Fellowship HVC Curriculum 20162017 Presentation 2 of 7 Learning Objectives Define three types of health care costs Describe how traditional payment models promote cost variation and lack of price transparency ID: 680426
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Slide1
Health Care Costs and Payment Models
Fellowship HVC Curriculum 2016-2017
• Presentation 2 of 7Slide2
Learning ObjectivesDefine three types of health care costs.
Describe how traditional payment models promote cost variation and lack of price transparency.
Calculate out-of-pocket expenses depending on insurance status, type of plan, and setting of care.
Weigh the impact of out-of-pocket expenses on the ability to adhere to recommendations.
Describe recent value-based payment reforms.Slide3
Case #1 : Patient Perspective1
Read this brief summary of how a patient balances her need for periodic thyroid biopsies with her out-of
-
pocket costs:
http
://www.costsofcare.org/high-costs-of-important-procedures/Slide4
Health Care CostsCharges
: What hospitals and other delivery systems charge is often much higher than reimbursements; only uninsured patients are billed charges (these are highly variable)
Reimbursement
: Set by
M
edicare and
M
edicaid or negotiated with insurance plans as percentage of charges; may drive charge inflation
Out of pocket
: Hardest number to estimate because it varies based on insurance and geography, but this matters most to patientsSlide5
Case #2 A 65-year-old man is evaluated in
a clinic in Lebanon, NH, for
lightheadedness and found to have a systolic murmur and diminished carotid pulses on
exam.
T
ransthoracic echocardiography
is ordered to look for evidence of aortic stenosis.Slide6
Case #22
Use the calculator below to estimate the patient’s out-of
-
pocket expenses for the echo, and compare the results based on the following three insurance variables: no insurance, Medicare, private high-deductible plan ($5,000 deductible, $75 copay)
http
://
www.dartmouth-hitchcock.org/billing-charges/out_of_pocket_estimator.html
Slide7
Case #2
Identify a commonly ordered test in your
subspecialty,
and compare
out-of
-
pocket
expenses for that test based on the three insurance
variables:
no insurance, Medicare,
private high-deductible
plan ($
5,000 deductible,
$75 co-pay)
Were
you surprised by how much the out-of-pocket expenses varied based on
insurance?
Should
this knowledge impact your clinical recommendations?
If
so, how should it?Slide8
Sources of Health Insurance (2013)3
Medicare and Medicaid spending
39% of national health spending
23% of federal budget
43% of hospital revenues
Employment based 54%
Medicaid 17%
Medicare 16%
Individual private insurance 11%
Military 5%
Uninsured
13%Slide9
Individual Private Insurance3
Individual policies involve
a person
paying a premium directly to a “health plan” or insurance company, which reimburses
providers
Individual policies
provided
health insurance for
approximately
6%
of
the U.S
.
population
in 2014Slide10
Employment-Based Private Insurance3
Employers
often
pay all or part of the premium that purchases health insurance for their
employees (
covers approximately 48% of the U.S. population
)
This is a tax-deductible business
expense,
and the government does not treat the health insurance fringe benefit as taxable income to the
employee
Therefore, the government
is,
in
essence,
subsidizing employer-sponsored health
insurance
This subsidy was estimated at $
200 billion/year in 2006Slide11
Government-Financed Insurance4
Medicare Part
A
Hospital insurance plan for the
elderly
Financed through social security
taxes
At age
65 years
, patients
who have paid >10
years
into SSI
are
automatically enrolled
Those
<65 years of age who are
totally
and permanently disabled
may enroll after 24 months of disability
Those with ESRD on HD usually enrolled without wait period
Medicare Part B Insures the elderly for physicians’ services
Financed by federal taxes and monthly premiums from beneficiariesAvailable to those eligible for Medicare Part A who elect to pay the Medicare Part B premium of
$
147/month
(
2015) adjusted upward according to incomeSlide12
Medicare Prescription Coverage4
Medicare Part
D
Voluntary prescription coverage that is added to original Medicare
Plans have monthly premiums in addition to that paid for Part B
Deductibles vary but may not exceed $360/year (2016)
Beneficiaries may owe a late enrollment penalty if they are without drug coverage for >63 days
Medicare
Advantage Plan
Beneficiaries can enroll in a private health plan to receive Medicare-covered benefits
Plans cover Medicare Parts A and B and usually D
One MUST have Medicare Parts A and B to sign upSlide13
Government-Financed Insurance5
Medicaid (varies by state)
Federal program administered by the
states
F
ederal
government
P
ays
between
50% and 76%
of total Medicaid
costs
R
equires
that a broad set of services be
covered,
including hospital, physician, laboratory, x-ray, prenatal, preventive, nursing home, and home health
servicesSlide14
The Affordable Care Act of 20106
Affordable Care Act (
ACA = Obamacare
)
Aims: To decrease the number of uninsured Americans and reduce health care costs through insurance reform
Expansion of coverage:
Medicaid expansion:
S
ets
the Medicaid minimum income eligibility
across
the
U.S.
to <
138%
of the federal poverty
level
Includes District
of Columbia and 28 states as of March 2015Health insurance exchanges:
Competitive markets with clear information to assist persons in purchasing insurance; subsidized for families with income <400% of the poverty levelFor the first time, low-income adults without children are guaranteed coverage without needing a waiverSlide15
Pre-ACA: Who Were the Uninsured?6
Adults without dependent children
Low- or moderate-income families (income <400% of the poverty level)
Working families without access to employer-sponsored insurance coverage
Undocumented personsSlide16
Access to Health Care6Slide17
Does Health Insurance Make a Difference?
6,7
Uninsured
Fewer regular medical visits and preventive health
screening tests
Higher rates of undiagnosed and uncontrolled HTN,
diabetes,
and hypercholesterolemia
Lower survival rates for breast and colorectal
cancers
Increased mortality (likely owing to greater morbidity from chronic medical conditions like diabetes, HTN, and cardiovascular disease
)
Worse clinical outcomes during hospitalization
May lead to underuse and/or overuse
Higher in-hospital mortality ratesSlide18
Traditional Methods of Payment(Health Provider Reimbursement Models)
Diagnosis-Related Groups
(DRGs
)
Physician or hospital is paid one sum for all services delivered during one illness; there is a different set case-price for each of approximately 750 distinct DRGs (Medicare
).
Per
Diem
The hospital is paid for all services delivered to a patient during
1
day (private insurance, PPOs/HMOs
).
Fee-For-
Service
The physician or hospital is paid a fee for each service
(for example,
medication, IV fluids,
ECG
, surgical procedure) provided (uninsured, some private insurance
).
Capitation
One payment is made for each patient’s treatment during a month or year
(has now virtually disappeared; previously,
largely
HMOs).Slide19
New Methods: ACOs
Accountable Care Organizations (ACOs
)
Realign value with payment incentives (“
pay for performance
”
)
F
inancial
incentives to improve the coordination and quality of care
In 2010, a portion of the ACA authorized CMS to create an ACO program to service CMS users (Medicare and Medicaid
)
Shared
savings/risk
approach that sets aside a financial reward to groups of providers or large
health care
organizations that attain a yearly
“benchmark” spending goal and meet predefined quality standardsSlide20
New Methods: Pay for Performance
A
pay-for-performance
(P4P)
model provides a financial incentive to providers who meet defined performance goals
Often used as a first step in transitioning toward more value-based care; easily combines with current fee-for-service methodology
Traditionally has been implemented as an “upside only” (bonus) approach to promote increased quality; more recently, the developing trend is to add a downside (penalty) component for poor performance on defined measures
Slide21
New Methods: Pay for PerformanceLiterature reflects potential ethical “pitfalls” and unintended consequences of this approach. For
example, this model:
Creates a potential incentive to deselect patients who are difficult to treat and would make meeting the performance goals more
difficult
Creates a potential incentive to provide unnecessary
care—care
unnecessary for appropriate patient
care
but helpful to meet the performance
goalSlide22
Example of Pay for PerformanceIn 2008, Medicare reduced payments to hospitals for hospital-acquired infections
In the short term, there were hospital-level decreases in numbers of hospital-acquired infections, but these were difficult to sustain
In 2012, there was no measurable effect on rates of central line–associated infections or catheter-associated urinary tract infections nationallySlide23
New Methods: Bundled Payment
Bundled payment
is a single payment to
a provider for
all
services associated with a treatment or condition (for example, knee replacement or all outpatient services for a patient with type 2 diabetes for
1
year)
Provider assumes risk; can profit if cost of care is below bundled payment or lose money if above bundled payment
Important for provider to ensure bundle is appropriately priced (that is, adequately risk adjusted)
Often linked to meeting certain quality
measures to
ensure
delivery of high-quality care is maintainedSlide24
Example of a Bundled Payment
Mr. Jones has a heart attack for which he
i
s evaluated in the office, sent to the emergency department, and admitted to the hospital. He undergoes cardiac catheterization and stent placement.
A bundled or global payment means that all of those settings and providers of care will be given a lump sum payment for the episode of care, and the payment will need to be divided up
This incentivizes all the providers to work more efficiently to integrate and coordinate careSlide25
Future Methods: MACRA LegislationM
edicare
A
ccess and
C
HIP
R
eauthorization
A
ct of 2015 (
MACRA
)
Applies to Medicare Part B—physician billing reimbursement ONLY
Replaced the sustainable growth rate (SGR) physician payment patchSlide26
Future Methods: MACRA (Continued)
Goals:
I
mprove the quality of care for Medicare patients and transition clinicians from volume-based to value-based payments by 2019
Many of the specific rules are still being worked out; 2017 data most likely will count for 2019 payments, so
START NOW
!
Very well aligned with the provision of high
v
alue
c
are and the patient-centered
m
edical home/neighborhood model
To learn more about how to participate as
a
subspecialist,
go to
https://www.acponline.org/running_practice/delivery_and_payment_models/pcmh/understanding/specialty_physicians.htmSlide27
Case #38
Go to
http
://costofcancercare.uchicago.edu
/
, and in a small group, review the online survey about financial toxicity for cancer patients
Answer the following questions:
Should we screen our patients for financial harm from medical bills?
If so, how?
Which questions might be helpful for patients in your specialty? Slide28
Steps Toward High Value,
Cost
-Conscious
Care
9
Step
1:
Understand the benefits, harms, and relative costs of the interventions that you are considering
Step
2:
Decrease or eliminate the use of interventions that provide no benefits and/or may be
harmful
Step
3:
Choose interventions and care settings that maximize benefits, minimize harms, and reduce costs (using
comparative effectiveness
and cost-effectiveness data
)
Step
4:
Customize a care plan with the patient that incorporates his or her values and addresses his or her
concerns Step 5: Identify system-level opportunities to improve outcomes, minimize harms, and reduce
health care wasteSlide29
SummaryInsurance status and type of coverage
affects
adherence to recommended treatment
plans
Given large differences in coverage/affordability, we must all seek to individualize patient care to improve quality and safety and decrease
waste
There are new models of clinician reimbursement that reward the practice of high value care/patient-centered medical home and neighborhood modelsSlide30
Commitment in Your Practice
Can you think of a time when your patient didn’t comply with
your recommendations
because of cost?
How could you have tailored your treatment plan to improve outcomes
?
Write
down at least one thing to
start
doing and one thing to
stop doing.
START
:
STOP
:Slide31
References
Vignette courtesy of Costs of Care. High costs of important
p
rocedures. Costs
of
Care Web site.
http://
www.costsofcare.org/high-costs-of-important-procedures/
. Accessed March 17, 2016.
Calculator courtesy of Dartmouth-Hitchcock Medical Center. Out-of-pocket
e
stimator. Dartmouth-Hitchcock Web site.
http
://
www.dartmouth-hitchcock.org/billing-charges/out_of_pocket_estimator.html
. Accessed March 17, 2016.
The
Henry J Kaiser Family Foundation. Health
insurance
coverage of the total
population. The Henry J Kaiser Family Foundation Web site. http://kff.org/other/state-indicator/total-population/
. Accessed March 17, 2016.Centers for Medicare and Medicaid Services. Medicare Web site. www.medicare.gov
. Accessed March 17, 2016.Centers for Medicare and Medicaid Services.
Medicaid Web site.
www.medicaid.gov
. Accessed March 17, 2016.
The
Henry
J
Kaiser Family
Foundation. Key
f
acts
about
the uninsured
p
opulation.
The Henry
J
Kaiser Family Foundation Web site.
http://kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population
/
.
Published
October 15,
2015. Accessed
March 17, 2016.
McWilliams
JM. Health consequences of
uninsurance
among adults in the
United States
: recent evidence and implications. Milbank Q. 2009 Jun;87(2):443-94.
[PMID
:
19523125]
Financial toxicity survey courtesy of The University of Chicago. Cost of cancer
c
are: understand your
f
inancial
t
oxicity. The University
of
Chicago Web site
.
https://
costofcancercare-sites.uchicago.edu
. Accessed March 17, 2016.
Adapted from Owens
, D,
Qaseem
A, Chou R,
Shekelle
P; Clinical Guidelines Committee of the American College of Physicians. High-value, cost-conscious health care: concepts for clinicians to evaluate the benefits, harms, and costs of medical interventions. Ann Intern Med. 2011 Feb 1;154(3):174-80. [PMID: 21282697
]