Former CMS Chief Mark McClellan on EM’s Role in the Medical Home

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altEPM’s Ricardo Martinez sits down with healthcare economist Dr. Mark McClellan to discuss the future of medical homes and the evolving role of emergency medicine.

EPM’s Ricardo Martinez sits down with healthcare economist Dr. Mark McClellan to discuss the future of medical homes and the evolving role of emergency medicine.


RICARDO MARTINEZ: Mark, I consider you a dangerous guy, someone who more of us physicians need to listen to. Not only are you a physician, but you’re an economist. And not only you’re an economist, but you’re an economist who held government positions. With that in mind, we want to get your take on the state of emergency medicine, where we may have opportunity and challenges.

A lot of people are saying that as healthcare reform comes into the marketplace it’s going to be just like Massachusetts. And you know, there’s part of me that agrees, because some of the dynamics are the same. But the other side of the coin, the capitalist landscape has a tendency to change, to find advantage and shift. So we’ve seen a big growth in retail clinics and urgent care centers. You’re seeing consolidation in the marketplace. What do you see happening to the volume in the emergency departments, and how do you see the role of the emergency departments changing over the next five years or so?

MARK McCLELLAN: Well it goes beyond effects of the Affordable Care Act. There are lots of efforts underway to try to get the right patients to the emergency department. In fact one way of viewing a lot of the changes that are happening in our healthcare system is the effort to provide better and less costly alternatives to emergency department care. One of the results of this approach is that it will be the more difficult and complex cases that make it to the emergency department in the future. And this is happening at a time when payments for emergency services, like other payments in healthcare, are under a lot of financial pressure. So it’s really an important time for emergency physicians to be able to move forward on ways of helping to make care more effective. They need to be sources of good ideas for helping to coordinate care better, for reducing the costs of treating complications of illnesses that often are associated with emergency department care.


MARTINEZ: So it’s a big paradox. We’re seeing that the patients coming into the emergency department are sicker than ever. There is a small amount that you can siphon off to the urgent care and retail clinics. But for the most part, we have more patients with chronic conditions, co-morbidities, and they’re getting older. And that is just a lot of intensive work. So it’s not clear how we’re going to get paid for that.

McCLELLAN: Something’s got to give. My experience is that it’s really hard for clinicians to both deal with the problems and pressures of their day-to-day work and also step back and ask how they can drive the healthcare system in a better direction. But if they don’t, it’s just going to be more of the same.

MARTINEZ: One of the things we say in emergency medicine is that we’re homeless in the medical home. We tried several years ago to build these relationships with a group that was putting together medical homes. And they really didn’t see the value. But I will tell you, as an emergency physician, at five or six o’clock I suddenly become the smartest guy in the city. Everybody heads to the ER. So it seems to me the natural place for a financial relationship would be providing after-hours services or continual care or longitudinal care for the patients that will continually aggregate in these primary care medical centered homes. Do you see any evidence of that? Or is that something that needs to be pursued?

McCLELLAN: Some of the most promising approaches I’ve seen for dealing with the after-hours problems has been to provide better ways to coordinate care with emergency physicians and alternative support services. I’m sure some readers are familiar with some of the “hot-spotting”. This involves putting some resources into identifying the patients who are at high risk for repeat emergency room use because of some combination of behavioral problems, lack of stable medical support and serious physical ailments and finding ways to work together to get a support system in place. Interestingly, some of the most successful scenarios rely on things like social workers and behavioral health interventions outside of a traditional physician’s office. What makes those programs work is a different financing model than that of a traditional primary care medical home. Instead of just getting paid for visits, they get paid a case management fee. In return for that, they’re expected to show some impact on things like use of effective medications and management of chronic diseases. Similarly, what a lot of these hot-spotting programs are doing is setting up some new financing mechanisms for the emergency physicians developing more of a case-based approach, linking in more funds from social work and behavioral health programs.


MARTINEZ: I see patients in a fairly large urban hospital and we have psych social workers. And if anybody took our psych social workers from us, we would come to a grinding halt. Because they really are necessary to not only move the patients out of the emergency department and into the right services but also to keep the patients from coming back in. But the hospital has to help, and right now, hospitals are having to cut staff because of declining reimbursements. So I think these models can work, but right now, it’s a real challenge.

McCLELLAN: I think this is probably the biggest – or one of the biggest – challenges in healthcare reform: how to get a better alignment. Similarly, one of the problems with traditional medical homes has been that there isn’t a financing mechanism to take that case-based person-centered approach beyond the primary care physician in cases where it really needs to include people like emergency physicians and other specialists. The same thing is true for most traditional hospital reimbursement, which is fee-for-service. The hospital gets revenue when people show up at the emergency room and are admitted. They don’t get paid so much when they prevent costly services. Now there have been some limited steps to change that through things like the readmission penalty. But the approaches that I think are much more promising are ones that take a lot of the funds that would have been going for fee-for-service payments and instead redirect them to payments that are more tied to the person and what they need. This includes steps towards accountable care organizations, bundled payments and some pilot programs that we’re exploring, hopefully including emergency department payment. For some of these higher risk patients who are often accounting for a lot of the emergency room costs and a lot of the hospital costs, those dollars can be redirected to things like expanding social work access and expanding access to behavioral health and mental health services in a way that reduces costs overall and improves the outcomes for the patients.

MARTINEZ: My colleagues and I developed a roadmap that transitions from volume-based to value-based care over a several year period. But as you go through different reimbursement schemes over time the skills required actually change. If you transition too fast, you actually lose a lot of revenue coming in. If you get there too slow, you lose a lot of patients. And so as you move towards your model of making the money based on the patient, you lose market share if you don’t develop population-based skills and value-based skills. But if you go too fast, you can leave a lot of money on the table and not have that money to finance the next step.

McCLELLAN: It’s an issue of alignment. Payments are always aligned, they’re just not always aligned with what you want. Right now our payments are still largely aligned with volume and intensity, not necessarily better care. Think about medical data and medical billing – it’s complicated. We spent an awful lot of time building up the ability to do volume and intensity-based payment. Now we’re in an early stage of developing the ability to do payments that are more tied to the person and to better results.

MARTINEZ: The Rand Report that just came out really showed that the ER plays an increasing role in admissions for the hospital with the family medicine and the primary care medical centered homes really not admitting as much. They’re referring complex patients to the hospital because that’s where all the technology is, as well as the expertise of the emergency physicians. With that in mind, you would think that the emergency department would be viewed positively. But payers, hospitals and other physicians all see the emergency department differently. What is your view of how payers see the emergency department versus how hospitals may?

McCLELLAN: Payers are increasingly viewing emergency departments as cost centers, as places that need better ways to treat patients, especially complex patients and those who could be treated in an acute care clinic. They’re looking for ways to get costs down. While medical homes provide some good financial support for primary care physicians to try to coordinate care and improve treatment of chronic diseases, they don’t address the fact that many patients require more advanced specialist services or the expertise of an emergency physician. So just doing a medical home payment change alone isn’t enough. We’re also working on some new ideas for Medicare physician payment. I have to say we’re further along in other specialties than we are in emergency medicine. But it’s the same ideas that we’ve just been talking about. One example of this is for patients with chest pain or back pain. The idea is to take some of the fee-for-service payments and convert them to a case-basis payment that these providers can share and can use in the way they think is best. But the challenge is to figure out what protocols they’re going to use together to decide which patients really are low risk with chest pain and don’t need a further cardiology workout. Or how is it possible for the cardiologist to consult more easily without actually having to see them. I’m hoping that these same kinds of ideas can be applied to emergency medicine

MARTINEZ: There seem to be new types of workers in the healthcare landscape that we need to be aware of. For example, community health workers and something called a community paramedic. Do you have any good models out there of groups working in the community?

McCLELLAN: One example in New Jersey is Jeff Brenner and his group who have focused on hot-spotting. They’re dealing with some very vulnerable and difficult patient populations, patients that typically don’t have insurance at all, who have an overlay of behavioral, substance abuse problems and mental health issues on top of a number of chronic medical conditions. As it turned out, what these patients really needed was not more time with physicians. They most needed social workers to help connect them to services like homeless shelters or housing and food support. They found they needed behavioral health workers to help them adhere to medications for their mental conditions and in some cases get better support for treatment for substance abuse. And in some instances, they needed nurses who could help them with day-to-day adherence to medications in order to head off some of the worse complications they were experiencing. So it really became a team approach to care for these high risk patients.

Now under the kind of traditional financing approaches, there was no way to support that. The hospitals had to provide the emergency services these patients needed under EMTALA, and they didn’t get reimbursed. There is only limited funding for things like social work and behavioral support. So I think the big innovation that Brenner made was recognizing that you can’t easily change the clinical care model without matching up some financing with it. In this case he was able to get some support initially from the hospitals– who were frankly willing to pay to help avoid some of the losses they were facing on these patients. Now payment changes in Medicaid may be adding to this through a Medicaid Accountable Care Organization reform. These changes allow providers to put together the previously silo’d payments for behavioral health and substance abuse services into an overall package of care for these patients.

Again, it’s not primarily done by physicians. The physicians have critical input. They’re the ones, including the EPs, who got the data on who these highest risk patients were and who helped come up with the plan for what best to do for them. But the actual day-to-day care depends on an appropriate team for the patient’s needs.

And this will only become more important as we see increasing pressure in the ED, and an increasing need to find innovative, more efficient ways to use physicians. If there are things today that physicians are doing that could potentially be done by a nurse practitioner or a pharmacist or a home health worker or a social worker, you’re going to see more and more examples of that happening, simply because the physician supply is so constrained relative to what the demands of the population are and will be in the future.

MARTINEZ: One of the other areas where I don’t see anybody looking is the interface between emergency departments and nursing homes. It’s amazing that nursing home patients show up unannounced all the time with no information whatsoever. And the care is disorganized. It’s unsafe in the fact that we don’t know what the issues are. That looks like one issue that really impacts both the frail and elderly but also the whole flow in the healthcare system in terms of caring for those patients in a better way.

McCLELLAN: That’s one of the strongest examples of this problem of the way that we’re paying. The way that payments are set up for dually eligible Medicare beneficiaries, not only is it fee-for-service but it’s split between the federal government and the state. So not surprisingly, there’s very little support for care coordination.

A nursing home gets paid on a per diem basis typically; so if something goes wrong they don’t have any financial support for dealing with that. They just get their per diem. So the patients tend to get turfed to the emergency room. And the hospital gets paid on a fee-for-service basis or a DRG basis. So they don’t want the patients in for that long either. And it just doesn’t create the right kind of environment for people sitting down together and working out better ways to coordinate care. The Center For Medicare And Medicaid has started a special program set up to deal with dually eligible beneficiaries. The basic idea is you put together the federal funds and the state funds into one coordinated package. And instead of paying more when there are more of these bounce backs as traditional Medicaid does, you get paid more when the patient has better coordinated care.

Some of the measures that are being used as a basis for a payment are quite new; rather than relying on hospital admissions, patients are being asked if they believe there was a good plan of care in place. Did the patient avoid preventable complications like weight loss or nutritional problems or dehydration or infections? And the result is that the providers can potentially have a lot more financial support for doing things like putting care coordination systems in place or having clinicians round on patients. Then when something does go wrong, there’s an early intervention to head it off, not an early knee-jerk transfer to the emergency department.

MARTINEZ: Last question: what emerging technologies do you think emergency medicine should begin to embrace right now?     

McCLELLAN: I think there’s tremendous potential for telemedicine and for better remote monitoring systems generally, using wireless technologies and other forms of IT. We’re spending time here in Washington trying to identify legal or regulatory barriers to some of these technologies. For example, some telemedicine programs that rely on remote access to expert specialized physicians can run afoul of state licensing laws if if the patient getting care is in a different state from the expert. I think we’re not that far from a day when patients, particularly those with very serious diseases who are able to engage more in their care, are going to have better tools that they can use from their smart phone. They’ll more efficiently get in touch with their doctor or other members of their care team. So there will be other steps possible for them to take besides just showing up at the emergency room.

But again, we’re not going to get to this place of using all new technologies effectively by simply putting more and more pressure on emergency physicians to do more with less. Now is the time for some real leadership from physicians to help guide better ways of using these technologies and better ways of delivering care. I know it’s very hard to do on top of your day job. But the most successful reform efforts I’ve seen around the country are all ones that have been led by physicians who know the best opportunities to improve care and have their hearts behind it. The system can change. We can redesign financing. We can implement programs to support these efforts. And I hope we get a chance to continue to work together on these issues.

A medical doctor and economist, Mark McClellan served as commissioner of the Food and Drug Administration and administrator of the Centers for Medicare & Medicaid Services. He now directs the Engelberg Center for Health Care Reform.

Interview by Dr. Ricardo Martinez, Chief Medical Officer for North Highland and assistant professor of emergency medicine at Emory University School of Medicine.


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