
@Lymie:
Why can’t women enjoy hookers and blow as well?
WereBear
http://thinkprogress.org/economy/2012/12/05/1284131/women-pay-gap-persists/
Ruckus
@Lymie:
That’s funny. Of my last ten docs, including specialists, only 3 have been male. That is unless my powers of observation have been completely faulty. If I go back farther the same ratio holds.
mb
Seems to me the fact that we have to financially reward physicians so they will have an incentive to prevent the progression of disease in their patients rather than just treat symptoms suggests we have a bigger problem than what part of Medicare to reimburse out of. Our system has so corrupted the practice of medicine that we now have to coax physicians to do their job with extra bits of cash. It is really kind of disgusting.
WaterGirl
@WereBear: I have no problem with the term “hookers and blow” as a nice shorthand way to get the point across. From you comment, I can’t tell whether you are taking issue with the term or not.
But, more importantly, I just read last night that you have shingles. I am so very sorry to hear that. Anyone who is paying attention knows that shingles is incredibly painful, but my guess is that most of us who are lucky enough not to have shingles really have no concept of just how painful it really is. It sounds like you have some drugs that are helping, at least, I’m glad of that. Wishing you a quick road to recovery from here.
WaterGirl
Richard, I will be helping my brother-in-law sign up for Medicare this weekend – his birthday was June 8 so I understand that he doesn’t have much time left to sign up without penalties. I have read all your recent Medicare posts, and my takeaway about Part C (Medicare Advantage) is that it isn’t really something we should consider for him because he has multiple health issues so it would be very expensive.
He has a job with good insurance and unless something unexpected happens, he won’t be retiring for 2-3 years.
Does he sign up for Part A and Part B and Part D now (he takes a lot of prescriptions)? Or does he “sign up” with a start date down the road?
Richard mayhew
@WaterGirl: talk to an actual Medicare navigator.
2) if he had a lot of conditions part c might be a good deal as it caps his total expense.
Speak with an expert. Def not me
boatboy_srq
@WaterGirl: @WereBear: Ditto, and ditto [[hug]]. Shingles are no fun. Here’s to a speedy recovery.
Richard Mayhew
@WaterGirl:
#1 speak to a Medicare Navigator (might be known as SHIP counselors)
#2 — Medicare Advantage might be decent for your brother as it puts a cap on his total yearly expense.
Speak to an actual expert (I don’t count)
Kylroy
@WaterGirl: Continuing my tendency to speak out of turn on Medicare issues (I did administer a Part D plan for almost a decade)…
Regardless of his employer coverage, sign up for A and B. If he doesn’t have employer coverage he needs it, if he does most employers assume Medicare eligible employees take A and B and adjust their coverage appropriately.
As for D, that depends on his possible employer insurance. If the employer offers drug coverage, and it is considered equivalent to minimum Part D coverage, he does not need to sign up for Part D now. If not, or if his current coverage isn’t sufficient, get him a Part D plan that meets his needs; he’ll need to sign up before the end of September.
ETA: Oh yeah, I’m not an expert either. As Mr. Mayhew says, a Navigator is your best bet.
WereBear
@WaterGirl: @boatboy_srq: Thanks so much. And yes, it’s pretty dang bad.
My case was even more so, since I had two weekends in there where diagnosis/refills were delayed and I had to tough it out with makeshift pain relief methods. (ICE ICE ICE for one thing.) There’s no point in going to the emergency room for something like that.
But we seem to be settled into the glide path now, with the right meds at the right time. Two remaining snags: I can’t drive, and I have to wear long sleeves in the heat lest I frighten people.
WereBear
Neither do I :)
WaterGirl
@WereBear: Glad to know you are on the hoe stretch, but damn, I’m sorry you had to go through that. Especially without meds at first. Not being able to drive is particularly bad for you since I’m not sure Mr. WereBear drives at all.
WaterGirl
@Richard Mayhew: Thanks. Do the navigators and SHIP counselors work on weekends? Because that’s when he will be here, and I’m jus not sure he will get it done if I’m not part of it. :-(
WereBear
He does and he has, depending on how his erratic illness is treating him. It’s making me flippy, however. Independence is a big thing with me!
The Raven on the Hill
@Kylroy: ” But people hate it because it means they are being explicitly told no by their doctor far more often.”
@WereBear: “It’s something everybody, doctor and patient and patient’s family, should get used to. Because it’s better, all around.”
Yeah. My friend with intense ankle pain, who couldn’t get an x-ray for months, it was good for her.
The ankle was broken.
Meantime, my primary care physician prescribes unnecessary routine tests we can’t afford and tells me they’ll be covered by the ACA “preventative care” benefit. She’s wrong.
WereBear
@The Raven on the Hill: There’s no excuse for not getting an x-ray for months. I’m so sorry for your friend!
This created a greater problem.
And that’s not what we were talking about in the section that you quoted. Often, extra treatment is either wasted or actively harmful. My own partner has a mystery illness, and he didn’t mind diagnostic tests. What he minded were the offers of treatment when they didn’t know, and the treatments had serious downsides.
It’s like your friend with the ankle pain being offered chemotherapy. And such a scenario is not as farfetched as you think.
Kylroy
@The Raven on the Hill: As I said in my initial post: “…the whole thing is predicated on doctors recognizing risks and acting on them appropriately.”