MIAMI—Days before the House voted to repeal the health care overhaul, Secretary of Health and Human Services Kathleen Sebelius told a group of business leaders here that overhaul is inevitable, regardless of what lawmakers think.
“America lags behind in health outcomes,” she said. “We live sicker and die younger than we should. Too few of us get to watch our grandchildren grow up.”
She said she expects that to change under a new system built around coordination of patient care among providers, all following quality standards set by Uncle Sam.
“The government has for too long lagged behind the private sector in promoting improvements in health care,” she said.
Secretary Sebelius described her vision of tomorrow's health care system during the keynote address at the University of Miami's “The Business of Health Care: Defining the Future” three-day global business forum here.
Gone are the days of patients hopping from one doctor to the next, each physician with his or her own plans for tests and treatments, she said, noting that she envisions Medicare patients served by a primary-care medical home, which coordinates all of the patient's care.
Solo practitioners or groups acting as medical homes will form a network with specialists, hospitals, and other providers to create Accountable Care Organizations (ACOs). Each ACO will serve populations of 5,000 or more patients. Medicare's payment system will be overhauled to reward providers for keeping patients well, rather than just for testing and treating them when they're sick.
Final regulations on the Medicare Shared Savings Program are expected by the start of 2012, when Medicare will begin contracting with ACOs.
“[Existing] financial incentives reward re-admissions,” she said. “Hospitals keeping patients well after their release are penalized.”
Teamwork Key to Improving Care
Throughout the conference, dozens of other speakers also predicted an inevitable movement toward provider networks working to improve patient care while cutting costs. Although the HHS Secretary spoke mostly about Medicare, industry leaders said they envision ACOs also serving private insurers.
“Medicine is no longer an individual sport,” said panelist Delos Cosgrove, MD. As President and CEO of the Cleveland Clinic, Dr. Cosgrove manages one of the biggest teams in the league, with 3,000 physicians and 40,000 other employees. “Teams have grown because the amount of knowledge doubles every two years.”
Just what position oncologists play may vary with each team. The classic ACO is a multi-specialty network with primary care at the hub.
“Our vision of an ACO is broad coordination of care and focus on all the patients' needs,” said forum speaker Anthony Rodgers, Deputy Administrator of the Center for Strategic Planning with the Centers for Medicare and Medicaid Services. “The other issue is that they have to be able to manage at least 5,000 beneficiaries.”
This is the type of ACO that forum speaker Steven Jones, President and CEO of the Robert Wood Johnson University Hospital in New Jersey, has been building over the past year.
“Our ACO will have relationships with oncologists at the Cancer Institute of New Jersey,” he said, adding, though, that an ACO, by definition, is primary-care based.
US Oncology, however, is developing its own ACO of only oncologists. Like other ACOs, it will revolve around primary care. But in this case, oncologists will serve as primary-care providers as long as patients are undergoing treatment.
“Most general practitioners don't understand interactions with treatment and co-morbid conditions,” said Matt Brow, US Oncology Vice President for Government Relations and Public Policy. “Oncologists can manage the whole patient.”
Rewards for Wellness
The incentive for improving quality, Secretary Sebelius explained, will come from shared savings. She said the best health care saves money by keeping patients well. Medicare will give ACOs money they save on health care based on the expected cost of care.
“We're going to establish shared savings,” Mr. Rodgers said. “As the ACO improves quality, we expect costs to come down for reduced ER visits, admission rates, duplicative services. Physicians could get more money for making the system more efficient.”
To demonstrate the power of the purse, Sec. Sebelius cited Medicare's policy, started in 2008, of denying payments for “never events”—i.e., patient falls, objects left in patients after surgery, and other hospital mishaps that should never occur. When payment stopped, she said, such errors plummeted.
Electronic health records (EHRs) are a crucial element for tomorrow's health care, she emphasized. “They can help drive best-practice protocols and improve patient care.”
US Oncology has already demonstrated substantial costs savings from adopting evidence-based pathways that are embedded in members' EHR systems. Eight oncology groups in a study cut costs by 35% when they followed the pathways, noted Roy Beveridge, MD, US Oncology's Executive Vice President and Medical Director, who was not at the Miami meeting but was contacted afterwards for this article.
His pathways study (Marcus A. Neubauer, MD is first author) is available at http://www.usoncology.com/corporate/NewsRoom/USOncologyInTheNews/JOP%20NSCLC%20Neubauer.pdf
“You need the collaboration of ACOs to develop pathways that save money,” Dr. Beveridge said. “Our data showed that a process like this saves 30 to 35 percent on global costs on lung cancer and colon cancer, and we're looking at other cancers.pdf”
Another speaker, health industry analyst John Bigalke, Vice Chairman of Deloitte, said that as revolutionary as ACO shared savings may seem, “it's just the tip of the iceberg.”
“ACOs developed by CMS are the starting point,” he said. “We will see growth in this kind of model not only in the Medicare population, but ultimately in others like Medicaid and commercial products. It could move from a gain-sharing model to a full-risk capitation model.”
CMS's Rodgers suggested that he shares that vision: “We will evolve our payment methods so that ACOs take on more risk,” he said.
Secretary Sebelius ended her speech on the ironic note that support for health care reform is greatest among those whose health care has long since been reformed: “Enthusiasm for signing the Affordable Care Act is much more palpable internationally,” she said. And as accountable care takes shape, she hopes that enthusiasm will hit home.
Electronic Health Records Tied to Quality
The United States may not have the world's best health outcomes, but we can create the best system of electronic health records, HHS Secretary Kathleen Sebelius said during her keynote speech at the Miami forum.
“No one has tried to bring to scale nationally an entire system,” she said.
When President Obama took office, she noted, only about 10% of hospitals and 2% of physicians had EHRs. Many saw little need to invest in the technology, said Anthony Rodgers, Deputy Administrator of the Center for Strategic Planning with the Centers for Medicare and Medicaid Services. That's about to change, when CMS in May starts giving bonuses to providers who use EHRs.
Participating physicians can earn up to $44,000 over five years through Medicare. Some states are implementing a similar program for Medicaid providers in which physicians can receive up to $63,750 over six years. Providers may opt for one or the other incentive program, although not both.
Medicare will take its incentives one step further in 2015, by reducing payments to physicians and hospitals that aren't using EHRs.
The bonuses are a mere fraction of the savings that the HHS Secretary said she expects providers to realize from adopting EHRs, which, she predicted, will improve the nation's system of health care and with it, slash medical costs.
“EHRs reduce medical errors, medication errors, reactions to medications, and readmissions when information is shared with the hospital discharging the patient and his physician,” Mr. Rodgers said.
EHRs are a cornerstone of Accoun-table Care Organizations, which Secretary Sebelius described as the future of health care in this country.
“This will be the primary mechanism for doctors to communicate with other doctors,” Mr. Rodgers agreed. “If I were advising a doctor, I'd say invest now, because there is a learning period.”
One group of physicians who have seen the benefit of EHRs are the 1,000 US Oncology members using the iKnowMed system. Roy Beveridge, MD, Executive Vice President and Medical Director for the nationwide oncology network, credits the system with saving members $35,000 to $86,000 per year in lost revenues by improving charge capture. He also touts the system for alerting members to the latest studies.
“EMRs will tell you what research and trials are available,” he said. “The system is meant to be very interactive.”
Mr. Rodgers said he believes EHRs also will reduce malpractice risk: “Physicians in integrated systems seem to have less liability. We know that best practices drive [malpractice risk] down.”
To receive EHR bonuses, providers must use a system certified by CMS. Information about certified systems is available at the Office of the National Coordinator for Health Information Technology at http://onc-chpl.force.com/ehrcert.
The federal government recently established 62 regional extension centers to help physicians learn how to use the technology. To find a center near you, visit http://healthit.hhs.gov/portal/server.pt/community/healthit_hhs_gov__rec_program/1495/