By John Goodman
How much do you think Medicare will pay a doctor or a nurse for keeping a patient out of the hospital? Answer: zero.
That’s pretty amazing when you consider that Medicare’s hospitalization insurance (Part A) is spending about $250 billion every year. Yet it allocates not one thin dime for keeping-patients-out-of-the-hospital activities. If you go down the list of about 7,500 tasks that Medicare pays doctors to perform, you’ll discover that reducing hospitalization just isn’t there.
What brings this to mind is an Ezra Klein post describing a Medicare pilot program managed by Health Quality Partners (HQP) in Doylestown, Pa.: Health Quality Partners’ results have been extraordinary. HQP has reduced hospitalizations by 33 percent and cut Medicare costs by 22 percent. To put that in perspective, if HQP activities were replicated nationwide we would save about $122 billion a year. If we didn’t need the money to reduce the deficit, with that kind of savings the federal government could give every household in the country a $1,200 tax rebate every year.
So what is the Department of Health and Human Services (HHS) doing about this fascinating experiment? It’s going to close it down.
Stop. Think it over. How exactly does HQP manage to work so well? Basically, by sending nurses to the homes of elderly patients – even if they’re healthy. For the most part, the medical system treats the old very much like it treats the young. It cares for them when they’re sick and ignores them when they’re well.
HQP’s Ken Coburn takes a different approach. He doesn’t really believe in “better,” at least not for elderly, chronically ill patients. He wants someone going over frequently to see if they’re depressed, if their color is good, if they understand their medications, if there’s anything they need. This isn’t medicine so much as it’s supervision.
If you go down the list of tasks Medicare pays providers to do, guess what else is not on the list? Supervision.
At another time, these functions would have been filled by the family, who would be right in the other room. But few of today’s elderly live with their children. A recent study in the Proceedings of the National Academy of Sciences found that after adjusting for demographic factors and underlying health, social isolation increased the likelihood of death among the elderly by a stunning 26 percent.
We have encountered something like this before: Dr. Jeffrey Brenner, who is saving Medicare and Medicaid millions of dollars every year by essentially engaging in a lot of social work activities (something else that’s not on Medicare’s task list) for high cost patients. As I suggested previously, Medicare should let Brenner keep at least 10 or 20 cents from every dollar he saves the taxpayer. Let him become a millionaire. Then it should tell every other doctor in the country that they, too, can get rich if they can think of ways to save taxpayers money and raise the quality of care for patients at the same time.
Of course, the Obama administration ignored my idea. I didn’t get anywhere with the Bush administration either. “Why should we pay for something we are already getting for free?” they asked.
Brenner is able to continue doing what he does only by cobbling together some foundation money, garnered from private sources. The Obama administration won’t deal with him unless he agrees to become an Accountable Care Organization (ACO).
HQP has been notified that its pilot program will end in June. But there may be another option: privatization through the Medicare Advantage program. IntegraNet of Houston, an independent practice association that services Medicare patients for Medicare Advantage insurers, does many of the same things HQP is doing. Its president, Larry Wedekind, wrote, “HQP is right on target with their home based nursing program. Yes, this is a portion of what we do. It is probably the most important part of what we do. We have found that our phone- based case and disease management program works well only when we have sent a Nurse Practitioner or nurse to the home first. We are also working on expanding our home based program to include the funding by our HMO partners of multiple home visits by nurses and CHWs [certified health workers] following the initial Nurse Practitioner visit, although we have funded the effort ourselves in the past. This home based nursing program is care coordination at its finest when a Nurse Practitioner goes to the home first and then a nurse or CHW follows-up.”
Innovare Health Advocates in St. Louis is another entity that contracts with Medicare Advantage plans. Its 4,500 patients are ranked as sicker than average (using Medicare’s risk adjustment formulas), but its hospitalization rate is one-third lower than Medicare’s national average.
Commenting on HQP, Innovare’s president, Dr. Charles Willey, says, “They do a part of what we do, that is, send nurses to the home of high-risk chronically ill. We do this on a select basis where there is real trouble with understanding or with resources. We handle most of it in a more traditional office visit. We follow the patients everywhere, hospital, rehab, home and office. We pay attention to those we believe are most vulnerable.”
Fortunately, HHS cannot cancel these private sector plans.
John C. Goodman is President and CEO of the National Center for Policy Analysis (NCPA) and a senior fellow for the Georgia Public Policy Foundation, an independent, state-focused think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.
©Georgia Public Policy Foundation (May 3, 2013). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.
The Foundation should take a lot of pride in your influence on Georgia governmental policy over the past several years. If you look back on several things that you were crying in the wilderness about several years ago, you will find that Governor Miller adopted them…your influence and your pressure on that process has been a major factor in governmental policy in Georgia. You should be congratulated.