[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
USING INNOVATION TO REFORM MEDICARE PHYSICIAN PAYMENT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
JULY 18, 2012
__________
Serial No. 112-167
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
?
COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York
MARY BONO MACK, California FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina GENE GREEN, Texas
Vice Chairman DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma LOIS CAPPS, California
TIM MURPHY, Pennsylvania MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire MIKE ROSS, Arkansas
PHIL GINGREY, Georgia JIM MATHESON, Utah
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington DORIS O. MATSUI, California
GREGG HARPER, Mississippi DONNA M. CHRISTENSEN, Virgin
LEONARD LANCE, New Jersey Islands
BILL CASSIDY, Louisiana KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia
7_____
Subcommittee on Health
JOSEPH R. PITTS, Pennsylvania
Chairman
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois EDOLPHUS TOWNS, New York
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina LOIS CAPPS, California
TIM MURPHY, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
PHIL GINGREY, Georgia TAMMY BALDWIN, Wisconsin
ROBERT E. LATTA, Ohio MIKE ROSS, Arkansas
CATHY McMORRIS RODGERS, Washington JIM MATHESON, Utah
LEONARD LANCE, New Jersey HENRY A. WAXMAN, California (ex
BILL CASSIDY, Louisiana officio)
BRETT GUTHRIE, Kentucky
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
(ii)
C O N T E N T S
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Page
Hon. Joseph R. Pitts, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 3
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 4
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 5
Hon. Phil Gingrey, a Representative in Congress from the State of
Georgia, opening statement..................................... 6
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 7
Hon. John D. Dingell, a Representative in Congress from the State
of Michigan, opening statement................................. 8
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 136
Witnesses
Scott P. Serota, President and Chief Executive Officer, Blue
Cross and Blue Shield Association.............................. 9
Prepared statement........................................... 12
Bruce Nash, Senior Vice President and Chief Medical Officer,
Capital District Physicians' Health Plan....................... 36
Prepared statement........................................... 38
David L. Bronson, President, American College of Physicians...... 42
Prepared statement........................................... 45
David B. Hoyt, Executive Director, American College of Surgeons.. 72
Prepared statement........................................... 74
Kavita Patel, Fellow, Engelberg Center for Health Care Reform,
The Brookings Institution...................................... 87
Prepared statement........................................... 89
Submitted Material
Statement, dated July 18, 2012, of Garrison Bliss, President,
Qliance Medical Group, submitted by Mr. Pitts.................. 102
Letters of March 30, 2011, from Ms. Sebelius to Mr. Pallone and
Mr. Waxman, submitted by Mr. Pallone........................... 131
USING INNOVATION TO REFORM MEDICARE PHYSICIAN PAYMENT
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WEDNESDAY, JULY 18, 2012
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:02 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Joe Pitts
(chairman of the subcommittee) presiding.
Members present: Representatives Pitts, Burgess, Shimkus,
Rogers, Murphy, Blackburn, Gingrey, Latta, McMorris Rodgers,
Lance, Cassidy, Guthrie, Pallone, Dingell, Towns, Engel,
Schakowsky, Christensen, and Waxman (ex officio).
Staff present: Julie Goon, Health Policy Advisor; Debbee
Keller, Press Secretary; Ryan Long, Chief Counsel, Health;
Katie Novaria, Legislative Clerk; John O'Shea, Professional
Staff Member, Health; Andrew Powaleny, Deputy Press Secretary;
Chris Sarley, Policy Coordinator, Environment and Economy;
Heidi Stirrup, Health Policy Coordinator; Phil Barnett,
Democratic Staff Director; Alli Corr, Democratic Policy
Analyst; Amy Hall, Democratic Senior Professional Staff Member;
Karen Lightfoot, Democratic Communications Director and Senior
Policy Advisor; Karen Nelson, Democratic Deputy Committee Staff
Director for Health; and Roger Sherman, Democratic Chief
Counsel.
Mr. Pitts. The subcommittee will come to order. Chair
recognizes himself for an opening statement.
OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
There is no disagreement that the current Medicare
physician reimbursement system, the Sustainable Growth Rate, or
SGR, is broken. Time and again, Congress has had to override
scheduled cuts in physician reimbursement to avert disaster,
and we will have to do it again before the end of this year.
Absent congressional actions, physicians will face a 27 percent
cut starting January 1, 2013.
There is also no disagreement that the SGR needs to be
replaced with something that actually is sustainable, and
reimburses for outcomes and quality instead of just volume of
services.
The focus of today's hearing is not the well-documented
deficiencies of the current system, it is about the future.
What should the new physician payment system look like, and
what can we learn from the private sector's experience in this
area that may serve as a roadmap for reform? What has been
tried and failed, and what has worked?
Our witnesses today are here to share with us the
innovative payment systems and care delivery models they have
experimented with, and their outcomes. I want to thank all of
them for their testimony.
So thank you. I yield the remainder of my time to the vice
chairman of the subcommittee, Dr. Burgess.
[The prepared statement of Mr. Pitts follows:]
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OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Burgess. I thank the chairman for the recognition. It
has been a very interesting congressional term. We are now 18
months into it. I think this term I have seen more work done on
this problem than I have at any other time that I have been in
Congress, but we are still pretty far away from the goal that
we expect to achieve. Everyone on both sides of the aisle
accepts the premise of the SGR has got to go. The conversation
about actual innovative replacements that providers in the
future--and really, I do want to ensure, my vision is that
people will have options, that they will not see a ``one size
fits all'' that we think is best for their practice, but they
will actually be able to choose the option that is best for
their practice. But in the meantime, we have got to sketch out
the means by which to ensure that Medicare beneficiaries can
continue to see their physicians.
We have been in the process of testing models for years.
The witnesses at the table also have been in the process of
developing models for some time, and we expect that they are
going to have some interesting ideas to share with the
committee, and look forward to that.
But we have got a cut coming in just a few months, and a
lot of uncertainty as we face elections, while we face
expiration of existing tax policy, we have the payroll tax
holiday ending, we face unemployment insurance needing to be
extended, and oh yes, who can forget all the collegiality that
existed in this body a year ago with the discussion of the debt
limit? We are likely to face that again, but this time, without
all of the good feeling that we all had last August.
We could have taken this problem and moved it a little
farther away from December, recognizing that December is going
to be such an uncomfortable month for so many reasons. I had--
many members of this committee had asked for a 2-year extension
in December of last year. A 2-year extension passed without a
lot of other things attached to it so that it would be sure to
pass. In fact, we could probably do it on suspension on a
Monday afternoon. But I didn't get that. We didn't get that.
You didn't get that. And as a consequence, we got a 1-year
extension or what ended up being a 1-year extension that
expires in the middle of this fiscal holocaust at the end of
the year.
So all I would suggest is we know that we are not likely to
end up doing something that will provide that long-term relief
and long-term replacement for the Sustainable Growth Rate by
December 31. I wish we could, but I have been here long enough
to know that that is a goal that is going to be difficult to
achieve. But what I would like to suggest is this month, before
the August recess, the House of Representatives could pass yet
an additional extension to give us that 2 years that we asked
for in December of last year so that we have time to fully vet
and evaluate the proposals that are before us. The committee
staff has done a good job in developing some of these ideas. It
is now up to us to take them to doctors across the country and
get their feedback so we get the best possible policy. So I
will be introducing that legislation later today or this week
to extend the SGR for an additional year.
Mr. Chairman, I thank you for the recognition. I will yield
back to you the time.
Mr. Pitts. The chair thanks the gentleman and now
recognizes the ranking member of the subcommittee, Mr. Pallone,
for 5 minutes for an opening statement.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman. Let me associate
myself with the remarks of Dr. Burgess. Of course, I don't know
how he is paying for the 2-year extension, so I won't associate
myself with that until I see what the pay-for is. But I think
that what he said overall is very true. I think we have to be
very honest with the physician community. We all agree that the
SGR needs to be replaced, but you know, the question is is
there political will to do that, and whether or not it can be
done effectively by the end of the year with all these other
problems that need to be addressed out there? It is very
questionable. I don't have any doubt that this committee and
the members of this committee would like to accomplish that,
but I don't know whether or not the House or the GOP
leadership, you know, would be willing to put it on the agenda
for a long-term fix.
I want to, though, go beyond what Dr. Burgess said and say
that I also think we have to be very careful that when we talk
about pay-fors, because pay-fors, it is not only a question of
the new formula, but also the pay-for. I think we have to be
very careful. We need a pay-for that is big. I have always
suggested the overseas contingency operation fund, or the PEACE
dividend, as it is called, for the pay-for, because we need a
large amount of money. I think that this idea of constantly
picking at other providers, whether it is hospitals or nursing
homes, home health care providers, is not the way. It bothers
me many times when I hear other physicians say, ``Well, you
know, we can take it from other parts of the health care
system.'' I don't see that. And I would also warn my GOP
colleagues that I certainly will not support, and I think it is
useless politically, to try to take the money away from the
Affordable Care Act. You know, I don't want to say for sure,
but so many times the answer has been, ``Oh, you know, let us
get rid of the prevention fund, let us get rid of the community
health centers, let us get rid of, you know, the subsidies or
the tax credits that would make premiums more affordable for
certain incomes.'' That is not the answer. I think that the
health care system is in crisis, and the other providers have
the same problems. And so for us to suggest that we are going
to, you know, go after the ACA or other providers I think is
really a huge mistake.
So the question remains, how do we fix it? I don't think
there is a ``one size fits all'' approach. Any new payment
system should rely on improved outcomes, quality, safety, and
efficiency. In addition, while there must be fee-for-service
within the future payment system, we must stop rewarding
doctors for volumes of services. Primary care must be
strengthened and given special consideration, and a new system
must better encourage coordinated care while incentivizing
prevention and wellness within the patient.
Now, there a number of innovative programs that are
currently underway across the country. We will hear today from
two private payer plans that are learning and building on
successes from such initiatives as pay-for-performance,
patient-centered medical homes, bundle payments, and of course,
arrangements with accountable care organizations. Many of these
initiatives recognize the local needs of their marketplaces,
which is something worthy of consideration moving forward.
Local markets have different needs, and while one payment model
may work in New Jersey, it doesn't necessarily work in Montana.
While we are eager to hear from the private sector, we
mustn't forget about the delivery system reforms already
underway in the public sector. The Center for Medicare and
Medicaid Innovation created by the Affordable Care Act gives
CMS the ability to pursue many similar demonstration programs
in both Medicare and Medicaid. Currently they are testing a few
new models, including ACOs in the patient-centered medical
homes. The ACA also strengthens incentives for reporting on
quality measures for physicians. Meanwhile, in 2011, Medicare
began paying a 10 percent incentive payment of primary care
physicians for primary care services nationwide.
So together, the public and private sectors can and should
work together to get the health care system on a better path to
sustainability. I look forward to hearing today about the
exciting work being done in this field. I want to thank our
witnesses. I want to especially note the American College of
Surgeons who have taken a leading role on conceptualizing a new
proposal to replace the SGR, which they are going to talk about
today.
And again, Mr. Chairman, I think this is a very important
hearing. I appreciate your having it. This committee has worked
effectively on dealing with the--with PDUFA and other things on
a bipartisan basis. I think we can do the same here.
I am sorry, I guess I am out of time.
Mr. Pitts. The chair thanks the gentleman. I now recognize
the gentleman from Georgia, Dr. Gingrey, for 5 minutes for
opening statement.
OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF GEORGIA
Mr. Gingrey. Mr. Chairman, I won't take the entire 5
minutes, but thank you for recognizing me.
The Sustainable Growth Rate we all know is broken and none
of us support it, and it must, must go. Therefore, I look
forward to the testimony of those here today, our witnesses, on
what payment models might be used to replace SGR.
I do want to mention one thing. House Republican physicians
worked very closely with the House leadership last year to put
forward a multi-year SGR patch. I think my colleague as I
walked in, Dr. Burgess, was talking about that. It wasn't the
full repeal that I wanted, but it ensured some level of
stability for physicians and our patients. Ultimately we
couldn't get the Senate on board and it failed, as you all
know.
Now we find ourselves facing SGR cuts again in January of
what, 27.4 percent if something is not done. I urge this
Congress to put partisan and election politics aside, and let
us work together to get rid of SGR once and for all.
I don't agree with my colleague from New Jersey, the
ranking member of the Health Subcommittee, in regard to the
pay-fors, and that--but I do agree with him that that is a huge
problem, how we are going to pay for the cliff. The last figure
I saw of that cliff to bring the baseline back down to zero was
something of the magnitude of $300 billion, but that OCO money
we talked about and that got kicked around by the Super
Committee, overseas contingency operation, honestly from my
perspective, it really looks like funny money, very much like
funny money. You can't convince me that it isn't. I agree with
Mr. Pallone and his concerns, of course, about goring--oxing
the gore or goring the ox or whatever of other providers within
the Medicare program. Every one of them are concerned about
cutbacks and taking money out of--whether it is home health
care or hospice or whatever. I agree with him on that point,
but I am not for OCO money.
I will just conclude by saying that myself and the GOP
Doctors Caucus, my colleagues, 21 of us, will be working with
leadership again in the House, and also with our Democratic
colleagues, because there is no way to get this done in a one-
party, Majority party effort. This has got to be done in a
bipartisan way. And indeed, the House can't fix the problem
alone. It has to be bicameral.
So Mr. Chairman, thank you for calling the hearing together
today. This hearing is hugely important. We can all work
together--we have to to get this done, and I am looking forward
to this expert panel of witnesses.
I yield back, Mr. Chairman.
Mr. Pitts. Is there anyone else seeking time on this side
of the aisle?
If not, the chair thanks the gentleman and recognizes the
ranking member of the full committee, Mr. Waxman, for 5 minutes
for opening statement.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you very much, Mr. Chairman. I would like
to start by acknowledging and welcoming the bipartisan interest
in transforming the Medicare physician payment system from one
that focuses on rewarding volume to one that focuses on
rewarding quality and outcomes.
While Congress has yet to come to a bipartisan agreement on
how to accomplish the shared goal of repealing and replacing
the flawed Sustainable Growth Rate, SGR, mechanism, there seems
to be bipartisan agreement that it should be done. We must find
a way to end the unsustainable system of cuts that loom over
our physicians every year. The uncertainty created by the
current system serves no one well: the physicians who have no
stability in payments, the beneficiaries who worry about access
to their doctors, and even Congress. Even more encouraging is a
bipartisan agreement that delivery system reforms, many of
which were included in the Affordable Care Act, hold promise in
a post-SGR world. We must work towards a new way of paying for
care for both physicians and other providers that encourages
integrated care, improving care for individuals, improving care
for populations, and reducing costs.
Right now, the way we pay for care doesn't always support
these goals. The Affordable Care Act makes major strides to
improve the way Medicare deals with physicians and other
providers. Some of the new care models supported by the ACA
include Accountable Care Organizations, bundled payments,
medical homes, and initiatives that boost primary care and
encourage paying for value and outcomes, not volume. As we will
hear today, the private sector is exploring these avenues as
well.
I yearn for the day when the Republicans knew how to handle
this problem. They simply extended the SGR payments and didn't
pay for it. They didn't do a lot of things to pay for what they
charged to the taxpayers of the United States towards the
Medicare prescription drug benefit, SGR, didn't pay for it. Now
they want to be sure that every way to pay for this is
airtight. Well, it is a new day where Republicans are giving us
their fiscal responsibility side of things. We need to work
together. Our goal should be to enact a permanent repeal to the
existing flawed physician payment system this year. Let us do
it this year. We had chances to do it, as Mr. Burgess pointed
out, but we couldn't get the Republican leadership, his
Republican leadership, to go along with what he and we wanted.
So it is time for the Republican leadership to recognize this
is a problem that we ought to resolve, not just, well, I guess,
not just kick it down the road, but I guess we would be
satisfied just for that for a couple years.
But we got to get on with the job of doing what is
responsible. I want to yield the balance of my time to Mr.
Dingell.
OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Dingell. Mr. Chairman, I thank the gentleman from
California for his kindness to me. I have a splendid statement.
I ask unanimous consent that the fullness of it be inserted in
the record.
Mr. Pitts. Without objection, so ordered.
Mr. Dingell. I commend my colleagues on the Republican side
for their desire to keep Medicare fiscally solvent to address
the SGR problem, and to see to it that we fix the concerns of
the medical profession in seeing to it that they are properly
compensated. Their complaint is a real and a valid one, and it
is a thing to which we should pay heed.
As any good physician will tell you, we need to cure the
underlying problem, not to just treat the symptoms, and the
patchwork job that we have done in addressing these problems
over the years has done nothing but to create a growing and
painful problem, which gets worse and worse as time passes. So
curing the matter for once and all with proper attention from
this committee, as we have done in the past and in a bipartisan
fashion, is the way out of this thicket.
I commend my colleagues on both sides of this, and I look
forward to working with them towards that very important end.
Thank you, Mr. Chairman.
Mr. Pitts. Chair thanks the gentleman, and now will
introduce today's panel. First, Mr. Scott Serota is President
and Chief Executive Officer of Blue Cross Blue Shield
Association. Second, Dr. Bruce Nash is Senior Vice President
and Chief Medical Officer of the Capital District Physicians'
Health Plan. Thirdly, Dr. David Bronson is President of the
American College of Physicians; then Dr. David Hoyt is the
Executive Director of the American College of Surgeons; and
finally, Dr. Kavita Patel is the Managing Director for Clinical
Transformation and Delivery at the Engelberg Center for Health
Care Reform at the Brookings Institution.
Your written testimony will be made matter of the record.
We ask that you summarize in 5 minutes. Mr. Serota, you are
recognized for 5 minutes for your opening statement.
STATEMENTS OF SCOTT P. SEROTA, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, BLUE CROSS AND BLUE SHIELD ASSOCIATION; BRUCE NASH,
SENIOR VICE PRESIDENT AND CHIEF MEDICAL OFFICER, CAPITAL
DISTRICT PHYSICIANS' HEALTH PLAN; DAVID L. BRONSON, PRESIDENT,
AMERICAN COLLEGE OF PHYSICIANS; DAVID B. HOYT, EXECUTIVE
DIRECTOR, AMERICAN COLLEGE OF SURGEONS; AND KAVITA PATEL,
FELLOW, ENGELBERG CENTER FOR HEALTH CARE REFORM, THE BROOKINGS
INSTITUTION
STATEMENT OF SCOTT P. SEROTA
Mr. Serota. Thank you, Mr. Chairman.
Mr. Pitts. Poke that button there.
Mr. Serota. Sorry about that. I will try again.
Thank you, Chairman Pitts, Ranking Member Pallone, and
members of the Health Subcommittee for inviting me here to
testify today. I am Scott Serota, President and Chief Executive
Officer of the Blue Cross Blue Shield Association, which
represents 38 independent community-based Blue Cross Blue
Shield companies that collectively provide health care coverage
for 100 million Americans. I commend the subcommittee for
convening today's hearing.
Blue Plans are leading efforts in their communities to
implement payment, benefit, and delivery system reforms that
will improve quality and reign in costs. We believe that
Medicare cannot only learn from, but also should align with
these successful initiatives.
Today, I would like to focus on three interrelated
strategies. First, Blue Plans are changing payment incentives
by putting place models that move away from fee-for-service and
link reimbursement to quality and outcomes. The goal is to
promote patient-centered care that pays for desired outcomes,
rather than the number or intensity of service. These payment
innovations include pay-for-performance initiatives, bundle
payment arrangements in more than 32 States, arrangements with
accountable care organizations in 29 States, and patient-
centered medical homes, with Blue Plans collectively supporting
the Nation's largest network of medical homes in 39 States.
These models are driving substantial improvements in care
quality, while taking avoidable costs out of the system. For
example, CareFirst Blue Cross Blue Shield's Medical Home
Initiative includes 3,600 primary care physicians and nurse
practitioners caring for one million members. Preliminary 2011
results indicate that 60 percent of the eligible primary care
panels earned outcome incentive awards, which are based on a
combination of savings achieved and quality points. Among these
panels, costs were 4.2 percent less than expected. In
Pennsylvania, Highmark Blue Cross Blue Shield's Quality Blue
pay-for-performance program has prevented 42 wrong-side
surgeries, reduced hospital-acquired infections, raised breast
cancer screening rates nine points above the national average,
all while saving $57 million over 4 years.
Our second strategy is to partner with clinicians to give
them individualized support to be successful under new payment
and care delivery models. This includes sharing data about a
patient's full continuum of care, helping improve the way care
is delivered, enhancing care coordination, and providing
powerful health IT capabilities.
For example, a powerful way to improve the quality of care
for beneficiaries with chronic illness is to enhance care
coordination. Horizon Blue Cross Blue Shield of New Jersey has
partnered with Duke and Rutgers Universities to train at least
200 nurses as practiced-based population care coordinators in
medical homes and other settings. This first of its kind nurse
training curriculum recognizes the workforce enhancement
necessary to enable a statewide expansion of medical homes.
None of these innovations would succeed without our third
strategy, engaging patients. This includes providing
information on cost and quality to help patients make informed
decisions about their care, tiered benefit designs that
encourage patients to seek care from high quality providers,
and tools for members to improve their health and wellness. For
example, Blue Cross Blue Shield Association's national consumer
cost tool lets members obtain information on estimated costs
for more than 100 of the most commonly billed elective
procedures for hospitals, ambulatory surgery centers, and
freestanding radiology centers in nearly every U.S. zip code.
In addition, Blue Plans are using health informatics from a
database of claims data for more than 110 million individuals
nationwide collected over a 7-year history. The analytics
capability made possible by Blue Health Intelligence, or BHI,
are resulting in healthier lives and more affordable access to
safe and effective care. For example, BHI collaborated with
Independence BlueCross in Pennsylvania to determine the best-
performing facilities in bariatric surgery. Looking at 3 years
of data, BHI analyzed potentially avoidable complications at
214 facilities and identified Pennsylvania's Crozer-Chester
Medical Center as having an extraordinarily low complication
rate for bariatric surgery, just four-hundredths of a percent
compared to the nationwide average of 6.7 percent. We
designated Crozer as a best-in-class provider in this specialty
under the Blue Distinction Initiative, which encourages
patients to seek care from high-quality providers.
Achieving a high-Squality, affordable care system will
require a multi-faceted approach, using all the strategies that
I have outlined. Sustaining and building on these successes
will require a continuously evolving approach of fine-tuning
strategies and implementing new ones. We believe a compelling
opportunity exists to accelerate Medicare's adoption of these
private sector initiatives. Payment approaches and technical
assistance must be adapted to fit local delivery system
conditions, which vary widely. This assumes patients can meet
practices where they are, rather than attempting to overlay a
one size fits all solution that may not be workable. The time
is right to accelerate the pace of reform for Medicare, and we
are pleased that Blue Plans are participating in pilots to test
these approaches, and urge successful approaches be expanded
rapidly beyond pilot markets.
I appreciate the opportunity, Mr. Chairman. Thank you very
much.
[The prepared statement of Mr. Serota follows:]
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Mr. Pitts. Chair thanks the gentleman. I now recognize Dr.
Nash for 5 minutes for an opening statement.
STATEMENT OF BRUCE NASH
Mr. Nash. Good morning. My name is Bruce Nash, and I am the
Chief Medical Officer of Capital District Physicians' Health
Plan, which is based in Albany, New York. CDPHP, as we are
known, is a not-for-profit physician-sponsored network model
plan with close to 400,000 members who live in the 24 counties
in upstate New York. We are the capital district's largest
provider of managed commercial Medicare and Medicaid products.
I also serve as the Chairman of the Medical Directors' Council
for the Alliance of Community Health Plans, or ACHP, whose
members include 22 of the Nation's leading non-profit regional
health plans, who share our commitment to the Triple Aim, a
concept created by the Institute for Health Care Improvement,
that is improving the patient's experience of care, improving
the health of populations, and reducing the per-capita cost of
care.
CDPHP was founded by the physicians of the Albany County
Medical Society 28 years ago, and to this day is governed by a
board whose majority are practicing physicians who are elected
by their peers. Our board chair is also required to be a
practicing physician. As a consequence, we have enjoyed a close
relationship with our provider community, enabling us to deploy
market-leading initiatives that improve the care delivery for
our members, despite not directly employing any of the
clinicians. This has led to us being recognized as a top-ranked
health plan in the State and the Nation for our member
satisfaction and quality metrics.
Four years ago, our board emerged from a strategic planning
session with a directive for management to address the
impending primary care crisis. It was noted that our local
medical school was no longer graduating significant numbers of
new physicians who were choosing primary care as a career.
While the causes for this were multiple, we chose to focus on
improving a primary care physicians' income potential. It was
clear that for this to be accomplished it would have to be
funded by changing the way physicians practice with more
effective and efficient care as a result. This began the
program that we later labeled our Enhanced Primary Care
program, or EPC.
We began with an initial pilot of three practices, and over
a 2-year period of time were able to demonstrate an improvement
in 14 of 18 specific quality metrics; a 15 percent reduction in
hospital utilization; a 9 percent reduction in emergency
department usage; a 7 percent reduction in the use of advanced
imaging. All of this resulted in an $8-per-member-per-month
savings in total health care costs.
On the strength of these early data, CDPHP expanded its EPC
program by establishing training programs for selected
practices lasting 12 months and requiring significant
commitment of time and effort from the practices as they
learned the basics of Enhanced Primary Care. We currently have
75 such practices, representing 384 providers and almost
100,000 of our members. We are now launching our next cohort
which will add an additional 70 practices.
While much of what I have described is common to many
successful patient-centered medical home initiatives
nationally, we believe our unique contribution to this effort
has been the creation and deployment of a novel reimbursement
methodology. This model involves a risk-adjusted global payment
for all services that the physician provides, in conjunction
with a significant bonus based upon the elements of the Triple
Aim, the patient's experience of care, the quality, and the
cost efficiency. It creates an opportunity for a physician to
enhance his or her reimbursement by an average of 40 percent.
Our base payment is a unique global payment to the practice
for each of their patients. This is driven by a severity factor
that was developed for our use by the scientists associated
with Verisk Health, Inc., a global analytics firm. This
severity score predicts the amount a primary care physician
should be paid for a specific patient based upon the diagnoses
of that patient. This score is then multiplied by a conversion
factor to determine the payment for that given patient based
upon their plan type, that is, Commercial, Medicare, or
Medicaid, and we pay this to the practice on a monthly basis.
We still pay fee-for-service for a small subset of
physician services, about 15 percent. These payments represent
things that we would like to incent the primary care physicians
to do in their office as opposed to referring to a specialist,
such as minor skin biopsies, or for the acquisition cost of
things like immunizations.
The bonus or pay-for-performance aspect of the model is
focused on the Triple Aim. We measure the satisfaction of the
practice's patients to determine bonus eligibility for the
practice. Currently we utilize HEDIS metrics to measure the
quality of care delivery. A weighted average of 18 distinct
metrics creates a quality score for the practice. Our
efficiency metric is an output of our Impact Intelligence
software, which accomplishes the required risk adjustment
across the total cost of care. The annual bonus payment to a
practice is determined in a manner that has been described as a
``tournament'' system, simply said, practices need to perform
better than other practices in the network to achieve their
optimal payout.
Our initial data for the EPC program was based on a
population of only 12,000 members. We are fortunate that the
Commonwealth Fund has provided a grant to an external
evaluator, Dr. David Bates of the Brigham and Women's Hospital,
to evaluate our 2012 experience. These data will become
available in the latter half of 2013.
CDPHP has also been active in the development of
alternative reimbursement models for certain specialist and
hospital partners. While we have yet to develop the experience
that we have with the EPC program, we firmly believe that all
components of the delivery system need to engage with us in
payment models that align financial incentives with the needs
of our communities.
Thank you for inviting me to be here today, and I look
forward to your questions.
[The prepared statement of Mr. Nash follows:]
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Mr. Pitts. Chair thanks the gentleman, and now recognizes
Dr. Bronson for 5 minutes for opening statement.
STATEMENT OF DAVID L. BRONSON
Mr. Bronson. Good morning. I am David Bronson, President of
the American College of Physicians, the Nation's largest
medical specialty organization, representing 133,000 internal
medicine specialists who care for patients in primary and
comprehensive care settings, internal medicine subspecialists,
and medical students who are considering a career in internal
medicine. I reside near Cleveland, Ohio. I am Board-certified
in internal medicine and practice at the Cleveland Clinic on
the downtown campus. I am also President of Cleveland Clinic
Regional Hospitals, and a Professor of Medicine at the
Cleveland Clinic Lerner College of Medicine of Case Western
Reserve University. Thank you very much for allowing us to
share our perspective.
This morning, instead of rehashing all of the reasons why
the SGR must be repealed, I will focus on the innovative
solutions being championed by ACP and others--others at the
table, I might add--within the medical profession.
First, ACP recommends that the patient-centered medical
home model of care be supported for broad Medicare adoption.
Patient-centered medical home is an approach to providing
comprehensive primary care in a setting that focuses on the
relationships between patients, their primary care physician,
and other health care professionals. This care is characterized
by the following features: a personal physician for each
patient, physician-directed medical practice where the personal
physician leads a team of individuals trained to provide
comprehensive care, and a place where the treatment team can
assist the patient in meeting their specific health care needs.
The patient-centered medical home practices provide increased
access to care to prevent avoidable emergency room and hospital
use, processes to facilitate care coordination amongst all
physicians, and address chronic illnesses present within the
Medicare population, including patient self-management
education. These, and other features of the medical home,
contribute to the increasing quality of care and reducing
avoidable costs to patients and health systems.
Patient-centered medical homes use quality management tools
such as registries and outcomes reporting to proactively manage
the health care of a whole practice's population. There is an
extensive and growing body of evidence on the medical home's
effectiveness in improving outcomes and lowering costs. To cite
just one example, in Genesee County, Michigan, the Genesee
Health Plan in collaboration with local physicians and
hospitals formed the Genesys HealthWorks. This model, which is
built upon a strong, redesigned primary care infrastructure,
has demonstrated both significant cost savings and improved
quality.
Many large insurers, including United Health, WellPoint,
CareFirst, and Blue Cross Blue Shield affiliates, are in the
process of scaling up their efforts in the medical home to
thousands of primary care physician practices in tens of
millions of ruralities across the country. In my practice at
the Cleveland Clinic, all the primary care practice physicians
taking care of adults are certified by the NCQA at the highest
level as medical homes.
In the public sector, CMS Innovations Center is in the
process of enrolling practices in its Comprehensive Primary
Care Initiative. Primary care practices enrolled in this
initiative will receive new public and private funding for
primary care not included--primary care functions not included
in the fee-for-service payments and will have the opportunity
to share net savings generated through the program. Fifty-four
commercial and State insurers are joining with Medicare and
support approximately 500 participating practices in seven
markets.
The bottom line is that the medical home is no longer just
an interesting concept, but a reality for millions of Americans
and thousands of practices. The commercial insurers are driving
these innovations in many markets. This can also become a
reality for Medicare patients.
To accomplish this, Congress needs to accelerate Medicare's
adoption of the medical home model by providing higher payments
to physician practices that have achieved recognition by deemed
private sector accreditation bodies consistent with the
standards to be developed by the Secretary. In a subsequent
stage, performance metrics could be added and incorporated into
the Medicare payment policies.
By supporting the PCMH, Medicare will accelerate the
national adoption of this innovative approach to improving the
health care system. The goal should be to promptly implement
the payment policies to steadily grow physician and patient
participation in medical homes over the next several years.
Second, Congress should enact payment policies to
accelerate the adoption of the related medical home
neighborhood. This concept is essential to the ultimate success
of the medical home. It recognizes that specialty and
subspecialty practices and others that provide treatment to the
patient be recognized and provided with incentives to work
together in a collaborative manner. With the patient-centered
home neighborhood program, primary care physicians and
specialists work together to proactively reduce duplication,
enhance quality, and reduce preventable hospitalizations.
Specifically, ACP proposes that Congress help increase non-
primary care specialists' participation in the medical home
neighborhood project by offering higher payment levels for
those services. In my practice, PCPs and cardiologists
specializing in heart failure have developed coordinated early
intervention programs that have improved quality and reduced
preventable admissions, and saved health care dollars.
Third, Congress should establish Medicare incentives to
physicians to incorporate evidence-based guidelines in national
specialty societies and to share decision-making with the
patients. We think that is a vital step that is important to
get there.
And finally, ACP believes that additional steps should be
taken now to help physicians to move toward models aligned with
value for patients, as well as awarding those who have taken
leadership and risk in participating in new models, like
medical homes and ACOs. Even as new models are being more
thoroughly developed and pilot tested, physicians could get
higher updates for demonstrating they successfully participated
in such programs.
In conclusion, ACP believes that for the first time in many
years, we can begin to see a vision for a better future where
the SGR no longer endangers access to care, Medicare recognizes
and supports the value of primary and coordinated care, and
where every person who is enrolled in Medicare has access to a
highly-functioning primary care practice through certified
medical homes and other promising care coordination models. The
current system disincents the use of modern practice approaches
that are proven to improve quality, prevent hospitalization,
and save lives.
Thank you for your time, and I am pleased to answer
questions.
[The prepared statement of Mr. Bronson follows:]
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Mr. Pitts. OK. Chair thanks the gentleman. Dr. Hoyt is
recognized for 5 minutes.
STATEMENT OF DAVID B. HOYT
Mr. Hoyt. Chairman Pitts, Ranking Member Pallone, and
members of the committee, I wish to thank you for inviting the
American College of Surgeons to discuss the role of quality and
improving the Medicare physician payment system. My name is
David Hoyt. I am a trauma surgeon and the Executive Director of
the American College of Surgeons. The ACS appreciates your
recognition that the current Medicare physician payment system
and its sustainable growth rate formula are fundamentally
flawed. We wish to be a partner in the effort to develop a
long-term solution that improves the quality of care while
helping to reduce costs. My comments today will focus on the
College's efforts in the area of quality improvement and the
use of an ACS program to propose a Medicare physician payment
proposal called the Value Based Update, or VBU.
Our belief is that any new payment system should be part of
an evolutionary process that achieves the ultimate goals of
increasing quality for the patient and reducing growth in
health care spending. Over the past year, we have improved our
quality improvement principles into the VBU, a Medicare
physician payment reform proposal. Our proposal is predicated
on Congress finally eliminating the current SGR formula and
fully offsetting the cost of permanent repeal. I will caution
you that this is still a draft proposal. We look forward to
working with Congress and other stakeholders to continue to
develop this option.
In developing the VBU, we took the lessons learned in the
American College of Surgeons National Surgical Quality
Improvement Program, or NSQIP, and other quality improvement
efforts and sought to expand them into the larger provider
community. At the outset, we had a number of key concepts in
mind. To be practical, we felt that the proposal must be
patient-centered, politically viable, responsive to the
changing needs of the health care system, and inspired by
quality. Specifically, our proposal first compliments the
quality-related payment incentives in current law and
regulation, while making necessary adjustments in the current
incentive programs to facilitate participation by specialists.
Secondly, it incorporates the improvement of quality and the
promotion of appropriate utilization of care into the annual
payment updates. Third, it accounts for the varying
contribution of different practices to the ability to improve
care and reduce costs, and finally, it creates a mechanism to
incentivize the provision of appropriate services that primary
care can bring to the management of increasingly more complex
medical populations.
The VBU accomplishes these goals by allowing physicians who
successfully participate in CMS quality programs to choose
quality goals for the specific patients or conditions they
treat. Rather than basing compensation on overall volume and
spending targets, the VBU bases performance on carefully
designed measures. The VBU is designed to break down the--of
care among physicians and to begin to measure service lines of
care.
The central component of the VBU is the Clinical Affinity
Group, or CAG. Each CAG will have its own patient-oriented,
outcomes-based, risk-adjusted quality measures designed to
foster continuous improvement and help lower costs. These
measures will be crafted in close consultation with the
relevant stakeholders, including the specialty societies, who
in many cases are already developing measures and other quality
programs on their own. Providers will select their Clinical
Affinity Group, but will have to meet certain eligibility
requirements, based on patients they see and conditions they
treat. Physicians whose specialties would work in concert to
meet specific quality measurement goals which have met would
improve care and help drive down the cost of care. Physicians
would be measured against benchmarks that both occur at a
national and a regional level, allowing for continued
innovation with medical communities. Finally, once implemented,
physicians will have the opportunity to select their CAG on an
annual basis. Goals can be adjusted regularly to ensure that
the quality of care provided to the patient is continuously
improving. Annual updates would then be predicated on this
quality improvement. We believe this kind of a system will take
5 to 7 years to fully implement.
The College strongly believes that improving quality and
safety offers the best chance for transforming our health care
system. Cost reduction alone cannot be the primary driving
force of change. Change must instead be driven by quality
measurement. The ACS has a rich history in quality
improvements, and we have distilled what we have learned into
four basic principles: first, set appropriate standards;
second, build the right infrastructure to deliver the care;
third, use the right data to measure performance; and fourth,
expose yourself to external verification through peer review.
The ACS NSQIP program is built on these principles, and is
the prime example of how properly structured quality
improvement leads to cost savings. Participating hospitals have
been seen to reduce expensive complications, and it is these
same principles that we are, in this program, promoting for a
Medicare physician payment system.
Our next payment system should focus on individual patients
and patient populations, and rely on physician leadership to
achieve improved outcomes, quality, safety, efficiency,
effectiveness, and patient involvement. Improving outcomes in
care processes and slowing the growth of health care spending
are, in fact, complementary objectives.
Thank you again, Mr. Chairman, for the opportunity to
participate in this hearing.
[The prepared statement of Mr. Hoyt follows:]
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Mr. Pitts. Chair thanks the gentleman, and now recognizes
Dr. Patel for 5 minutes for opening statement.
STATEMENT OF KAVITA PATEL
Ms. Patel. Thank you, Chairman Pitts, Ranking Member
Pallone, and members of the Health Subcommittee for inviting me
to testify today on this important topic. My name is Kavita
Patel, and I am a fellow at the Engelberg Center for Health
Care Reform at the Brookings Institution, and a practicing
primary care physician.
Industries are often challenged with redefining what their
business models are, and how they produce value. Health care is
at this crossroad now. As a country, we are presented with an
opportunity to make care and how we pay for it more rational,
more productive, and better able to meet the needs of the
American people. I would like to highlight the following key
points, and then elaborate with a couple of clinical examples
to illustrate a pathway forward in the near and short term,
away from our current fee-for-service system.
One thing that is very clear is that our current
reimbursement system does not incentivize the type of clinical
practice efficiency that promotes value in care. We have heard
from my other panelists, and as all of you have testified
yourselves, this is a fact.
Number two, innovations in clinical practice must be paired
with timely and usable data from CMS and other payers, robust
quality metrics and transparent measurement that is consistent.
The timeliness and transparency of this is essential. Receiving
data a year or even 6 months after your clinical practices are
going on is not going to help physicians and other clinicians
change the way they deliver care in that moment, and this has
been an often criticized setback from a multitude of payers.
Third, over the next several years--not decades, not even
more than 5 years--I would say over the next several years we
must migrate towards a model that deals with coordination of
care, as other panelists have outlined, but more importantly,
sets a sight on translating that coordination of care into a
larger, episodic or more globally-based payment model that
takes into consideration the very flexibilities that we need
for different types of clinical efficiencies. One size does not
fit all, and we must therefore allow for flexibility in this
transition. In this process, however, the importance of taking
what we are currently doing right now and translating that into
something that is more coordinated towards the path of
flexibility is the way to move forward today from our current
system.
For example, the American Board of Internal Medicine
Foundation has already called upon a number of specialties to
say what are we doing right now that we do not need to be
doing? This is something that the professional societies have
corralled around to say, ``Here are the top five things we each
know that we do not need to be doing.'' This is a perfect basis
from which we can take current reimbursement and translate that
by clinically evidence-informed models into a different form of
payment towards that pathway for more coordinated care.
I will offer you an example in cardiology, since that gives
us a great way of identifying one, some that the professional
societies have agreed to. For example, in cardiology, a
universal recommendation was to not perform stress cardiac
imaging or advanced noninvasive imaging in the initial
evaluation of patients without cardiac symptoms unless high
risk cardiac markers are present. Sounds very straightforward;
however, this is a very costly expense to Medicare today. So
translating some of these services that have been brought
forward by physicians and other clinical leaders into a case-
based payment could get us on a pathway away from what we
currently do today. Two practices in very different parts of
the country are already doing this in cardiology, and have
found reductions in cardiac spending on the level of millions
of dollars, but they can't get payers to take them up on it.
They are simply proposing a novel way to translate how they
deliver care to patients with chest pain and with congestive
heart failure with communications between primary care
physicians, cardiologists, hospilists, surgeons, and other
specialists. A way to communicate through test messaging, e-
mail, when we need to have a consult with a cardiologist,
allowing for primary care physicians to be able to readily
access that specialist and open an honest, timely delivery of
data between physicians will allow for this type of care
coordination that I described, all with the purpose of helping
to teach clinicians how they can better reduce the numbers of
services that they provide that they have acknowledged that do
not provide value. That is one example in cardiology.
The second example, a short one, in primary care and
behavioral health. We have a critical shortage of psychiatrists
and mental health professionals in this country, yet depression
and other mental illnesses are an overwhelming problem in
primary care. Translating some of what we currently do to allow
for better collaboration between a telepsychiatrist, for
example, who does not need to see a patient, and a primary care
physician to offer advice for high risk management is exactly
the type of payment model that can move us away from our fee-
for-service system.
I have many more examples with tangible savings that could
be accomplished today; however, payers, including those that
are public and private, need to be responsive to do this, and
it can start with action by Congress.
I hope that I have illustrated that not only does one size
not fit all, but that there are absolutely elements of our
current reimbursement system that we must retain in order to
improve. And that instead when we give providers more
flexibility, we can accomplish this in both the short term as
well as deal with what we have started with the SGR.
I thank you and welcome any questions.
[The prepared statement of Ms. Patel follows:]
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Mr. Pitts. The Chair thanks the gentlelady, and that
concludes the opening statements.
I have a unanimous consent request. The chair requests the
following statement be introduced into the record. It is a
statement by Garrison Bliss, M.D., President of Qliance Medical
Group, Seattle, Washington. You have seen it. Without
objection, it is so ordered.
[The information follows:]
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Mr. Pitts. I will now begin the questioning. I recognize
myself 5 minutes for that purpose.
Mr. Serota, relatively small number of patients, perhaps 10
percent, especially those with chronic conditions and multiple
co-morbidities may consume the majority of health care services
and resources. It seems to make sense to target resources
toward the care of those patients. How do you get physicians
across specialties to do this?
Mr. Serota. The idea of identifying those high risk
patients or those high-utilizing patients with chronic
conditions is the--essentially the essence of the health
informatics that we use for clinical care. We work with
providers to provide them a comprehensive look at their patient
populations. All the care that they are receiving, we try to
identify those patients which are consuming care, and then the
genesis or the foundation in a patient-centered medical home is
to get the primary care physician to manage all of those
attributes, all of those providers that are participating in
the care to ensure that there is a lack of duplication and
better coordination of the care that those patients receive.
Mr. Pitts. Dr. Nash, your model appears to be a form of
capitation payment. In the 1990s, capitation arrangements fell
into disfavor in many markets because of certain weaknesses.
How does your model address those weaknesses?
Mr. Nash. Yes, I stated among many physicians when you
bring up the ``C'' word, capitation, there is a reaction, and a
lot of that is from the experience of the '90s where many
capitations were structured around actually putting physicians
at risk for services that they didn't directly provide. So they
weren't prepared to handle that financial risk, that is what an
insurance company really needs to handle. So that is part one.
The model we have is really only for the services the physician
directly provides.
The second major aspect, though, is capitations of those
days were really just age/sex adjusted, so that I, as a family
doc, you know, if I am in my office and I am paid on that model
from the '90s, if I had a 40-year-old patient come in to see me
from a plan being paid in that way, a 40-year-old male but I
happen to get one with diabetes and asthma, I was not paid
adequately for that because I was being paid on the average. So
this specific model pays more for the sicker patient, so we pay
significantly more for that patient so the doctor can spend
more time with that patient.
Mr. Pitts. Thank you. Dr. Bronson, we hear a lot about how
primary care providers are undervalued in comparison to
specialists. Most people agree that a robust primary care
workforce is essential. However, according to the Association
of American Medical Colleges Center for Workforce studies,
there will be not only a shortage of about 45,000 primary care
physicians; there will also be a shortage of 46,000 surgeons
and medical specialists in the next decade. Yet, in a system
with finite resources, how do you increase reimbursement for
primary care without reducing reimbursement for specialists,
and thereby jeopardizing access to specialty care?
Mr. Bronson. Thank you, Mr. Chairman. We strongly believe
that the patient-centered medical home concept and the value
concepts provided here will provide additional funding through
shared savings opportunities to support those initiatives.
Mr. Pitts. OK. Dr. Hoyt, how are physicians assigned to the
Clinical Affinity Groups you described? Do physicians self-
assign, or are they assigned automatically based on the
patients they treat?
Mr. Hoyt. You know, we are still having a lot of discussion
about that, but the general principle you ask about is a
physician would self-select, and the success of that, we
believe, will be in getting the types of groups that would be
naturally incentivized to work together to lower costs and
improve quality would be the premise of these groups.
So you know, there is going to be potentially some conflict
in that if you are talking about the management of, let us say,
coronary syndromes, you are going to have specialists that
right now are not necessarily incentivized to work together,
but that is, in fact, the concept, that somebody could control
what they selected to be a part of, whether it is a coronary
group or a GI group or oncology group, based primarily on what
they practice.
Mr. Pitts. OK. And Dr. Patel, one major criticism of the
ACO model is that it is overly prescriptive. It may work in one
part of the country or for certain medical specialties, but not
for everyone. Providers often complain that they need to make
significant changes in their practices in order to comply with
ACO requirements. How can Medicare incorporate innovative
models that are more flexible, and therefore, less disruptive
to existing practices?
Ms. Patel. Thank you, Mr. Chairman. I think Medicare is
doing just that with trying to introduce, in addition to the
Accountable Care Organization model, other such models that
incorporate other payers such as the Advanced Primary Care
Initiative and others that are going on as we speak. I do think
it is worth noting that the Accountable Care Organization
movement has blossomed and we now have over 2.5 million
Medicare lives in the currently funded Medicare shared savings
programs and pioneer ACO programs. So adding that flexibility I
know is critical to ensuring the retention of the clinical
excellence in those beneficiaries.
Mr. Pitts. My time is expired. Chair recognizes the ranking
member for 5 minutes for questions.
Mr. Pallone. Thank you, Mr. Chairman. I am trying to get in
a bunch of questions here, so I am going to ask you to be
brief, if you can. I am shortening my questions.
Many members have supported using--this is for Dr. Bronson
and Dr. Hoyt. Many members have supported using the OCO
funding, the Overseas Contingency Operation funding, to offset
the cost of repealing the SGR. There are even some Republicans
who have supported it. So I wanted to ask you, would you
support using the OCO funding as a way to pay for repealing
SGR, and if not, do you have an alternative suggestion? Mr.
Bronson first, I guess?
Mr. Bronson. Thank you, sir.
Mr. Pallone. Dr. Bronson.
Mr. Bronson. We are supportive of using the OCO concept for
providing this particular funding that is necessary for this
program. I will add, we are not experts in funding and are open
to other idea.
Mr. Pallone. OK, thank you. Dr. Hoyt?
Mr. Hoyt. Yes, we would support use of that for the offset.
Mr. Pallone. Thank you both.
Now Dr. Bronson, there is a consensus that many of the
delivery reform models discussed today hold promise for
Medicare, however, it takes time to disseminate those models
nationwide. In the meantime, there is clear evidence that there
is a problem with the incentives for primary care payment. Are
there steps we can take now that will help boost primary care
and better reward primary care practitioners?
Mr. Bronson. We very much believe that this is--the first
thing we need to do is really fix this SGR problem for all
practices. Without doing that, we don't have the flexibility
that we need to go forward and improve primary care as
effectively as we could. Supporting the patient-centered
medical home initiative is very important. My personal
practice, more than half of my patients and internists are
Medicare beneficiaries. It is hard to reorganize your practice
into a--fully into a patient-centered medical home if you are
not getting reimbursed effectively by your largest payer. We
need to move fast on this issue.
Mr. Pallone. Now the July 6 proposed rule issued by CMS
creates a new code for care management post discharge. Do you
believe that this new initiative is a good one, or is there
anything else CMS can do to boost primary care?
Mr. Bronson. Well absolutely it is a good one, and a
necessary one, but it needs to be filtered in--more effort
needs to be filtered into a comprehensive solution that changes
the practice paradigm to manage populations and prevent
unnecessary--I shouldn't say unnecessary, but preventable
utilization.
Mr. Pallone. OK. Now I am just going to ask a general
question. I don't know what time is left here for anybody. We
all talk about getting rid of the SGR, but we really mean
simply eliminating the forma that provides a global cap on
spending unrelated to physician performance or quality. The
underlying fee schedule which payments are based off would
likely still remain. You know, we have heard from witnesses at
this hearing notice that at the heart of the fee schedule we
have mis-valued codes and payment incentives that still aren't
aligned to value, the right care at the right time, and of
course, primary care remains undervalued. I would like to ask
any witness, first, whether you support eliminating the SGR
mechanism. I think the answer is yes, so let us just go to the
second, whether you believe that if the SGR mechanism is
eliminated, we will still need to retain the fee schedule, and
assuming there is agreement to retain the fee schedule, what
needs to be done to better align payment incentives there? So
my question is about the fee schedule. I guess I will start
with Mr. Serota and see how far we go with the time.
Mr. Serota. Well I will try to be brief. I think that the
most critical element is to link reimbursement with outcomes
and quality, and to begin to reimburse providers based on the
managing of populations, rather than the episodic care. We
can't get there overnight, so I think the elements of a fee
schedule will have to remain in place for some period of time
as we transition to a differing--different type of payment
model, so I don't think it can be eliminated immediately. But I
do think we have to evolve away from a fee-for-service model at
some point.
Mr. Pallone. Dr. Nash?
Mr. Nash. We have eliminated the fee schedule in the
program that I am speaking about. You know, it has been well
demonstrated that fee-for-service just promotes more care, but
I think the main method I would give is it limits innovations.
It is really only rewarding for that face-to-face between the
doctor and a patient. It really doesn't reward for team-based
care, it doesn't reward for telephone care, web based care, a
whole variety. So if we want comprehensive care, we should pay
comprehensively.
Mr. Pallone. Dr. Bronson, you may be the last one because
we are running out of time.
Mr. Bronson. I couldn't agree more with Dr. Nash. We have
important shortages in several specialties, primary care,
general surgery. Adjustment of fee schedule can help, but you
know--in a proactive way, but we need to go to a more
comprehensive solution in the long run.
Mr. Pallone. Dr. Hoyt?
Mr. Hoyt. Well, we actually anticipate the need for this in
our proposal by anticipating the need to adjust primary care.
But to your question, in the future do we need a way to
relatively value services, I think we still do because
background, education, training, commitment to various kinds of
efforts is going to lead to a different valuation of some
services, and I think the--our proposal would be to have
physicians still be in charge of doing that. I realize that
that seems self-interested, but we feel that, as evidenced
through committees like the RUC that that is really what the
RUC has been able to do. Maybe not always correctly in some
people's minds, but it is really intended to try and foster
that debate amongst physicians what the relative value of a
particular service is.
Mr. Pallone. Thank you.
Mr. Pitts. Chair thanks the gentleman and now recognizes
Dr. Burgess, 5 minutes for questions.
Mr. Burgess. Dr. Patel, you got left off that last
sequence. Would you care to respond to the ranking member's
question?
Ms. Patel. Thank you. I would agree, briefly, that we
should definitely improve on the fee-for-service elements, and
there will be a need, as I mentioned, to retain elements such
that when we move towards these more flexible payment models,
we can incentivize the right behavior. And I do think it is
about helping to recalculate what the relative value of those
payments are, to make them more accurate for what we actually
want to achieve, which we don't have right now.
Mr. Burgess. And that is why I wanted you to give that
answer, so I am grateful that you did.
Moving to a model where fee-for-service no longer exists
is, in some ways, problematic because it is the world that many
of us--I practiced medicine for 25 years. It is the world that
many of us grew up in. We understand it, we can converse easily
about that world.
At the same time, if there is--and I will be honest with
you, there are places in Texas where I don't honestly see how
you do a bundled payment or a value-based purchasing or an ACO
model in Muleshoe, Texas, where you got one guy. I mean, I
don't know how you do that. That person has to have a fee-for-
service environment, at least in my limited view of the world.
They have to have a fee-for-service environment, and if all of
our effort with SGR reform is to move away from fee-for-
service, what do you do with the patients who are seeing the
doc in Muleshoe, Texas?
Ms. Patel. Thank you for that question, Mr. Vice Chair. I
couldn't agree with you more. I am from Texas myself, and
understand exactly the kinds of practices that you are speaking
of, and I can tell you that that is why the element that really
helps to link a way forward is retaining some of our current
system that can help to--allow physicians to continue practices
such as you pointed out, but also, I would say to you that that
physician and those of us who practice in more isolated
settings, or even smaller settings in a city, what we are all
looking for is a way to coordinate our care better and to reach
out, just like we did in medical school and in training, to
other colleagues that we know can help us respond to our
patient's needs.
So I think a step towards something that is different than
what we have now is to allow the solo practicing doctor to be
able to engage in a model for some of their patients that have
high risk cardiac conditions that need to go to San Antonio,
and coordinate care better there and reward that behavior.
Mr. Burgess. Right, and most--can we just stipulate for the
record, since you are from Texas, that Muleshoe, Texas,
actually exists? I didn't just make that up.
Ms. Patel. I can--I will tell you where it is on a map
even, yes.
Mr. Burgess. But the--you know, when we talked about this,
and we have talked about it at the committee level, you know,
how do you go to a world beyond fee-for-service? It just seems
to me we are going to have to--whatever we do with SGR, and I
know there are people who say we need alternative payment
models, we need a value-based system, we need an ACO model, we
need a bundled payment model. But honestly, we have got to
allow for the rich panoply of practices that are out there to
continue to thrive, because after all, the name of the game is
not just reworking a formula, the name of the game is seniors
need access to care. And right now, that access is not being--
is in jeopardy because of the actions taken by Congress that
instituted this payment system, and then our last-minute
rescues every year have been the--have put practices on kind of
a tenuous financial footing if they have got to go to their
banker for a short-term note at probably 9 to 12 percent
interest to fund because their cash across the counter was
reduced by 15 percent because Congress said oh, we will just
hold your check at CMS until we get back from congressional
recess. I mean, that sort of activity is just devastating to
practices. So I want to see us figure that out.
Now, you talked a little bit about not doing tests that are
not necessary, and I agree with that, but at the same time, I
think anyone who has been in clinical practice also recognizes
that people don't often always function according to protocol,
and I think one of the comments you made was in cardiology that
there was no testing, no dynamic testing unless there were high
risk markers present. Did I understand you correctly with that?
Ms. Patel. Yes, that is correct. That is from the American
College of Cardiology.
Mr. Burgess. But we have all been in situations where we
have that patient come in at the end of the day who describes
an unnatural fatigue, and you say OK, look. It is the end of
the day. I am tired, you are tired, we are all tired. Go on
about your business. But we have all had the situation where we
have referred that patient on for testing, and in fact, she has
been quite ill with really minimal systems and had you not had
that little spark of curiosity, you might not have referred for
the testing. But now if you got someone looking over your
shoulder saying look, you are a high utilizer for this type of
testing and these indications are very soft, who is going to
help us with the liability side of that question?
Ms. Patel. So I will try to respond briefly.
Mr. Burgess. No, you can use as much time as you want. The
chairman is very tolerant. I know him well.
Mr. Pitts. You may proceed.
Ms. Patel. Thank you for that.
So the first element is that this cannot be something where
it is a dictum or a direction to providers that you may never--
notice when the American College of Cardiology participated in
identifying that very example around cardiac stress imaging, it
wasn't--it is not a ``you must never do this,'' it was chosen
as one of the conditions in which the profession can help to
teach themselves and their own clinicians how to best deal with
imaging issues when patients present, and that includes the
ability to order that test when it is necessary, or you do have
that spark of curiosity.
So in the model that I am describing for payment that helps
to also deal with some of the issues you bring up of liability
or feeling the responsibility to order something or not order
something, it would be to take that--we know that there is a
proportion of payments that we are delivering in the fee-for-
service system right now that are being used to deliver those
services. Take a proportion of those payments and say to
cardiologists, to internists, to family practice doctors in
Texas and say you know what, we know that there are things that
you don't like about the way you practice that are responsive
to what you think might be issues around liability or things
that might spark a curiosity, and you want the flexibility to
deal with that. But what we will give you--we are not just
going to give you free reign, you can't just do what you want.
What we want for you to do is agree to be responsible by
following what your own profession and your own colleagues have
said are the best-informed evidence around an issue. Does that
mean that it is 100 percent an absolute? No. Does that mean
that we would need rich ability to measure what we are doing
and learn from it? I think that is what is essential, and I
think that is what physicians are craving. They want to know
that they have some flexibility and autonomy to practice the
way they want, but also to get the information that can help
them be better. And that will help the very small businesses
that are small practices to thrive in a newer business model
and be more efficient.
Mr. Pitts. Chair thanks the gentleman and now recognizes
the ranking member of the full committee, Mr. Waxman, for 5
minutes for questions.
Mr. Waxman. Thank you, Mr. Chairman. I want to thank all
the witnesses. This has been an excellent panel, and I think
you have given us a lot to think about.
We want a health care system that works. We want some
innovation, experimentation, but no one size fits all, and we
have got to be open to looking at what makes sense, given the
circumstances. Of course, the main thing that makes sense at
the moment is to deal with this SGR problem because it is--
nothing else seems to work unless we take care of SGR. That is
why it is so frustrating that we didn't use the OCO, which is
just a bookkeeping thing, but the SGR is just a bookkeeping
thing, and we are stuck. And we ought to solve those two
issues, pay for it, get this thing resolved.
Dr. Patel, I am not sure how closely you have been
following what has been going on in the House of
Representatives, but last week, the Republicans brought forward
a bill to repeal the Affordable Care Act. Not only does the
Affordable Care Act provide countless benefits for families,
such as protections against pre-existing condition exclusions
and lifetime caps on coverage, tax breaks of $4,000 a year per
family for health care, improve free preventive care, lowered
out of pocket costs for prescription drugs, but the Affordable
Care Act also includes important provisions to drive delivery,
reform, in fee-for-service Medicare. One part of the Affordable
Care Act provides for Accountable Care Organizations within
Medicare, or bundled payment programs in Medicare. The law even
established the innovation center, which is taking
unprecedented steps to help providers, payers, and patient
groups develop and spread new and successful innovations,
including through medical homes and multi-payer initiatives.
Obviously, the Affordable Care Act is just one piece of
improving quality and outcomes for Medicare, but I believe it
is an important one. If the Republican plan to repeal the
Affordable Care Act were to become law, what effect would that
have on Medicare's work to improve quality and outcomes and
realign payment incentives to focus on value? Do you believe
that would be a setback?
Ms. Patel. I do believe it would be setback to turn back
all of the important work that has been done in the past 2
years and beyond, even before the Affordable Care Act was
passed, around savings and Medicare system, the Medicaid
system, and then what is even more remarkable is that we can't
turn back, even with the repeal, what has already taken place
as a result of the important initiatives you mentioned, sir, in
the private market.
So now we have created a very complex web that is starting
to produce some amazing results, as you have heard today. So a
repeal and any setback would really undo valuable work and send
a signal, I believe, to clinicians around the country who are
looking for a way to move forward.
Mr. Waxman. It certainly would send a signal to a lot of
people who don't have health insurance that they are not going
to have an opportunity to get health insurance because of the
barriers that they have been unable to overcome prior to the
Affordable Care Act being passed and being fully implemented.
It occurs to me as I listen to the testimony that our
health system has hundreds, if not thousands, of groups
pursuing reform in some way. Each health plan, provider
organization, even Medicare and Medicaid has a slightly
different take on a medical home or an Accountable Care
Organization, for example. I am wondering how we ensure that
all of these efforts are complimentary, not contradictory?
Dr. Patel, in your testimony you mentioned the need to
identify mechanisms to further multi-payer efforts to transform
the delivery system. I know that CMS is, as a result of the new
authority in the Affordable Care Act, is working on some of
these multi-payer initiatives. For example, the Comprehensive
Primary Care Initiative is a collaborative effort between
public and private payers and primary care practices to reward
care management. The Multi-payer Advanced Primary Care
Demonstration is developing State-led multi-payer
collaborations with primary care practices to improve care. Dr.
Patel, could you talk about why multi-payer initiatives are so
important; what CMS, through the Affordable Care Act, is doing
in this area, and what more can be done?
Ms. Patel. Multi-payer initiatives are critical because it
is very hard for clinicians to provide care for only one stream
of patients, measure quality on those patients, and then have a
completely different set of expectations, incentives, and
reporting, which is what is going on right now. So some of the
important initiatives that you just mentioned at the State
level, in the primary care setting, and even the Accountable
Care Organization model really send a strong signal to other
payers, and that started with actions taken in Medicare by CMS
as a result of the Affordable Care Act. So do believe that the
continuing work of encouraging, but then also having a way to
set forward the actual mechanism for other payers to be
involved. And that means, as I said in my testimony, consistent
quality measures. We can't have one set of quality measures
that I report to for one payer, which is what I do in my
practice now, and a completely different set of metrics for
another. That is where the multi-payer efforts are huge and
critical.
Mr. Pitts. Chair thanks the gentleman. Now recognizes Dr.
Cassidy, 5 minutes for questions.
Mr. Cassidy. As an open question to follow up on Mr.
Waxman's affection for the ACA, according to who you listen to,
Medicare is going bankrupt in 5 to 12 years. I am sure he and
his affection would love that ACA takes $500 billion in savings
from Medicare and spends it elsewhere as opposed to shoring up
the program. That is a feature that Republicans object to, and
frankly, it is terrible for Medicare. But that is part of the
ACA and I am sure he would not want that repealed either.
That said, as a practicing physician myself, I have
observed that only fiduciary linkage between patients and
physicians seems to consistently lower costs. That is a little
bit of a theme I have heard from you.
Mr. Serota, I am curious, do you do MA plans, Medicare
Advantage programs?
Mr. Serota. We do have Medicare Advantage programs, yes.
Mr. Cassidy. What is your--so you have got a very nice
system where you are getting feedback--each of you described
this, Dr. Nash, Dr. Patel--where you are giving feedback to the
practicing physician, clearly, that costs money. What is the
MLR, your medical loss ratio, of the MA plans that you have?
Mr. Serota. It is widely variated based on the marketplace.
I don't have a single----
Mr. Cassidy. Is it over 15 percent?
Mr. Serota. The medical loss ratio itself? The
administrative expense piece of that?
Mr. Cassidy. Yes.
Mr. Serota. In some markets it may be.
Mr. Cassidy. Now you are contracting with these physician
groups. I am assuming they have their own MLR--and Dr. Nash,
you can weigh in as well. Are you doing Medicare Advantage as
well?
Mr. Nash. Yes, we are.
Mr. Cassidy. So can I ask what you are contracting with
the--are you directly contracting with CMS or with the Medicare
Advantage program?
Mr. Nash. We--our Medicare Advantage program is directly
through CMS.
Mr. Cassidy. So you are an MA plan?
Mr. Nash. Correct.
Mr. Cassidy. So you get--what is your MLR?
Mr. Nash. Well, the medical loss ratio is an amount of
premium that is spent on medical care, so we are roughly about
88 percent or something of that nature.
Mr. Cassidy. So your administrative cost is only 12
percent?
Mr. Nash. Correct.
Mr. Cassidy. That is pretty good. Some other plans similar
to yours seem to have higher than that. It has been instructed
some of the physician groups contracting with the insurance
companies, the insurance company keeps 12 but then the medical
plan itself has an additional MLR. Mr. Serota is kind of
nodding his head yes. It seems that in the aggregate, the MLR
is greater than the 15 percent or 20 percent defined by the so-
loved ACA.
Now, if you didn't have the ability to do your data
systems, would you be as effective in managing that care? Yes.
Mr. Nash. Absolutely not. I mean, the data is essential for
any of this.
Mr. Cassidy. That wasn't a trick question. It seemed so
self-evident. By the way, I admire the fact that you as
practicing physicians understand there are some things fee-for-
service works better for. Then again, as a practicing doc, I
also see that, so let me just kind of compliment you on that
model.
Now, for all of you--Dr. Hoyt, it seems like yours is
effectively a bundled payment system, correct? If somebody
has--I have a pain in my neck and it is not from any of you, it
is just from a bad neck, so if I am grimacing, that is the
reason why. It seems like you are a bundled system. If somebody
has colon cancer, they would come to you and contract, if you
will, for the management of that care, is that correct?
Mr. Hoyt. Well, in our system bundled payments could be
accommodated, but the system is really about updates for the
overall Medicare reimbursement on an annual basis. And it
simply puts a group of physicians to quality of metrics around
a specific disease target or something like that. It doesn't
necessarily, per se, bundle the responsibility by, you know,
that same group.
Mr. Cassidy. Let me ask you, because really, this is about
finding ways to save enough money and translate those savings
into doing away with SGR forever, once and for all, and
continuing to reward patients for appropriate payment, correct?
Mr. Hoyt. Correct, and I think, you know, that is an
assumption in our model that we have to prove. We are planning
to do some modeling to actually see if it shakes out, but your
comment that all of these attempts at cost savings is
ultimately where the extra money comes from to pay for
increased access or individual--more individualized care for
high risk patients, et cetera, that has to be the assumption,
that there are some ways that can be----
Mr. Cassidy. Dr. Patel, I really liked your testimony. I
like your written, and I like the way you delivered it. Let me
just compliment you. But that said, everybody has talked about
somewhat of a big government-type solution. You are going to
need a lot of structure here. You are going to need this big,
overarching overhead. And going back--I will go to Louisiana,
FP and Pointe Coupee Parish, small place, overworked,
underpaid, driven, wife is wondering why he is not home on
time. And that is too common. Now what do you think about the
direct medical care model? We have the written testimony from
Qliance where you pay the doc $50 to $100 a month depending on
the complexity and age of the patient, and she or he manages
all the outpatient services, referring to the inpatient setting
as separate. It is not totally capitated, but it allows a doc
to manage the outpatient and then the inpatient then goes on
another ticket. What are your feelings about that?
Ms. Patel. I have had a chance to learn more about the
Qliance model over a year ago, and have been very interested in
exactly the way they are able to risk adjust and charge a
sliding fee per month for beneficiaries and have amazing kind
of access points for those beneficiaries to e-mail with their
doctors, talk to them, and I think that that is a great model
that would actually fit in nicely with helping to offer a
flexibility for a primary care physician in Louisiana to do
something exactly like that, and that would be a very rich way
to ensure financial sustainability in their practice----
Mr. Cassidy. Exactly.
Ms. Patel [continuing]. All the while really creating
models inside that practice that reward coordination. Let the
doctors and the MAs and the nurses figure out what they need to
do.
Mr. Cassidy. Sounds good. My last thing, and I am out of
time. Thank you, Mr. Chairman.
Mr. Serota, for the record, I will ask you if you would
give us your MLR for your various MA plans, and what you
estimate that the MLR is of the group with whom you are
contracting, because I think that would be very informative to
us.
Mr. Serota. We can get that information.
Mr. Cassidy. Thank you.
Mr. Pitts. Chair thanks the gentleman, now goes to--
recognizes Mr. Dingell for 5 minutes for questions.
Mr. Dingell. Mr. Chairman, I thank you. I commend you for
this hearing. I commend the panel. This is one of the best
presentations and one of the best hearings I have heard for a
while. I also want to commend our panelists for their fine
testimony.
These questions will go to Dr. Patel. I want to thank you
for being here today. Please answer the following questions yes
or no. Is it fair to say from your testimony that fee-for-
services models do not promote the highest quality and highest
value health care? Yes or no.
Ms. Patel. Yes.
Mr. Dingell. Is it also fair to say that models such as the
patient-centered medical home have the most promise to provide
our citizens with the best and most affordable health care? Yes
or no.
Ms. Patel. Yes.
Mr. Dingell. Is it possible that other benefits from these
things could occur, such as a reduction in both cost and the
rate of growth of cost?
Ms. Patel. Yes.
Mr. Dingell. Now Doctor, I believe that on March 23, 2010,
the President signed the Affordable Care Act into law. I am
sure you are aware that ACA provides a shared savings program
through Accountable Care Organizations that serve 2.4 million
Americans, is that right?
Ms. Patel. Yes.
Mr. Dingell. Now Doctor, ACA is legislation that includes
the authority to embark on many innovative paths. I believe
that is a desirable thing, is it not?
Ms. Patel. Yes.
Mr. Dingell. Now Doctor, are you aware that CMS programs
such as innovation advisors, and innovation challenge grants
that seek to promote groundbreaking work in health care, would
you say that is useful? Yes or no.
Ms. Patel. Yes.
Mr. Dingell. By the way, Doctor, I am sorry to do this to
you. You are a very good witness, but I have got a lot of
questions and not much time.
Ms. Patel. No problem.
Mr. Dingell. Dr. Patel, it is clear from your testimony
that you understand the importance of excellent primary care.
This is an area of great shortage in this country, and
potentially worse shortage, is it not?
Ms. Patel. Yes.
Mr. Dingell. Did you know that CMS has a comprehensive
primary care initiative that encourages public/private
collaboration on promoting primary care? Yes or no.
Ms. Patel. Yes.
Mr. Dingell. Dr. Patel, I think we both agree that CMS must
do more to reform physician payment systems. Is that your view?
Ms. Patel. Yes.
Mr. Dingell. And I hope you also recognize that the
Affordable Care Act is assisting CMS in beginning the important
process towards these vital reforms. Do you agree with that
statement?
Ms. Patel. Yes, sir.
Mr. Dingell. Doctor, do you want to make a comment as to
how that particular process is working? This is not a yes or no
question.
Ms. Patel. Thank you. Yes, I am happy to just briefly tell
you that I do know that CMS has been working, even with the
most recently mentioned physician payment rule that was
released last week, to add modifications that acknowledge some
of the issues we discussed today around the relative value of
some fee-for-service elements, as well as ways to better
integrate quality with work that is already going on in
clinical specialty societies and primary care.
Mr. Dingell. Does that offer promise for the future in
addressing these miserable problems we have----
Ms. Patel. It does, sir.
Mr. Dingell [continuing]. With regard to cost increases and
things of that kind?
Ms. Patel. It does, and it also offers insights into what
we need to do more work in, even outside of the Medicare
program.
Mr. Dingell. Now how does--how is it that this program is
going to benefit us in terms of addressing cost increases and
the rate of increase of costs?
Ms. Patel. It all has to do with making sure that what we
are incentivizing, where we put the dollars, actually matches
towards the value that has already been identified that we do
not attain in this country. So it is really about taking
resources that we know are not going towards valuable care, and
redirecting those towards things that we know promote value.
And those come from the very work that we are hearing about
that are led by clinicians.
Mr. Dingell. Now you just said something very important.
How do we do that? What are the steps that we take to make that
happen?
Ms. Patel. The very short-term steps over the next 2 years,
for example, transferring a proportion of what we do in fee-
for-service payment right now into this coordinated care model
that we are discussing. It is even beyond the patient-centered
medical home. It could be a model that allows for an
oncologist, for example, to better coordinate care for a
colorectal cancer patient. And then from that point, what we
can't do is leave it alone at that step. What we must do is
transfer and think about how that money, those dollars and care
coordination can not only be reinvested back into the system,
but what savings we create from that can move towards either
these larger kind of episode or bundled payments that we have
discussed, or other mechanisms that other physicians have
brought up today.
Mr. Dingell. Do you believe that the medical profession
will support that?
Ms. Patel. I believe they will, and I believe they have
already been putting these models forward, sir.
Mr. Dingell. Thank you. Thank you, Mr. Chairman.
Mr. Pitts. Chair thanks the gentleman and now recognizes
the gentleman from Ohio, Mr. Latta, 5 minutes for questions.
Mr. Latta. Thank you, Mr. Chairman, and thanks very much to
our panel members for being with us today. It has been very
enlightening.
If I could start with Mr. Serota, if I could ask you--it is
kind of interesting in your first page of your testimony, you
state that U.S. health care spending exceeds $2.5 trillion
annually, and studies estimate that 30 cents of every health
care dollar goes to care that is ineffective or redundant, and
those dollars are not being well spent.
Let me ask you, why is that happening and where are those
dollars going?
Mr. Serota. Well, I think you have heard virtually everyone
on the panel answer that question in a slightly different take,
but the reality is that we are providing care, as Dr. Patel
just said, that isn't valuable and we need to redirect that
care to things that are going to provide better outcomes. Why
is it happening? We have a system that incents volume and
doesn't incent population management, quality, and outcome. So
when you have a system that incents volume, you get volume.
That is what is transpiring.
Mr. Latta. Let me ask, does this include a lot of tests
that don't need to be done because folks out there are fearful
if they don't do the test that they will be held liable?
Mr. Serota. Certainly.
Mr. Latta. And what should we do about that?
Mr. Serota. Well, I think we have to look at the health
care system comprehensively, which would include looking at
reforming the tort system as well.
Mr. Latta. Dr. Nash, I saw you nodding your head.
Mr. Nash. Yes, absolutely correct. I mean, if you speak to
physicians, that is the first thing I put forward and was
raised even in today's discussion. But the other side of the
coin is really the patients and the patients demand for
services because of their own anxieties and concerns, and both
need to be dealt with.
Mr. Latta. That is one of the things, you know, that we
have been talking about around here and that we have to get
done, because you can't really, you know, have meaningful
health care reform if we don't do something about the tort
system in this country and a lot of these junk lawsuits.
Let me ask this question. This is to Dr. Bronson. I was
just over at Cleveland Clinic on Monday for a meeting, and I am
from northwest Ohio, but you know, we have been talking a lot
about what is happening in the health care system here, but let
me ask you this. We hear a lot about the physician's role in
promoting high quality of care and avoiding unnecessary
spending, and you know, really, what is the role of the patient
now that we have to be looking at?
Mr. Bronson. Well, the role of the patient is very
important, and that is why we support initiatives to get
patients more actively engaged in shared decision making in an
effective manner, and that should be supported in practices. I
would like to add to the comment on liability reform, that we
are very strongly in support of a variety of steps for
liability reform. You may recall that I came to your office and
spoke to you about the--health courts is something that we
should test nationally to see if having impartial judges
involved in this type of process, instead of volatile juries
could be a more effective manner in handling liability reform.
Mr. Latta. As we look at that, how do we incentivize those
patients to make sure that they can do more, and those people
that are in the system, to make sure that, you know, they are
not--we were talking about this the other day about, you know,
20, 30, 40 years ago folks couldn't go to the emergency room as
much, you know. Folks might have stayed home and taken care of
things a little bit more. But how do we incentivize those
people for making better health care decisions on their own?
Mr. Bronson. Well, number one, we have to fix the access
problem in primary care. My experience is patients really don't
want to be sitting 3 to 4 hours in the emergency room waiting
to be seen for an acute minor problem. They would really rather
see their personal physician. Part of the concept of what we
are getting at is rewarding efforts to enhance access to
restructure practices to be more effective, to use extenders
more efficiently in practices to get patients in. We believe
that those types of steps will reduce unnecessary utilization,
and hopefully avoid preventable omissions and expenses.
Mr. Latta. OK. If I could, Dr. Nash, ask you this question.
You know, if the SGR, let us just say, is reduced at the end of
this year by 27-1/2 percent, how would that affect rural areas
in this country, and would they suffer disproportionate hit
more than an urban area? How would you see that?
Mr. Nash. If it was not?
Mr. Latta. Right, if it----
Mr. Nash. If it remained enforced?
Mr. Latta. Right.
Mr. Nash. Yes, it would be devastating, you know. The
access currently for Medicare patients across the country,
particularly in rural areas, is threatened even on the current
state, let alone if that was the outcome.
Mr. Latta. Mr. Chairman, I yield back my time.
Mr. Pitts. Chair thanks the gentleman and recognizes the
gentleman from New York, Mr. Towns, 5 minutes for questions.
Mr. Towns. Thank you very much, Mr. Chairman. Let me begin
by first thanking you for having this hearing, and to thank
these panelists for outstanding testimony. I think that as has
been stated, this is a very serious issue and of course, I
think that we need to spend as much time as we need to do in
order to try and correct some of the problems that are going on
as we look at access and of course, liability and all of these
things I think are connected.
So let me begin with you, Dr. Patel. If we shift away from
the FFS payment system, what would that transition process look
like? We have identified the resource base relative value
scale, particularly the RVUs as a source of much trouble,
direct and focused to volume instead of value. So are you
proposing we do away with RVUs altogether, and how else can we
quantify the value of physician services?
Ms. Patel. I think it is important to preserve the notion
of what a value unit is. I think it is what relative value
units have been that have been the problem, so in a transition,
I mentioned that even in a long-term vision we would need to
keep some elements of our current reimbursement system because
there are elements that work. But I do think that in order to
improve the RVU process, as well as how we incentivize some of
the fee-for-service services that we cover, in the short term,
in the next year or two, we need to actually identify what it
is that we are not deriving value from, and what that amount of
dollars are in the Medicare system, and translate that to
models that are not necessarily RVU driven. That doesn't mean
that we are eliminating all the RVUs, but taking the proportion
of RVUs that we know are really not providing that very term,
relative value, and improving upon them to create incentives
for care coordination.
So taking what we have, not eliminating it totally, taking
what we have that we know does not provide value and
translating that into dollars and payments that do provide
value, and improving--meanwhile, I think improving upon the RV
system, which is what CMS is trying to do right now with the
updates to payments in primary care, for example.
Mr. Towns. All right, thank you very much.
Dr. Hoyt, you mentioned the right infrastructure is
absolutely--in order to provide high quality care. What do you
really mean by that? Could you expound on that?
Mr. Hoyt. Well, you know, I think when you describe
standards for care, you are really describing outcome standards
or you are addressing what the ultimate goal of treating a
disease is. The infrastructure standards are really the details
of the actual physical plan, the communications, the essential
specialists that need to be part of decision making. When you
are talking about complex disease, having consensus and then
committing to the building of the infrastructure is really the
second step in the quality process. So for instance, if you are
going to develop a trauma center, which is my background, you
have to commit to certain elements. If you are going to develop
a cancer center, you have to commit to certain elements. And
you have to do more than that; you have to actually commit to
being externally peer-reviewed if you are really going to
assure the public that what you say you are doing, you are
actually doing.
Mr. Towns. You know, the term here today that has been
used, one size does not fit all, what do you really mean by
that? I understand what you are saying, but what do you really
mean when you say one size does not fit all?
Mr. Hoyt. I don't believe that was my comment, but I will
be glad to----
Mr. Towns. Thank you, Dr. Patel.
Ms. Patel. I do not think that the very situation that we
got into with our current reimbursement system was an attempt
over time to have a unifying kind of standard. Even though we
talked about relative value unit, what we have ended up doing
is really incentivizing volume. And to say that one size does
not fit all, that is an acknowledgment that not every clinical
practice, when you open the door to see the doctor, is going to
look the same, nor should it look the same, and that is the
kind of payment model that Medicare needs to reach, so that we
are not actually just saying to doctors--which is what we are
doing right now--we will pay you more if you do more. That is
not a message we should send. And so one size fits all means
that there are many different models, and we are already seeing
some of these in practice, that can offer more value and save
the system money overall.
Mr. Towns. All right. Thank you very much, and I see my
time is expired.
Mr. Pitts. Chair thanks the gentleman, and now recognizes
Dr. Gingrey for 5 minutes for questions.
Mr. Gingrey. Mr. Chairman, thank you very much. I will
first go to Dr. Bronson and Dr. Hoyt.
Doctors, you were asked earlier in your testimony and the
Q&A about the OCO money being used to eliminate the cliff in
regard to the SGR problem and fixing--eliminating the SGR and,
of course, paying the $300 billion to get the baseline back to
zero. And OCO money, for those who might not know--I think
everybody pretty much does--Overseas Contingency Operation,
basically supplemental appropriations that are used on an
annual basis to fund a war effort, not part of the standard
appropriation procedure, emergency funding. So if you don't use
that money, if you cut back on the war effort and you don't
need it, how can you actually use it to pay for something else?
And you said you would be in favor of using it to pay for
something else. Do you want to confirm that that is your
opinion on that, both of you, Dr. Bronson and Dr. Hoyt?
Mr. Bronson. I will confirm that. Of course, it is a
congressional decision, but yes, I would confirm that we
support that.
Mr. Gingrey. Dr. Bronson, do you feel the same way?
Mr. Hoyt. Yes--Hoyt.
Mr. Gingrey. Dr. Hoyt.
Mr. Hoyt. Yes. Well, we understand the discussion of some
disagreement of whether it is real money or not, or whether it
can or cannot be used. We--if it is available and it exists, we
would support using it.
Mr. Gingrey. If funny money is going to be used, you want
it to be used to kind of help your situation. I understand.
Mr. Hoyt. If we could put it that way.
Mr. Gingrey. Let me say this. I support SGR repeal, and I
think all physicians do. I also understand that because of
Obamacare, the Affordable Care Act, the threat to physicians is
compounded by a second SGR known as IPAB. Except in this
instance, physician reimbursements will now be used to control
cost in all of Medicare, not just Part B. How important is IPAB
repeal to physicians, and do you believe Congress and the
President should support the repeal of IPAB, again, Dr. Bronson
and Dr. Hoyt?
Mr. Bronson. We support the concept of IPAB, but a
significant change in IPAB. We think IPAB should be an advisory
body to Congress who, with a straight up and down vote, could
deal with their recommendations that Congress is accountable to
the people and should have the opportunity to respond to their
advice.
Mr. Gingrey. Dr. Hoyt?
Mr. Hoyt. We have not supported IPAB in principle because
of the concern that there is not adequate oversight and
participation of Congress, but also physicians.
Mr. Gingrey. Would the two of you--thank you for your
answer. Would the two of you submit that response to me in
writing? I would appreciate that very much. Mr. Chairman, thank
you.
Let me go to Dr. Patel. Dr. Patel, I just want to clarify
something that I heard from my colleagues, Mr. Dingell and Mr.
Waxman. They made statements that Medicare innovation would go
away if Obamacare was repealed. Maybe they have forgotten or
aren't aware that CMS demonstration projects on payment models
was begun back in 2005 under President Bush. In fact, the
Institute of Medicine called for them back in 2001. Obamacare
merely copied that idea and Republicans would continue
reforming Medicare if Obamacare is repealed. Would you like to
comment on that? Do you agree with me or disagree with me on
that statement?
Ms. Patel. I agree, sir, that the concept of innovation as
it has been introduced in Medicare started before the
Affordable Care Act, absolutely. Demonstrations--in fact, it is
important demonstrations that occurred, the physician group
practice demonstration and some other chronic disease
demonstrations that have taught us what we need to do better,
and also where we did not necessarily understand enough about
cost savings and the system. So I agree, sir, that they did, in
fact, begin before the Affordable Care Act, but I will tell you
that I think would be important to keep and preserve absolutely
are not just the Center for Medicare and Medicaid Innovation,
which has a great deal of activity right now, but embedded into
that language is also a number of authorities that allow the
Secretary and the Centers for Medicare to rapidly scale those
payments----
Mr. Gingrey. Right, and my time is about to expire, but
thank you very much for that response, because I agree with you
that as we point out--and there are a number of things were
mentioned that are popular in the Affordable Care Act. We
always hear that keeping young people on their parent's health
insurance policy until they are 26 years of age, even if they
are not still in school, is probably a good thing. Eliminating
lifetime and even, indeed, in many cases annual caps, making
sure that children with preexisting conditions--I could go on
and on. There are several things that just like this innovation
that existed before Obamacare, PPACA was enacted, these other
things that we all like in a bipartisan way could easily be
reincorporated into a new plan.
And with that, I see my time is expired, and I thank the
chairman.
Mr. Pitts. Chair thanks the gentleman, and now recognizes
the gentleman, Mr. Engel, for 5 minutes for questions.
Mr. Engel. Thank you very much, Mr. Chairman. I just have
to comment that I have heard some of my colleagues on the other
side talking about Medicare potentially going bankrupt. The
Affordable Care Act extended the solvency of Medicare, and I
just find it very strange that we fought two wars on the credit
and we have had Bush tax cuts for the wealthy, Medicare Part D
unpaid for. We had surplus Bill Clinton left office and we
could have used that to shore up Medicare, so I think that when
we kind of look at why we are in the trouble we are in, there
is a lot of blame to go around on all sides.
First of all, let me thank all of you for excellent
testimony. Every one of you was really excellent testimony, and
I think it is very, very important. This is an important
subject to have so many questions, and I just have to kind of
cut down.
But let me just say, the SGR is obviously seriously flawed
and needs to be permanently replaced. I really believe that
physicians deserve to be fairly and appropriately compensated
for the important work they do, and the SGR formula is failing
our physicians. I think there is nothing wrong with physicians
wanting to be adequately and fairly reimbursed. And that is why
I want to say that the Affordable Care Act appropriated $10
billion in funding for the Center for Medicare and Medicaid
Innovation over 10 years. I think that is very, very important.
I want to ask this question. Now, all of us recognize the
current fee-for-service model has resulted in emphasis on
procedures and quantity over quality of health care provided. I
am introducing legislation--one field I am particularly
interested in is palliative care, and it relies heavily on care
coordination and communication with patients. I believe they
are vital aspects to providing quality care, but ones that are
not properly incentivized under the current fee-for-service
system, and yet properly done, I think palliative care often
saves money, extends life of patients, and gives them peace of
mind.
So let me ask Dr. Nash, Mr. Serota, and Dr. Patel, what
role do you see for palliative care as the health care system
undergoes extensive delivery system reforms, and how can we
incentivize the integration of palliative care for
professionals into coordinated care teams?
Mr. Nash. Dr. Nash. I believe that--yes, palliative care is
very important, and we have programs within our plan to work
with our physician community and the community at large in
regard to improving care at that phase of life. You know, it is
difficult in a few minutes to talk about how that should be
incorporated into payment models. I think it is a broader
dialog in regard on a community level that many communities
across the country have been successful with.
Mr. Serota. This is an important issue for us, and we do
have a number of plans that--programs in place to help members
with advanced illness. As an example, our Anthem Blue Cross
Blue Shield plan in Virginia has an integrated cancer care
medical management model, which is, at its core, trying to
provide improved access to palliative care. They--members who
receive timely access to palliative care generally achieve a
better quality of life during these end stage, lower cost
related end of life treatment and acute hospitalizations. They
employ skilled care management nurses, decision support tools,
medical director support, and it is a comprehensive program. We
also have a similar program in Pittsburgh with our Highmark
plan that, in fact, provides coverage for consultative services
to its members with palliative care professions to ensure that
that care is appropriate. We think it is an essential element,
and often overlooked, so we appreciate your attention to it.
Mr. Engel. Thank you. Dr. Patel?
Ms. Patel. So very briefly, the concept of a patient-
centered medical oncology home is exactly alluding to the kinds
of services you are referencing, specifically palliative care.
Oncologists right now are caught up in the same quantity over
quality system that we all have to be reimbursed in, and moving
towards a coordination type fee, oncologists have already put
forward ideas and are practicing palliative care referrals as
well as palliative care medicine in the space of their cancer
patients.
Mr. Engel. Thank you. Let me get in one quick question. As
part of the Affordable Care Act, Medicare started paying
primary care physicians a 10 percent incentive payment, and it
is my understanding that more than 156,000 primary care
providers have benefitted from this. Now, I am curious to see
what efforts are being taken in the private sector to
incentivize physicians to practice in primary care. Perhaps Mr.
Serota, Dr. Nash, can you elaborate on how your organizations
are working to encourage physicians to go into primary care?
Mr. Serota. Sure. We have done similar things. We have
increased the rate we pay primary care physicians. An example
in Philadelphia, our Independence Blue Cross plan doubled base
reimbursement to primary care physicians, increased it--paid
out nearly $37 million additional dollars in 2011. Anthem Blue
Cross Blue Shield has announced a major investment in
strengthening primary care, increasing revenue opportunities,
bumped the fee schedule by 10 percent, including payments for
non-visits, essentially care coordination, preparing care
plans, managing patients with complex conditions, and also have
shared savings models for quality improvement and reducing
costs.
So the whole concept is partnership with the primary care
physicians to improve their access to additional funds,
provided the outcomes and the improved safety is present for
our members.
Mr. Nash. Those physicians in our program who commit the
time and energy to work over the period of time towards the
principles of the patient-centered medical home, we put on a
payment model as described which reimburses at a rate that is
20 percent higher in this global model than they were receiving
fee-for-service, and they get another opportunity for 20
percent performance-based bonus, which you know, has attracted
a lot of attention among the physician community.
Mr. Engel. Thank you. Thank you, Mr. Chairman.
Mr. Pitts. Chair thanks the gentleman. I now recognize the
gentleman from Illinois, Mr. Shimkus, 5 minutes for questions.
Mr. Shimkus. Thank you, Mr. Chairman, and I also want to
applaud the panel for being here. I have been a member since
January, '97 I got sworn in, voted for a balanced budget act,
amendments, created the SGR. It has been a bane to my existence
ever since. We did that to preserve and protect Medicare. That
is why we did it. Every year, we have to deal with this, and
for me, it will be 16 years now dealing with the SGR. Also,
just I am glad--and Mr. Gingrey mentioned about the Overseas
Contingency Operations. That is not going to happen. Don't plan
on it. We are not going to use it to fix the SGR, so get that
off the table. That is why this panel is important, because if
we just use that, then we are in the same position. We haven't
reformed, we haven't changed things, we haven't moved forward.
I also want to address this. Medicare, by the actuary, says
it is going to go broke 2024. It did get extended by the $500
billion cuts in--from Obamacare, but the $500 billion also was
supposed to go to help pay for the Affordable Care Act, the
health care bill. We had Secretary Sebelius right in the other
hearing room. She admitted they double counted, double counted
$500 billion. Extend solvency of Medicare, pay for Obamacare.
That is what we are living under. So those who extol the
virtues of that, they are promoting the ability of double
counting $500 billion.
Now Dr. Patel, that is not good budgeting processes, is it?
You wouldn't encourage using the same $500 billion to say you
are preserving and extending Medicare when you are also using
that same money to fund the expansion of health care?
Ms. Patel. I would not encourage double counting.
Mr. Shimkus. Thank you. I would agree.
So let us first--and the other issue is we have always
talked about tort reform. We always talk about insurance--
private insurance being regulated by states. The federalism--we
are back on the federalism bandwagon. I am glad. It helps us
talk about this. Now we are talking about Medicare, but the
tort reform savings, if--are significant, but we have got this
State issue of tort law and federalism that I like to think--I
know the Affordable Care Act did provide some money for states
for pilot programs, which I applaud, and I hope that more
states look at that.
Where am I headed with all this? I am heading with this--I
am glad to hear what we are doing. I don't hear much about the
individual consumer. I hear about the primary practice
physician, I hear about--I mean, the fact that we don't want to
incentivize volume. We don't want overconsumption. We don't
want one size doesn't fit all. Where is the consumer in this?
Anyone?
Mr. Bronson. The word patient-centered is in this effort,
patient-centered medical home. Consumer is really dead set in
the middle----
Mr. Shimkus. Where? How?
Mr. Bronson [continuing]. And it is key--how?
Mr. Shimkus. Under a government-run program, what is the
consumer--what skin do they have in the game financially?
Mr. Bronson. Well, they have whatever co-pays and other
things they have to----
Mr. Shimkus. Significant co-pays really affect change?
Mr. Bronson. I don't know. I honestly don't know.
Mr. Shimkus. Anybody?
Mr. Bronson. Well, I will take that back. I do know. I
think we are seeing a decline in our business and our market
because of very high deductible policies, and people are
second-guessing questions about services and delaying services.
Sometimes it is very effective and appropriate; sometimes it is
dysfunctional. I think it needs to be looked at and organized
in a way that you don't harm the health of the person, but you
don't incent overutilization.
Mr. Shimkus. Let me go to Mr. Serota.
Mr. Serota. Congressman, you put a twist in the question
when you said in a government-run program. I think that what we
are doing in the Blues in our markets is a three-tiered
strategy, and the third tier in that strategy is patient
engagement. A critical element of success for us in the
marketplace has been arming patients with information about
costs, about quality, about which providers to select, and
having them actively participate, and that includes actively
participate economically, as well as with information.
Mr. Shimkus. My time is expiring, and I appreciate that. I
am just going to finish up with this observation. If we don't
do that type of process--health care costs are going up for
everybody, even the private sector. In corporate insurance,
what are they doing? They are incentivizing their workforce
through wellness programs, they are doing healthy living. They
are really pushing people and they push it by what, a price
signal. And if we don't do that in a government-run health care
system and we always expect the Federal Government or CMS or
some agency other than the Federal Government to do that for
them, we are losing the opportunity to really reform our health
care system.
Thank you, Mr. Chairman. I yield back.
Mr. Pitts. Chair thanks the gentleman. I now recognize the
gentleman from Pennsylvania, Dr. Murphy, for 5 minutes for
questions.
Mr. Murphy. Good morning. This is of great concern to me of
how we handle this. Look, we all get it. If all things being
equal, if you pay someone by how many widgets they make versus
giving them a flat salary, they will make more widgets. We
understand that. The question comes of how we reform this, and
we are throwing around a lot of phrases here, you know,
quality, patient-centered, et cetera. I really want to get into
some of the specifics.
I think yesterday the U.S. News and World Report annual
rating of hospitals came out. I don't know if any of you saw
that, big thing about Johns Hopkins was bumped out by Mass
General and who else in the top 10. Are you all aware of how
those ratings are done? Am I correct they survey thousands of
specialists and say who do you like best, right?
Mr. Bronson. They use objective measures.
Mr. Murphy. What are some of the objective measures that
they use?
Mr. Bronson. Some of the CMS measures.
Mr. Murphy. Such as?
Mr. Bronson. The core measures I believe are being used. I
would like to confirm that, but there is a combination and it
depends on the specialty.
Mr. Murphy. Can you give me an example?
Mr. Bronson. An example in psychiatry, for example, they
use almost all reputation as an----
Mr. Murphy. Exactly, exactly. So it is articles they
publish, who knows who. I look upon it as voting for prom king
and queen.
Mr. Bronson. Right, right.
Mr. Murphy. They do not--because you can't survey thousands
of specialists around the country and ask them what hospital
has the best outcome measures? Who has the fewest surgical
complications? Who has the fewest nosocomial infections? Who
has the fewest ventilator-assisted infections? Who has longer
or shorter than expected risk adjustment stay in an ICU? Who
has different rehospitalization rates? Yet am I correct in
saying that those are the kinds of things we need to be
measuring? OK.
Now, I am wondering in that in terms of those--and if there
are other ideas you have, too, how we change this system from
what I refer to as the poke, prod, pinch, push, pull and
prescribe payment system? That is what we get paid for as
health care professionals. We want to pay for quality. In a
very specific way, do we then attach dollar value to some of
these things so if a hospital has a decline in the number of
ICU days, a decline in the number of readmissions, decline in
the number of nosocomial infections, how do we pay for that?
Anybody? Dr. Nash?
Mr. Nash. As mentioned earlier, we do have experience
working with our hospital partners, and we are regional plan.
But it is really a shared savings approach, not too dissimilar
to what Medicare is looking at, and that is we identify
opportunities where there is a chance to improve quality, and
instead of just taking all of that savings and funneling it
back into premium reductions, we are sharing some of that with
the hospitals for the opportunity for them to transform their
systems.
Mr. Murphy. So I just want to make sure, because I am
trying to understand this. I am not trying to put you on the
spot. I have been working this since I wrote the patient bill
of rights law in Pennsylvania where we are fighting managed
care plans who would give a global payment to a practice or
hospital and say you figure it out, and the scandals that came
out of there were people were told you couldn't--you had to
drive by this emergency room because you had to go to this one,
because this is the one that is covered. Or you were not going
to get covered for this, we are going to cover you for that.
And my worry is that I want to make sure we don't get into
those kinds of models where someone is just saying OK, well, we
will save money today so we can get paid with this year's fund,
and if the patient ends up with the problems next year that is
OK, they are probably going to be with a different insurance
company. How do we avoid that? Dr. Patel, you look like you
are----
Ms. Patel. Yes. I want to just say that the two things we
do to avoid that, we shouldn't have something that is so
absolute, like a reduction in ICU days or reduction in that
unless we know that the second piece of information exists,
which is that a reduction in ICU days is actually proven by
evidence to have improved outcome in some way. So the scenario
that you are describing, I think the way to instill-we have all
talked in our societies and in our clinical professions about
some of the metrics that we are coming up with, even as we
speak, to ensure that those exact examples don't happen.
Mr. Murphy. What you just said is absolutely golden, and
something that this committee actually discussed when we read
it was knocked out of the health care bill, and that was if we
allow the societies, the colleges, the specialties in medicine
that have their own protocols to determine things appropriate
as opposed to an IPAB board, it is a big difference. An IPAB
board takes an act of Congress to change what they are coming
up with, but you are saying this is something that the various
professional medical organizations themselves are constantly
looking at?
Ms. Patel. Yes.
Mr. Murphy. Dr. Hoyt, you were going to say something on
that?
Mr. Hoyt. Well, yes. We have spent a lot of time thinking
about this, and in our model, the updates would really require
an annual rethinking of what the new target would be, realizing
that as a group of physicians reach a target, that is no longer
going to incentivize them to reduce costs, so you are going to
have switch the target. But I think if the professional
societies are charged with developing that, they are capable of
it.
Mr. Murphy. Anyone else want to comment on it?
Mr. Serota. Yes, I guess I would just say that in our
programs--we call it Blue Distinction--we used professional
societies to determine the appropriate quality standards, and
we do want to be careful to avoid substituting one piece work
measure for another piece work measure. So if we are not paying
for poking and prodding but we are paying for days reduction,
we still are not getting at paying for outcomes, paying for
better quality and better outcomes, which is where I think we
ultimately have to get.
Mr. Murphy. And I think this is one of those things we
still have to figure out how to do this, because quality is a
very nebulous term. But I still believe that empowering the
professional colleges and societies and panels in medicine is
more important than having an IPAB board by which, by law, has
to be less than half physicians and medical people.
I yield back. Thank you, Mr. Chairman.
Mr. Pitts. Chair thanks the gentleman. That concludes the
members of the subcommittee. We have Dr. Christensen who is
here to ask questions. Dr. Christensen, you are recognized for
5 minutes for questions.
Ms. Christensen. Thank you, Mr. Chairman, and no question,
the SGR has outlived its non-usefulness and we need a new
methodology to fairly and adequately reimburse physicians and
other providers for care. But just to get this off my chest,
for the record, if the system had been set up to pay primary
care physicians for what we have always done, provide patient-
centered care, spend time with patients and their families, and
provide comprehensive care, whether at home, in the hospital,
or in the office, and to coordinate the care with specialists,
we wouldn't be where we are today. The Affordable Care Act,
though, has done much to lay the foundation to change this and
add new models of care that are being tested that you have been
discussing and enable us to once again practice the art of
medicine and again, for the record, it has strengthened
Medicaid, it has improved benefits, and it has actually
lengthened the solvency, rather than hurt Medicare.
But this hearing is a really good beginning to move us
forward. I want to thank the chair and ranking member for
holding it, and thank all of our panelists for their time,
their work, and their thoughtful testimonies.
I want to ask everyone this question. How did the
approaches that you are recommending take into account
physicians and other providers of color or who work in poor
communities where services are very limited, and the patients
are sicker with many co-morbidities, especially when we are
focusing a lot on outcomes? How do we take into account where
that patient started from, and when we are talking about
evidence-based medicine when many people of color, and
sometimes people with other co-morbidities are not in the
clinical trials that produce that evidence?
Mr. Serota. I guess what I would say is our philosophy is--
I mean, the term that has been used up here is one size doesn't
fit all. We really in the Blues believe you have to meet the
physician's practices where they are, and you can't take a
cookbook approach across the country and say it worked here,
therefore it will work everywhere. You have to work with the
local physician communities and the local provider communities
and develop a program that starts from where they are and
provides incentives, information, and data to help them move
the needle forward so that from wherever they are starting
from, you pay and you reimburse for improvements from where
they are, not measures against some mythical standard that
exists on a global basis.
So we really believe that the closer you get to local
management, the better the outcomes and the better results you
are going to get from patient-centered medical homes. So that
is the way we would deal with those issues in all cases.
Ms. Christensen. Dr. Nash?
Mr. Nash. Yes, CDPHP is our region's largest provider of
managed Medicaid services, and we partner very closely with our
federally qualified health centers and other private providers
with large Medicaid populations. We support them not only by
paying them more comprehensively, as I have been describing
this morning, which allows them to sort of deploy those
resources as they see fit for those patients, but we deploy our
own resources and that is we created community health workers
to work in the communities to go outreach the patients to bring
them into the doctors who aren't being seen, as well as putting
pharmacists and behavioral health workers in those practices.
Ms. Christensen. Dr. Bronson, did you want to add?
Mr. Bronson. Well, there is nothing more important that we
learn how to reward practices for improving the health status
of their patients, and you have to go to where they are at and
understand the risk profile of that community, the risk profile
of those specific patients, and have incentives that make sense
for those communities. It is well-observed that certain
demographic characteristics will not support--people with those
characteristics will not achieve the same outcomes as others in
certain areas, and that is very complex. Sometimes is it
socioeconomics, sometimes it is other issues of disparity that
we need to understand. So these have to be adjusted
appropriately to support those practices. We shouldn't
disadvantage those who are helping those in great need.
Ms. Christensen. Thank you. Anyone else want to add?
Mr. Hoyt. Yes, our past president, L.D. Britt, has made the
comment that there is no quality without access. And I think
that has led to us as an organization really trying to profile
where we are deficient in some of those areas. One of them is
in the--sort of the systemus of delivery of care is to assure
that limited access populations, whether it is geographic or it
is economic or color, et cetera, that those are overcome by
getting adequate data. And so we are really making a concerted
effort to make sure that the data we collect at a large
hospital in a large city is the same as the data that we can
collect in a smaller hospital or in a more remote or
financially challenged area to try and identify those problems,
and then start to create solutions for them.
Ms. Patel. One additional thing that the Affordable Care
Act included were provisions for coverage of costs associated
with clinical trials, such that the very issue you describe
with deep disparities in clinical trial enrollment, especially
in cancer, can be dealt with, and that is very important.
Ms. Christensen. I thank you for your answers, and thank
you, Mr. Chairman, for giving me the time.
Mr. Pitts. Chair thanks the gentlelady. That concludes all
the questions from the members. Again, let me say this has been
an excellent panel. Thank you for your testimony, your answers,
and we will send you any further questions from the members----
Mr. Pallone. Mr. Chairman?
Mr. Pitts [continuing]. If you please respond.
Mr. Pallone. Mr. Chairman, I just wanted to--I have heard a
number of my colleagues mention this double counting issue, and
I think it is a red herring, so I am asking to insert Secretary
Sebelius's letter on the matter into the record. I would ask
unanimous consent.
Mr. Pitts. Without objection, so ordered.
[The information follows:]
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Mr. Pitts. I remind members that they have 10 business days
to submit questions for the record, and I ask the witnesses to
respond to questions promptly. Members should submit their
questions by the close of business on Wednesday, July 31.
Without objection, the subcommittee is adjourned.
[Whereupon, at 12:07 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
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