The past week might be one that Republican presidential candidates and the designers of CMS pilot programs will want to forget. Disappointing results. Funny numbers. The need for better PR. And that's just Mitt Romney.
What the candidates and CMS may have in common is the need for some good news, and, especially for the Centers for Medicare & Medicaid Services, there was none to be had.
For years, the conventional wisdom was that many of the CMS pilot programs designed to slow down spending would deliver the goods. But a January report from the Congressional Budget Office pointed out just the opposite that most of the pilot programs over the past two decades have produced disappointing financial results. Only two of 18 programs with fees at risk in disease and care coordination programs reduced total Medicare spending noticeably. And among four large demonstrations that altered the financial incentives paid to providers, only a program designed around bundled payments produced significant savings for Medicare.
One of the themes of the new CBO report is the failure by many of the pilot programs to reduce hospital admissions enough to offset fees associated with the greater use of care managers. Among 34 DM and care coordination programs (of which the above-mentioned 18 programs are a part), hospital admissions fell by an average of 7 percent and regular Medicare spending fell by 6 percent in programs where care managers had substantial interaction with physicians.
That sounds like positive news on the face of it, but the CBO says that the programs would have had to reduce regular expenditures by 13 percent, on average, to offset the fees for the coordinators.
The news from the value-based payment demos wasn't much better. Three programs were highlighted: the 10-year Physician Group Practice demo involving 10 large group practices; another involving 278 hospitals paid bonuses based on quality-of-care measures; and the heart bypass demo involving bundled payments for all inpatient hospital and physician services. The star of this bunch was the last one, which reduced Medicare's spending for heart bypass surgeries by about 10 percent without adverse effects on patients outcomes, the CBO says.
Over the years, HealthLeaders-InterStudy has tracked the PGP demo involving physicians, who have reported mixed views on the program featuring incentive payments for meeting quality metrics for their patients. The CBO says while CMS was able to share bonuses with several of the groups over the duration of the program, there's not yet any data to support it produced savings overall.
In CMS defense, there's not yet full data for the full PGP program, but we all might want to hope that when it does come in, it will prove to do better than these early results. Several of the PGP groups, including Dartmouth-Hitchcock in New England, are using the PGP as the basis for their decision to participate in the new Pioneer accountable care organization program.
If, three to five years from now, we find the Pioneer ACOs did no better than these demo projects, it may really be time to worry that care coordination, at least for old and sick Americans, is, at best, budget neutral.