IPAB is a four letter word
The House is taking up a bill to remove Medicare's independent payment advisory board (IPAB) from the Affordable Care Act. Opponents of IPAB call it a death panel and claim it will ration care. That's nonesense, and flies in the face of the legislation that created the IPAB, which prohitits it from ratioining anything. In fact, the law goes so far to anticiate critics' concerns, real and imagined, that the board is prohibited from almost anything. It can't change benefits, increase the eligibility age for Medicare, increase beneficiary premiums or cost sharing, tamper with eligibility rules, raise revenues in any way, or reduce payments to hsoitpals and hospices until fiscal 2020. What's left is to recommend pay cuts for doctors, other providers, Medicare Advantage and Part D drug plans. The IPAB requirement to recommend cost reductions is triggered when Medicare costs exceed a pre-set limit. IPAB preserves what we love most about the sustainable growth rate formula (SGR), the automitic trigger that imposes physician fee cuts, but extends the reach to more providers and to Medicare health plans. It is unreasonable to expect that IPAB recommendatioins will meet a better fate than the SGR. While the ACA ostensibly makes IPAB cuts automatic unless Congress finds a better way to make the same cuts, in practice Congress can always vote to suspend the IPAB recommendation just as it suspends the SGR cuts.
Of course, the ACA didn't eliminate the SGR, so now we have the SGR plus the IPAB. When Congress suspends an SGR cut, it increases the likelihood that it will be facing an IPAB mandate. So it will get to repeat the SGR drama twice each year.
The IPAB exists because Congress doesn't trust itself to make rational decisions where Medicare is concerned. IPAB is often compared to the base realignment and closing (BRAC) process, which isolates individual members of Congress from accountability for military base closings that hurt their own districs. But BRAC recommendations only touch a few districts, and there are winners as well as losers among the districts affected. IPAB will adversly affect seniors and providers in all districts. So suspending IPAB recommendations will likely become must-pass legislation, even more so that suspending the SGR cuts. And must-pass legislation becomes the vehicle for more bickering, posturing, brinksmanship, and all the things that have earned Congress such contempt.
For its own good, Congress should repeal the IPAB. Not becasue it's going to ration care, but because it will inevitably confront Congress with yet another policy on auto-pilot. An auto-pilot that, by design, will keep trying to fly Medicare into a cliff.
Don't waste your travel budget
We're less than three months from the GHG Forum. This is NOT your usual conference. We've developed a unique educational retreat for management teams working in government programs. I'm thrilled at the presentations our faculty are preparing: we're putting our senior consultants on the stage to deliver case studies, war stories and tales of best practices. But just as importantly, we're building in time for you to react to these sessions with your team--- to develop questions for your track faculty, compare notes, discuss implementing the best practices you've learned about.
We know it's a new concept in an industry that's become accustomed to sales people masquerading as subject matter experts. But we think that's it's badly needed. Many management teams we work with bemoan the lack of time and space to learn, collaborate and plan for success. In this environment, it's easy to simply react. But no one has ever reacted their way to excellence.
No doubt, if you send one to two people they will benefit individually. But isn't the isolation of our departments from each other central to our basic challenge of reforming our plans? We invite you to join other plans (some are sending as many as a dozen attendees) in making the GHG Forum your travel investment for the year. Send a team. We'll show you around.
Right-Wing Senators Offer Competing Medicare Reform Plan
Things are getting more and more curious on the Hill as various factions line up to offer their Medicare reform proposals to kick off budget season. Four far-right Senators -- Rand Paul of Kentucky, Mike Lee of Utah and South Carolina's Lindsey Graham and Jim DeMint -- will unveil a plan Thursday that would transition Medicare beneficiaries into the same health care program offered to federal employees, while gradually increasing the eligibility age and means testing. The proposal arrives less than a week before House Budget Chairman Paul Ryan, R-WI, is expected to release his own Medicare overhaul plan in a fiscal 2013 budget proposal.
The plan would allow seniors to enroll in the Federal Employees Health Benefits Program (FEHBP) beginning in 2014. Everyone in FEHBP pays the same premium, and plans must accept all comers. The proposal would literally phase out the existing Medicare program over an unspecified time period. Instead, seniors would be able to choose from the same options that federal employees (and Members of Congress) have. The proposal "provides Medicare patients with the best health care in America and will forever protect seniors' interests by aligning them with self-interested politicians," a fact sheet said.
Under the senators' bill, the federal government would subsidize three-quarters of the cost of the average plan for enrollees. To prevent health care plans from selecting only the healthiest patients, the government would pay plans 90 percent of the total costs for treating the top 5 percent of their most expensive enrollees. The plan would gradually shift the eligibility age for seniors by three months annually until it reaches 70 in 2034. Wealthier seniors would pay a greater percentage of the costs, and Medicaid would provide assistance to low-income seniors. Republican staffers estimated that the plan would reduce the deficit by $1 trillion over 10 years and reduce Medicare's gap between the cost of promised benefits and its revenue from taxes and premiums by almost $16 trillion over a 75-year window. They also said the bill would save individual enrollees $1,500 per year in out-of-pocket costs.
While from a policy standpoint this isn't a bad concept, in reality this thing doesn't seem to stand a chance in hell. Just giving credence to Democrats' "MediScare" talking points that the GOP wants to "kill Medicare as we know it" -- as it does -- seems a kiss of death, especially in an election year with most 65+ voters more nervous than a long-tailed cat in a roomful of rocking chairs. But it's the timetable of their proposal that also provides a stiff headwind: it would go into effect in 2014, when most other proposals have delayed changes into the next decade so seniors currently enrolled in the program would not be affected.
In his fiscal 2012 budget proposal, Ryan proposed transforming Medicare into a system under which seniors receive government payments to purchase private health insurance plans beginning in 2022. Supporters compared the system to the federal employees' health plan, but Democrats derided it for ending traditional Medicare, saying it would endanger guaranteed health care coverage for seniors.
Ryan will introduce his plan next week with new wingman Sen. Ron Wyden, D-OR, which would create a new competitive insurance marketplace in 2022. Ryan/Wyden would allow seniors to choose between approved private plans in the marketplace and the traditional fee-for-service Medicare model. It would control costs by giving seniors an annual federal subsidy to help pay for the approved private plans or traditional Medicare.
Wyden said this week that he was encouraged by North Dakota Democrat Kent Conrad's enthusiasm for the proposal during a recent hearing of the Senate Budget Committee, which Conrad chairs. Wyden said he would spend the rest of the year trying to build bipartisan consensus for addressing Medicare. With the Senate's most conservative members laying down their own marker, the elusiveness of election-year consensus may be compounded.
Oregon Leads the Way on End-of-Life Planning
Kaiser Health News is out with a terrific story today on Oregon's progress with end-of-life planning for its seniors. The secret to its success has been a simpler-than-expected solution that a number of states have already adopted or are considering, and it's one of the most encouraging signs of progress in the field since the dark days of "Death Panels" during the 2008 campaign.
Oregon has been in the forefront of trying to make sure a person has as much control over the end of his or her life as possible. The state pioneered a form known as a POLST, for Physician Orders for Life-Sustaining Treatment, that has been adopted by 14 states and is being considered in 20 more. The form offers many more detailed options than a simple "do not resuscitate" directive.
The Oregon legislature set up a database several years ago to deal with the problem of inaccessible POLST forms.Now EMTs and doctors can access the state database to see if someone wants to be resuscitated. That database is beginning to generate some interesting facts about the medical interventions people want as they die, according to Dr. Susan Tolle of the Oregon Center for Ethics in Health Care. "We have really learned that this is not a black and white process," Tolle says. "Less than 10 percent of people wanted to refuse all treatment. A majority want some things and not other things." Tolle avoids the topic of whether these detailed end-of-life instructions save money; she is wary of starting another "death panels" debate. But the database has allowed the state to quantify the policy by some measures.
"What we found was that if people marked 'comfort measures only' and 'do not resuscitate' and did not want to go back to the hospital...there was a 67 percent reduction in life sustaining treatments, primarily hospitalization and emergency room visits," says Tolle.
As we've long said, there can be no hope of long-term Medicare solvency without more rational policy and assistance to seniors as they decide how they want to die -- not when Medicare spends 1 in 4 dollars today on care in the last 6 months of life. The POLST solution -- a standardized document with physician support and an accessible database -- is cheap, effective, and should be encouraged by CMS and the Administration. And it's heartening that Senator Ron Wyden is from Oregon and deeply enmeshed in these issues -- Oregon's approach should be embodied in his work with Rep. Paul Ryan on Medicare reform next year.
Word for the day: Volatile
Volatile. n. Fickle, inconsistent, easily vaporized.
Thanks to the Affordable Care Act, Medicare Advantage finances are going to be volatile. Unwary actuaries may be easily vaporized.
The new benchmarks, the "specified amount" under the ACA, are based on which quartile a given county is in. Quartiles are defined by average FFS costs. ACA benchmarks range from 95% to 115% of local anticipated Medicare FFS spending in the county, depending on which quartile a county is in. Every time CMS rebases the FFS calculations, a county can change quartiles. The preliminary list of quartile-jumpers for 2013 moves 27% of all US counties, with about 27% of MA beneficiaries, from one quartile to another. Depending on which quartile you start in and where you end up, that's a change in payment of 5% to 7.5% -- or more in the few counties that move more than one quartile. That's a lot of money to have to cut, if you go the wrong direction. Or a lot to have to quickly absorb in new benefits if you go the other way -- since, with the 85% loss ratio floor coming up in 2014, a plan can't simply stash the extra cash in profit.
We won't have the final list of the new quartiles until April 2. And bids are due June 4! That's a scant 2 months to figure out how to either (a) cut 5% or more out of your bid, or (b) add new benefits to absorb the windfall.
When adding benefits, plans will need to keep in mind that the process can reverse with the next rebasing -- in 3 years or less. Added benefits need to be planned like chess moves. What can we add that will help us now, but which won't hurt too much if we have to withdraw them later?
Plans should be doing some serious contingency planing, so they are ready when the rates and quartiles get recalculated. For 2013, the time to start planning is immediately after reading this blog. The preliminary list of county quartiles is a start, but remember that it's subject to change. Any plan with a significant number of members in counties close to the bubble between quartiles should be getting ready now, in case they have to make some quick decisions when preparing their bids.
To add to the fun, double bonus counties can change, too, based on their newly re-based FFS costs relative to the national average. For some plans that qualified for a double bonus in 2012, the rebasing of FFS could make half the bonus disappear in 2013 in some counties. Or, your bonus could double in 2013 in counties that newly qualify for the double bonus. That's more chaos in the bid building process.
The more i think about the quartile system, the more I'm beginning to like competitive bidding as an alternative. Works for part D, after all.
Glass Half Full on Medicare Reform Prospects
Former CMS Administrator and friend of the firm Gail Wilensky, MD is out with a great op-ed piece in the New England Journal of Medicine today on directions for bipartisan Medicare reform. She echoes many of our recent thoughts on the improving prospects for Medicare reform, not in this hotly-contested election year, but as part of deficit reduction in 2013. Her piece covers the gathering momentum behind the Ryan/Wyden reform proposal, as well as structural changes previously thought unthinkable, such as increasing the eligibility age for the program, further means testing, and a targeted growth rate for our favorite entitlement program. We can thank both President Obama and Speaker Boehner for enabling discussion of these reforms since broaching them during the disastrous debt-ceiling debate last summer.
I thought the most compelling part of Dr. Wilensky's argument is her assertion that we have turned the corner on recognizing that the traditional fee-for-service paradigm of Medicare is unsustainable. She notes "growing agreement that a fee-for-service system like Medicare's, which reimburses physicians for some 7000 discrete services, is inconsistent with achieving the care coordination needed by seniors with multiple chronic conditions or complex acute care needs. To me, this growing disillusionment with the incentives and rewards of fee-for-service medicine is the most surprising evolution in thinking of the past quarter century and offers the greatest promise for success in developing a replacement, whatever its parameters."
We agree, and would add that the experience of Medicare Advantage and Part D show the only true path to securing the fiscal solvency of the program is through capitation and care coordination of the chronically ill. It's encouraging to hear a policy luminary like Gail point out that we're closer than we may think to some consensus on new approaches to preserving Medicare for the long haul.
It's Super Tuesday and Romney Still Gets No Respect
Today is Super Tuesday, the biggest event thus far in the Presidential race, with more delegates at stake for the GOP candidates than any other primary or caucus to date. Mitt Romney was supposed to have the nomination locked up by now; instead, as today's Wall Street Journal points out, he's more like the Rodney Dangerfield of politics: he just can't get no respect. Don't get me wrong, I'm still convinced it's Romney vs. Obama in November -- but after months of campaigning, the enthusiasm gap that's evident only favors the incumbent President.
Romney will likely have a strong showing today in Massachusetts, Vermont, and Virginia, where he has only Rep. Ron Paul as competition. But the biggest delegate yields are in Ohio (63 delegates), Tennessee (55), and Oklahoma (40), where Rick Santorum has a strong lead. In Georgia, Gingrich's home state, there are 76 delegates at stake. None of these contests are winner-take-all -- each candidate has the opportunity to compete for delegates in parts of each state where they are strong.
Today's new Journal/NBC News poll shows the primary process has worn away the overall enthusiasm edge that Republicans, desperate to oust President Obama, were supposed to have:
![[CAPJOURN]](http://si.wsj.net/public/resources/images/NA-BP702_CAPJOU_NS_20120305162703.jpg)
The new survey shows that both parties' registered voters are virtually even in members expressing great interest in the election -- and the share of Republicans excited about the race has dropped 10 percentage points since January. The big concern for Romney has to be the trend line on the independents, who are being turned off by the renewed culture war ignited by Santorum, Gingrich, and the right wing of the party. Weeks of gunfights on birth control, pre-abortion invasive ultrasounds in Virginia, gay marriage, whether the President is a "snob" for wanting Americans to have the opportunity to go to college, and anything-but-the-economy shows that 40 percent of American adults think less of the party after watching its transformation this electoral season -- especially independent women.
Driven by an intensifying ideological purity test that brings to mind a white, working-class, ultra-religious "American Taliban" (as the Journal points out, Democrats don't require their presidential candidates to declare repeatedly that they are liberals, thereby pushing themselves away from the center of the political spectrum), the GOP has come to stand for "God's Own Party" in these last few months, and likely voters are tuning out as a result. A notable casualty: centrist Republican Senator Olympia Snowe of Maine decided not to run this week after all -- a big loss for her party, both for her deal-making skills and the likelihood her seat will go to an Independent, popular former Governor Angus King.
As the Journal pointed out today, "Mr. Romney has a tough job, for the Republican party is a hard one to lead right now. Any party that is trying to simultaneously win over Wall Street money managers and the tea-party movement, and to win Hispanic votes while championing the tough immigration laws of Arizona and Alabama, has laid out a tough task indeed...So Mr. Romney would have to raise sagging numbers among independents, light a fire beneath an underenergized party base and confront a president whose approval ratings are moving higher."
Not a pretty picture for the GOP, and with every day the Republicans' internecine and cultural warfare continues, the further victory drifts from their grasp. The big question to my mind now is whether the renewed culture war from the far right has cost the GOP not only the White House, but the US Senate as well...and with it, any prospect of stopping health reform before it launches in 2014.
Preaching to the Converted on Medicare Reform
Politico is out with a great op-ed today from centrist thought leader Will Marshall on why the Ryan/Wyden Medicare reform plan deserves a fair hearing -- especially among Democrats. He's preaching to the converted here at GHG -- the Wall Street Journal noted our support for the plan last week in Fred Barnes' column.
I agree with Will (as I usually do; Will and I are both former Clintonians and he is the longtime leader of the Progressive Policy Institute, one of my favorite centrist think tanks) -- we like the concessions Ryan's made to his plan in order to get Senator Wyden (D-OR) to support it, and remain hopeful (though not delusional) that both parties can put aside "Mediscare" tactics this election year for a thoughtful discussion about it. More likely it'll be next year, after the dust has settled from this messy race and the deficit reduction debate begins again in earnest.
Medicare Advantage Hospital Readmission Rates Substantially Lower than FFS
An article in the American Journal for Managed Care found that Medicare Advantage (MA) patients experienced a much lower 30 day hospital readmission rate than FFS patients. The study found the MA readmission rate was 14.5 percent during 2006-2008, which was 22 percent lower than the FFS readmission rate. After adjusting for risk and excluding disabled beneficiaries, the study found that MA readmission rates were 13 to 20 percent lower than FFS. MA capitation rates provide a strong financial incentive for MA plans to reduce avoidable hospitalizations and readmissions, for example through the use of case management or network contracting arrangements. FFS has no incentives to control avoidable readmissions but that should change under a new program announced in 2011 that seeks to reduce FFS readmission rates by 20 percent.
How Doctors Die
Today's Wall Street Journal opinion page included a terrific op-ed on how physicians approach their own end of life care planning differently than most of their patients do, primarily because they actually understand the limitations of American medicine in prolonging life, and because they actually plan for the end.
The author, Dr. Ken Murray, a professor of family medicine at USC, wrote: "It's not something that we like to talk about, but doctors die, too. What's unusual about them is not how much treatment they get compared with most Americans, but how little. They know exactly what is going to happen, they know the choices, and they generally have access to any sort of medical care that they could want. But they tend to go serenely and gently. Doctors don't want to die any more than anyone else does. But they usually have talked about the limits of modern medicine with their families. They want to make sure that, when the time comes, no heroic measures are taken."
"Unlike previous eras, when doctors simply did what they thought was best, our system is now based on what patients choose. Physicians really try to honor their patients' wishes, but when patients ask "What would you do?," we often avoid answering. We don't want to impose our views on the vulnerable. The result is that more people receive futile "lifesaving" care, and fewer people die at home than did, say, 60 years ago. Nursing professor Karen Kehl, in an article called "Moving Toward Peace: An Analysis of the Concept of a Good Death," ranked the attributes of a graceful death, among them: being comfortable and in control, having a sense of closure, making the most of relationships and having family involved in care. Hospitals today provide few of these qualities. Written directives can give patients far more control over how their lives end. But while most of us accept that taxes are inescapable, death is a much harder pill to swallow, which keeps the vast majority of Americans from making proper arrangements."
I come from a family of doctors, and my Mom is an accomplished family physician specializing in palliative and end-of-life care. This is an issue we're passionate about in our family, and one I've pontificated on. And Dr. Murray nails the point here: those who know plan for the end, as we all need to.
But in the sudden resurgence of the culture wars during this GOP primary season, and the fact that at least two of the leading candidates -- Rick Santorum and Newt Gingrich -- had starring roles in the Terri Schiavo circus, it seems unlikely we'll get a meaningful discussion of end-of-life care as part of Medicare reform anytime soon. We live in an age of distortions like "Death Panels," where open dialogue on end of life is politicized and limits on what Medicare will cover are demogogued as rationing.
As I said back in October, Medicare Advantage plans are uniquely positioned to advance the cause of professional counseling for beneficiaries on their last wishes, preventing unnecessary surgeries based on the patient's preferences and likely clinical outcomes, and promoting the enthusiastic use of palliative care. A number of plans are leading quietly in this area, like UPMC in Pittsburgh, Excellus Blue Cross/Blue Shield in upstate New York (which actually has dedicated medical directors for end of life and palliative care), and any PACE site like On Lok in San Francisco.
We have much to learn from these end-of-life pioneers — they should be applauded and emulated for their courage in the face of the politics of end of life care.