Medicare to End the Only Demo that Actually Worked

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 in Doylestown, Pennsylvania:

Health Quality Partners’ results have been extraordinary. According to an independent analysis by the consulting firm Mathematica, 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 your household and every other household in the country a $1,200 tax rebate every year.

So what is the Department of Health and Human Services doing about this fascinating experiment? It’s going to close it down.

Think it over.
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…

Ah, and there’s the rub. 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, and who would know if their mother looked different than she had a few weeks ago. But few of today’s elderly live with their children. Many don’t even live in the same state, or they don’t have any contact with their children, or they don’t have 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…

Alert readers will recall that we have encountered something like this before. Remember the case of 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. [Do you know what the response has been to an online suggestion box where American public has made 86,000 suggestions for how the federal government can save money? Almost all of them have been completely ignored!] 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 ACO.

HQP has been notified that its pilot program will end in June. But there may be another option: privatization. Privatization? Yes. Through the Medicare Advantage program. We previously reported on IntegraNet of Houston, an independent practice association that services Medicare patients for Medicare Advantage insurers. In fact, IntegraNet does many of the same things HQP is doing. Here is what its president, Larry Wedekind, wrote me:

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.  The shared risk programs that many HMO’s have created in partnership with IPAs typically now incorporate home based programs like HQP and IntegraNet.

Innovare Health Advocates in St. Louis is another entity that contracts with MA 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.

Comments (16)

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  1. Devon Herrick says:

    Quality initiatives are difficult to assess. Many ideas that are designed to promote quality are merely inputs – tasks that do little other than create work. Yet, without guidelines it would be hard to disseminate what is learned about quality-enhancing procedures. I believe it is relatively difficult for a bureaucracy at the top to dictate quality. Quality has to be discovered by those working in the trenches. The bureaucracy at the top should be about communicating results, not designing programs.

  2. Cornelius Sutton says:

    So once again, the private sector is the solution! Big surprise! But this is honestly sickening. HHS’s actions, like most of the what the government does, is enough to make anyone cynical. Is there a room in a basement of some government building where a guy sits there and identifies any measures that will save money so that they can be eliminated?

  3. Kumar says:

    This is a fascinating post indeed. Again, why oh why won’t the government put supervision in the list of things they reimburse for!

  4. Kumar says:

    “Why should we pay for something we are already getting for free?” they asked. I am sorry, how is it free when we are really paying for it through higher taxes, or that we are about to be paying for it with higher taxes!

  5. Desai says:

    It seems that people like Dr. Brenner already figured out the solution to the health care crisis, and yet, we are still not paying attention to such basic solution. Consistent and continuous oversight is the solution for dealing with chronic medical patients.

  6. Sandeep says:

    I agree with Desai when he says, “consistent and continuous oversight is the solution for dealing with chronic medical patients.” The whole dilemma behind chronic patient is that for them it is a daily battle, and so, requires daily monitoring and aid, and so, this is the best way to go.

  7. Sadat says:

    Indeed, with 78 million baby boomers entering the market, Dr. Brenner’s model for care would be the most cost effective way to deliver such services, the question is, do we have the human capital to effectively deliver.

  8. Jordan says:

    Well there is a categorical fear of bottom up government. That’s the wonderful part about our system, we all have the right to be ignored or marginalized equally.

  9. Harley says:

    That’s a little harsh, Jordan, but I suppose that’s true. Really there were 86,000 suggestions — and not a single one of them had enough merit to implement? Boy, legislators must have really know what they were doing when they created this.

  10. Renee says:

    So many issues. Quality care should ultimately be addressed by those actually receiving care and those providing it. I agree that it is difficult for bureaucrats at the top to assess what is happing in the trenches.

  11. Ron says:

    Interesting post. The ongoing debate about how to fix our broken health care system is so divided that I honestly don’t have much hope.

  12. Joe S. says:

    Great post.

  13. Gabriel Odom says:

    The DC School Voucher program worked too, so they killed it:

  14. June O'Neill says:

    For several years my daughter who is a nurse practitioner in NJ worked for Evercare –a unit of United Health I think. Evercare is funded by Medicare. One of the main jobs of Evercare nurses working in nursing homes is to keep patients out of the hospital and I believe they are successful in doing that. Nurses ( at least the NPs) are well paid because they are called on to make judgments that may not end well—very old and ill patient dies. So they have to carry insurance. But mostly Not going to the hospital is a good thing for the patients. I don’t know how similar it is to the experiment you describe.

  15. Wanda J. Jones says:

    John and Colleagues:

    This is indeed an excellent post. I recall when I was a health planner in the San Francisco Bay Area that we were called upon to evaluate a grant made to a Black-run not for profit healthcare organization in Bakersfield, with a stated purpose of helping a Latino healthcare clinic get started. At the end of 2 grant years it had only paid out money for the expenses of the Board when they came to meetings. When I asked the Region IX PHS bureaucrat why they gave money meant to help Latinos to a Black Not for Profit, he answered “To see what would happen, I guess.”
    That remark has colored my view of government behaviors ever since.

    As to closing down Medicare Advantage, it’s in the name of keeping Medicare business out of the private sector as they want to shut down those private plans or at least control them. As a member of one such plan, I can attest that it is attentive, careful, and does behave in a form that shows they respect both their subscribers and their medical professionals. Except for the fact that they underpay for services that are hard for a patient to evaluate. I have received 6 cardioversions for Atrial Fibrulation. All successful. About 6 health professionals were involved in these procedures, which took about 3 hours, counting the hour of prep, the 15 minutes for the procedure and the 2 hours for observation. The hospital was paid under $500.00. I’ve protested to the business office, and will be writing to the health plan with a copy of my bill.

    It scares me to have HHS doing its best to knock out private health plans as they behave much more responsibly than do government plans. For an example of how government programs fail their clients, just observe the tens of thousands of VA patients who have waited 2 years or more for their benefits and an acknowledgment that they have a “Line of Duty” problem and can receive rehab.

    The only thing giving me hope these days is the effort in Congress to not fund the initial implementation of Obamacare.

    Keep up the pressure, John, but get it on the tube, too. The public does not know these things.

    With respect to all of you…

    Wanda J. Jones, President
    New Century Healthcare Institute
    San Francisco.

  16. Tom C says:

    This does not suprise me….unfortunatly the goal of Gov. is to expand. Bigger is always better. Gov. will never recognize positively a non Gov. program. Better more productive Gov. is not a goal as it does not increase their size but actually may decrease it through efficencies in productivity. Very sad!!!