So many health care strategies are aimed at controlling costs that we may be missing the point about value. The trouble inherent in focusing on low cost is that it does not necessarily equal better care.
This point is one health policy experts are starting to deliver to the federal Centers for Medicare & Medicaid Services and to other health care payers, such as managed care companies and health insurers. Focusing on low-cost strategies may be doing a disservice to patients and health plan members, they say.
Writing in The Hill newspaper on April 22, Kenneth Thorpe, Ph.D., chair of the Department of Health Policy & Management in the Rollins School of Public Health at Emory University, criticized a recent proposal from the Medicare Payment Advisory Commission, which advises Congress, on using the “least costly alternative” when making policy decisions. Doing so puts patients into a “one-size-fits-all” model of care delivery, he explained.
“On paper, basing reimbursement on the cheapest available [alternative] could be perceived as a great way to save money… So why not simply set reimbursement levels at the lowest possible level?” he asked. “In practice it puts Medicare policy in between doctors and patients and takes away doctors’ ability to tailor care to the needs of each patient.”
Lacking the ability to tailor care to meet each individual patient’s needs means doctors must assume that all humans are identical in body chemistry, genetic makeup and health status, Thorpe said. In reality, of course, patients have an infinite array of genetic and molecular combinations.
“Consequently, one person might achieve better health from a particular medicine while his or her neighbor may see no health improvement, or even suffer side effects,” Thorpe wrote.
Earlier in the month, Kavita Patel, M.D., Elizabeth Cliff and A. Mark Fendrick, M.D., wrote in the Health Affairs blog about the dangers of focusing on the “one-size-fits-all” approach to benefit design.
“Today’s Medicare beneficiaries face little clinical nuance in their benefit structure. Medicare largely uses a ‘one-size-fits-all’ structure that does not recognize that some treatments, drugs or tests are more important to health than others. Not only does it create inefficiencies in the health system, it can actually harm the health of beneficiaries,” they wrote.
The focus on cost control has led to the idea that Medicare beneficiaries and health care members in general need to pay some portion of the overall cost of care or else they may be inclined to use more care than they need simply because they have health insurance.
But if a patient with diabetes feels fine and forgoes regular eye exams because he or she faces a copayment and deductible, the disease may progress, leading to the need for more expensive care, Patel, Cliff and Fendrick wrote. In other words, higher levels of cost sharing may lead to more costly care.
A beneficiary who faces both financial and behavioral obstacles to treatment adherence is less likely to behave in a way that ensures optimal health, they said. Note that Patel is a fellow and managing director of Delivery System Reform and Clinical Transformation at the Engelberg Center for Health Care Reform at the Brookings Institution. Cliff is a doctoral student at the University of Michigan School of Public Health and previously covered health policy for the Bulletin in Bend, Ore., and U.S. News & World Report. Fendrick is a professor of health management and policy in the School of Public Health at the University of Michigan and the director of the university’s Center for Value-Based Insurance Design.
Patel, Cliff and Fendrick argued that insurance benefits should be more clinically nuanced. “When patients’ incentives are aligned with evidence-based medicine, it improves outcomes, helps patients and, in some clinical situations, lowers costs,” they wrote.
One problem with developing more clinical nuanced benefit designs is that CMS views plans that charge different beneficiaries different amounts for the same service as being inconsistent with the anti-discrimination provisions of the Social Security Act. “This prevents Medicare or Medicare Advantage plans from using clinical information, such as a patient’s diagnosis, to enhance coverage for those with chronic conditions who drive high Medicare spending,” they wrote. “In essence, the requirement precludes Medicare from using the latest science, which shows that offering better access to services for those with chronic conditions can improve health outcomes and offer value to the Medicare program.”
The fact that these issues are being discussed is significant because, in this era of cost control, it’s time to develop more flexible benefit designs that recognize the value of tailoring benefits to meet all patients’ clinical needs.