What’s the downside to value-based purchasing and pay for performance?

Joseph Burns

About Joseph Burns

Joseph Burns (@jburns18), a Massachusetts-based independent journalist, is AHCJ’s topic leader on health insurance. He welcomes questions and suggestions on insurance resources and tip sheets at joseph@healthjournalism.org.

Pay for performance (P4P) is often touted as one of the best ways to improve health care quality. In most P4P programs, health plans pay physicians and hospitals more if they meet certain quality targets.

Image by Colin Dunn via flickr.

Image by Colin Dunn via flickr.

The federal Centers for Medicare & Medicaid Services has adopted a version of P4P for hospitals called Hospital Value-Based Purchasing, which we covered last year. CMS has a similar program for doctors, called the Physician Quality Reporting System.

In theory, P4P and VBP give commercial and government health insurers a way to incentivize physicians and hospitals to deliver services designed to improve patient outcomes. Physicians can earn more for following patient-care guidelines, for example.

P4P and VBP are thought to help counteract the perverse incentives built into fee-for-service payment in which the more care physicians and hospitals deliver, the more they get paid.

But a recent report raises questions about CMS’ value-based purchasing program and pay for performance in general. This report is more than a critique of VBP and P4P. It is an excellent primer on what’s wrong with how commercial and government insurers pay for health care and how their methods of payment are not designed to produce the most desirable outcome: better patient health.

The report (PDF), by Harold D. Miller, president and CEO of the Center for Healthcare Quality and Payment Reform, “Measuring and Assigning Accountability for Healthcare Spending,” thoroughly explains the problems with P4P, VBP, and fee-for-service. Sabriya Rice in Modern Healthcare covered the report well as did Cheryl Clark in HealthLeaders. Clark called the nation’s current payment formulas “Kafkaesque.”

Health care journalists would do well to read this report because it’s an impressive undertaking that explains how the U.S. health care system works, what’s wrong with how we pay for care, and how some payment reform methods could fix these flaws. The report would serve as a useful guide for any articles on payment reform.

In discussing the fundamental problems with current spending methods, for example, Miller, an adjunct professor of public policy and management at Carnegie Mellon University, names and explains six of them as follows:

  1. Many patients and many aspects of spending are not attributed to any physician or other provider.
  2. The physician or organization that is attributed spending for a patient may not have control or influence over many of the services that a patient received.
  3. Many providers are not attributed the spending that they can control.
  4. No distinctions are made between necessary and avoidable services.
  5. Comparisons of spending across providers do not adequately adjust for differences in patient needs.
  6. Comparisons of spending do not adequately adjust for structural differences in costs among providers.

Later in the report, Miller gives five examples of payment methods that would address these flaws: bundled payment, warranteed payment, episode payment for a procedure, condition-based payment, and global payment.

Miller clearly explains some of the biggest flaws in how insurers pay for most care. “Some services that could lower overall spending aren’t paid for adequately or at all,” he writes. “For example, Medicare and most health plans don’t pay physicians to respond to a patient phone call about a symptom or problem, even though those phone calls can avoid far more expensive visits to the emergency room. Medicare and most health plans won’t pay primary care physicians and specialists to coordinate care by telephone or email, yet they will pay for duplicate tests and the problems caused by conflicting medications.”

Image by Colin Dunn via flickr.

He also explains why physician practices have no incentive to care for high-risk patients. Health plans typically don’t pay for physicians to hire staff to educate these patients on self-care management even if such education would help avoid an expensive inpatient stay, he writes.

And, more seriously, he writes that under fee for service, all providers are penalized financially for reducing unnecessary services. “Most fundamentally, under the fee for service system, providers don’t get paid at all when their patients stay well.”

In other words, our current payment methods do not do what any health policy expert would want them to do: provide incentives to keep patients healthy.

What’s really driving health inequalities

Joe Rojas-Burke

About Joe Rojas-Burke

Joe Rojas-Burke is AHCJ’s core topic leader on the social determinants of health. To help journalists broaden the frame of health coverage to include factors such as education, income, neighborhood and social network, Rojas-Burke will hunt for resources, highlight excellent work and moderate discussions with journalists and experts. Send questions or suggestions to joe@healthjournalism.org or tweet to @rojasburke.

The U.S. and other wealthy nations have practically eliminated all of the infectious diseases that seemed to account for the unequal burden of death in poor households and neighborhoods in earlier times. And yet inequalities in mortality have continued at more or less the same level since at least the early 1800s. What has changed are the major causes of death, which are cancers and chronic disease of the heart and vascular system.

Social scientists Jo Phelan and Bruce Link were among the first to make the case that inequalities in health are unlikely to change unless policy makers address inequalities in income, education and social status. Link and Phelan developed an influential theory that describes how social forces are the fundamental causes of health disparities.

A new key concept in AHCJ’s core topic area on the social determinants of health gives a quick overview of fundamental causes theory, the supporting evidence, and the implications for health policy. The theory predicts that interventions that aim solely to change individual risk factors will tend to worsen social inequalities in health, and there is some evidence that this really happens. Read more…

Will increased revenue at for-profit hospitals lead more states to expand Medicaid?

Joseph Burns

About Joseph Burns

Joseph Burns (@jburns18), a Massachusetts-based independent journalist, is AHCJ’s topic leader on health insurance. He welcomes questions and suggestions on insurance resources and tip sheets at joseph@healthjournalism.org.

Photo by Jonathan Haeber via Flickr

Photo by Jonathan Haeber via Flickr

Will large hospital systems start to pressure officials in the states that have not expanded Medicaid now that their revenues have increased more than expected in the 26 states that expanded Medicaid under the Affordable Care Act?

That question seems obvious given the results of a new report (pdf) by PwC’s Health Research Institute that showed increased revenue among the nation’s five largest for-profit hospital chains in Medicaid expansion states. The PwC report shows that in states that expanded Medicaid, the five for-profit chains—Community Health Systems (CHS), HCA Holdings, LifePoint Hospitals, Tenet Healthcare and Universal Health Services (UHS)—had more insured and fewer uninsured patients in the first half of this year than they did in the first half of 2013. Hospitals in non-expansion states experienced the opposite, the consultants said. These chains run 538 hospitals in 35 states.

PwC analyzed quarterly earnings reports filed with the SEC, industry surveys and conducted interviews with hospital executives to report that the five hospital chains saw Medicaid admissions rise 10.4 percent to 32 percent since Jan. 1. At the same time, all five hospital chains reported that admissions among self-paying patients declined sharply in all states as well. Self-paying admissions dropped by 14.7 percent at CHS, by 6.6 percent at HCS, by 30.3 percent at LifePoint, by 6.5 percent at Tenet and by 9.3 percent at UHS, the report showed.

Continue reading

Cultural perceptions of aging affect health status, caregiving

Liz Seegert

About Liz Seegert

Liz Seegert (@lseegert), is AHCJ’s topic editor on aging. Her work has appeared in Kaiser Health News, The Atlantic.com, New America Media, AARP.com, Practical Diabetology, Home Care Technology report and on HealthStyles Radio (WBAI-FM, NYC). She is a senior fellow at the Center for Health, Media & Policy at Hunter College, NYC, and a co-produces HealthStyles for WBAI-FM/Pacifica Radio.

Images by Judy Baxter, NCVO and Steven Gray via Flickr.

Images by Judy Baxter, NCVO and Steven Gray via Flickr.

A new study out of the United Kingdom reinforces the influence that culture and societal attitudes can have on the health status of older adults. Psychologists from the University of Kent used data from the European Social Survey to ask respondents, all age 70 or older, to self-rate their health.

In countries where old age is thought of as signifying low status, participants who identified themselves as ‘old’ felt worse about their own health. The opposite was true in places where older people have a perception of higher social status. The researchers concluded that elevating perceived social status of older people would reduce negative connotations associated with old age and the negative impact on how healthy people felt.

The value different societies place on the elderly has a lot to with how they are cared for later in life, evolutionary biologist Jared Diamond explained in a recent TED talk. These effects in turn, influence public policy for global long-term services and supports. The International Federation of Social Workers recently noted, “Although older adults serve as essential resources to their communities, they face a great risk of marginalization.” Continue reading

Thousands face Friday deadline to document citizenship, immigration status for federal marketplace

Joanne Kenen

About Joanne Kenen

Joanne Kenen, (@JoanneKenen) the health editor at Politico, is AHCJ’s topic leader on health reform and curates related material at healthjournalism.org. She welcomes questions and suggestions on health reform resources and tip sheets at joanne@healthjournalism.org.

Image via USCIS.gov

Image via USCIS.gov

Friday is the deadline for some 350,000 people who have yet to document their citizenship/legal residency for their health insurance through the federal exchange to get the information submitted and verified or face losing insurance at the end of this month.

It would be a good time to check with health, enrollment and immigrant advocacy groups in your community to see what kind of obstacles they are facing (technical, language barriers, poor communication, confusion) and what steps they are taking to meet the deadline. The Centers for Medicare & Medicaid Services says it has been trying to reach the affected people by email, mail and telephone. Immigration advocacy groups say that the outreach has left a lot to be desired and people are having trouble getting problems sorted out. Continue reading

Poor sleep tied to higher suicide risk in elders

Liz Seegert

About Liz Seegert

Liz Seegert (@lseegert), is AHCJ’s topic editor on aging. Her work has appeared in Kaiser Health News, The Atlantic.com, New America Media, AARP.com, Practical Diabetology, Home Care Technology report and on HealthStyles Radio (WBAI-FM, NYC). She is a senior fellow at the Center for Health, Media & Policy at Hunter College, NYC, and a co-produces HealthStyles for WBAI-FM/Pacifica Radio.

Image by Alex via flickr.

Image by Alex via flickr.

The recent suicide of actor/comedian Robin Williams has put a spotlight on suicide and depression. However, older adults who suffer from sleep problems are at even greater risk of suicide, according to a recent study published in JAMA Psychiatry.

Researchers investigated the relative independent risk for suicide associated with poor subjective sleep quality in a population-based study of 14,456 community-dwelling older adults (age 65+) during a 10-year observation period. They compared the sleep quality of 20 suicide victims with the sleep quality of 400 similar individuals during that time. Participants with dysfunctional sleeping patterns had a 1.4 times greater chance of death by suicide than well-rested people.

Even after adjusting for depressive symptoms, they concluded that poor subjective sleep quality appears to present “considerable risk” for severe suicidal behaviors 10 years later.  Risk increases among patients with multiple illnesses. Continue reading

Calif. dental board allows complaints to accumulate outside public view

Mary Otto

About Mary Otto

Mary Otto, a Washington, D.C.-based freelancer, is AHCJ's topic leader on oral health, curating related material at healthjournalism.org. She welcomes questions and suggestions on oral health resources at mary@healthjournalism.org.

Photo by courtney0609 via Flickr.

Photo by courtney0609 via Flickr.

Reporter Rachel Cook took a long and detailed look at the career of one Bakersfield, Calif., dentist and ended up with a series called “Dental Dangers,” recently published in The Bakersfield Californian.

The stories examine a history of complaints and lawsuits against Robert Tupac, who, as a board-certified prosthodontist, specializes in the restoration and replacement of teeth. Over three decades, more than a dozen of Tupac’s patients claimed his shoddy work left them with troubles ranging from bone loss to drooling, Cook wrote, and some patients reported that it would take thousands of dollars worth of corrective work to undo the harm.

In her reporting – done as a 2013 California Health Journalism Fellow – Cook described a state dental board system that allowed the alleged problems with the dentist to pile up outside public view. “A potential patient searching for competent dental care would never know about many of Tupac’s alleged professional shortcomings — or those of any other California dentist — without undertaking extensive and often difficult research,” Cook wrote. Continue reading

Georgia develops ‘accountability’ dementia plan

Alyssa Stafford

About Alyssa Stafford

Alyssa Stafford (@alyssastafford) is a graduate student at The University of Georgia, studying health media and communication. She is also a freelance writer and communications strategist.

Photo by John via Flickr.

Photo by John via Flickr.

Georgia has a new task force targeting Alzheimer’s disease and related dementias. The recently published Georgia Alzheimer’s Disease and Related Dementias State Plan lays out a strategy for addressing the needs of patients in terms of care and prevention, the impact on caregivers, and the costs associated with the disease.

The task force is led by James Bulot, Ph.D., director of Georgia’s Division of Aging Services. According to Bulot, 40 states have dementia plans at various stages. The Georgia plan assesses the risk for citizens in the state and takes inventory of services available to Georgians. It also outlines the importance of finding gaps in resources available on a state level.

Bulot believes the Georgia plan will be different because he’ll hold the task force accountable for progress. Unlike other plans which may be updated every five or 10 years, the Georgia plan will be continually modified to reflect changing scientific knowledge and statistics. Continue reading

AHCJ disappointed with ACGME’s response on transparency

Charles Ornstein

About Charles Ornstein

Charles Ornstein is a senior reporter with ProPublica in New York. The Pulitzer Prize-winning writer is a member and past president of the Association of Health Care Journalists' board of directors and a member of its Right to Know Committee.

ACGME-Response8-12-2014-1The Accreditation Council for Graduate Medical Education has rejected a request from AHCJ to publicly release additional information about the successes and failures of physician training programs nationwide.

Earlier this month, AHCJ called upon ACGME to release details about residency programs with less than full accreditation, as well as the rates at which graduates of residency programs pass their board certification examinations. ACGME posts decisions on favorable or less-than-favorable accreditation status but not the reasons for them.

Replying to AHCJ’s Aug. 5 letter, ACGME executive director Thomas J. Nasca, M.D., wrote that the organization would not provide the requested information, citing the confidentiality of ACGME’s review and decision process.

AHCJ president Karl Stark said he was disappointed by ACGME’s response. Continue reading

How social position affects health behavior

Joe Rojas-Burke

About Joe Rojas-Burke

Joe Rojas-Burke is AHCJ’s core topic leader on the social determinants of health. To help journalists broaden the frame of health coverage to include factors such as education, income, neighborhood and social network, Rojas-Burke will hunt for resources, highlight excellent work and moderate discussions with journalists and experts. Send questions or suggestions to joe@healthjournalism.org or tweet to @rojasburke.

People whose socioeconomic status is low are more likely to act in ways that harm their health compared with those higher on the ladder of income and social stature. On average, they smoke more, exercise less, have poorer diets, and more often ignore health advice and fail to comply with treatment. As a group, they are even less likely to use seatbelts.

Researchers have proposed many theories to explain why this is so, and these involve more than the inability to pay for goods and services that promote health.

Investing less in health behavior may be a positive adaptation to socioeconomic deprivation, according to a theory inspired by evolutionary biology. In other words, it’s like deciding to spend little on car maintenance when you live in a neighborhood of rampant car theft. Living under threat of high mortality from outside causes may set a limit on how much energy it is worth to put into lowering mortality from internal causes.

So far, there is no grand unified theory that accounts for all social, psychological and political forces that press on people on the lower rungs of the socioeconomic ladder. In an informative review, Fred C. Pampel, Patrick M. Krueger, and Justin T. Denney break down the evidence for and against nine major pathways by which socioeconomic status shapes health behavior. Learn about those pathways.