How emergency medicine will change when incentives are turned upside down
How emergency medicine will change when incentives are turned upside down
This is an amazing time to be a physician. I have been in practice for over 30 years and never before have I seen such change, both actual and potential, which could fundamentally alter the way we do our job. The most important vector among all these changes, of course, is health care reform.
The Affordable Care Act, for better or worse, has already worked its way into so many corners of the health care system that serious change has already occurred, and more is un-avoidable. Obamacare is stumbling a bit, but even if it falters, CMS stands ready to take up the charge.
CMS (Medicare and Medicaid) provides coverage for a very large percentage of our patients and it has strong ideas about where health care needs to go. Their vision for the future is no secret— references occur again and again in policy, practice, and publications.
Here are some of the most important CMS themes, extracted from a recent announcement introducing their new “data czar”:
- “Shifting the focus from volume to better health outcomes”. Translated, this really means, “Eliminate Fee-for-Service medicine, and pay people for how well the patients are cared for”. Many health policy thinkers would agree. What happens if FFS disappears? What does the world look like if our income varies most not by how many patients we see, but instead by how well they do? This changes the locus of control, and makes us co-participants in our patients’ lives.
- “Coordinating Care” means working with other types of health care personnel, not just community primary care but also care managers, health coaches and social workers. This demands a skill set which some, perhaps many of us, may not have.
- “Spending dollars more wisely” brings to mind a whole host of topics, from “Choosing Wisely” guidelines, to CMS quality metrics, to the many efforts to deliver care “in the most appropriate setting” (read: not the ED!).
To better understand how these themes will change ED practice, let’s pretend for a moment that we are five years in the future. Those who live and work in a typical state have health insurance through “StateCare”, which is funded by contributions from federal and state monies, employers and private individuals above a certain income limit. StateCare negotiates each year with a number of health care provider organizations to provide medical care for its people, and gives each provider group a lump sum for a given number of covered lives. While it’s recognized that costs could vary by some controlled amount, basically the money from StateCare is the only money available to care for the people this year.
These provider organizations are Fully At Risk; they are betting that they can meet the strict quality/outcome requirements of StateCare, while staying within budget. If they go over budget, there is no more money; the difference must come from their own pockets, or their patients will suffer. If this happens or they don’t meet the quality metrics, some or all of the “lives” could go to another group next year.
The meaning of “private practice” becomes a little blurry in this brave new world. But suffice it say that small groups cannot manage on their own, as they once did, since the money is now going to much larger systems. Your group is part of a large system, so your group’s income, and your personal income, depends on how well the system meets these goals!
This does some interesting things to our day-to-day practice assumptions. Once again, how we are paid has less to do with volume, and much more to do with quality. Less is actually more, but outcomes are king. And our episodic view of patient encounters broadens considerably. In emergency medicine this can get confusing rather fast.
The first concept we need to get straight is what is meant by cost. In the old world “health care costs” are really charges, or what the people paying the bills are expected to pay, per service. In the Fully Risk world, however, what matters is the true cost, the “business” cost.
So how much does it really cost for health care providers to deliver a given service? Normally the “official charge” for a given test is far greater than the actual cost of creating the service. CT scans are a great example — normal charges often exceed $1000 (even before professional fees). But if you break it down into the actual cost components — time of the tech to do the study, amortized cost of the machine per study, some share of physical space, utilities etc — the ACTUAL cost is about $50-100 per test. The same ratios apply for CBCs, EKGs, you name it. Revenues from these inflated charges are used to indirectly support other costs, but there’s no real barrier to test overutilization – only incentives.
In the new world, the health care system will no longer derive more revenue from over-testing, because it cannot charge whatever it wants. The system is given a fixed amount of money to care for all its patients each year… so it will concentrate on providing services that provide the most value for the least cost.
The “true” or actual business cost is what will matter, because the system is the only entity bearing that risk. And the biggest costs, the most valuable and expensive part of any health care system, is people. After that, it’s the buildings, space, technology and other infrastructure. Large groups of health care providers and staff working in very large buildings are hallmarks of the old world. In the new world, anything that allows lower labor costs and less treatment spaces/physical plant will be favored.
In the old world, it was important for hospitals to have more ED patients. This led to a greater market share. More patients meant more admissions, hopefully with the right insurance. More patient encounters meant more money, the enterprise expanding, the empire built. Good for everyone!
But in the new world, less will be more. So after decades of your C-Suite asking for more growth, more patients, don’t be surprised if suddenly they ask for less. Fewer ED visits and admissions are suddenly a really good thing, financially. The old adage of “working to put ourselves out of business” suddenly has a new edge, as we see trends toward lower-cost caregivers, and movement toward decentralization of health care into the community, either physically via clinics or urgent care centers, or virtually through telehealth. These things simply cost less, mostly because they have lower overhead.
So what is our part in this new scenario? How do we show our value in a new way? How do we spend less resources but still do what’s right for our patients? Can this be done reliably, with safety and integrity, so outcomes are preserved or even improved?
We all know in our hearts that much of what we do is not based on strong evidence. Where such guidance exists, we need to use it. Guidelines, clinical decision support (let’s get it right the first time!), and yes, retrospective peer review need to be taken seriously.
How do we safely reduce admissions when our patients already “meet criteria”? Well, those are old world criteria, and we need to start thinking in a completely new way. We all have encountered borderline admissions – these represent low hanging fruit to the new system. But safely deflecting these cases requires care and extra work, and often involves a knowledge of resources and a worldview we may not have. The people who have these skills are care managers, social workers, and health coaches.
With their help, the social admission or the “holiday drop off” can sometimes be discharged to another outpatient situation where the appropriate level of help can be given. Visiting nurses and home health aides play a big part but there are often resources you didn’t even know existed. People who present with ambulatory dysfunction can be given a formal physical therapy evaluation to objectify what they can and cannot do. With a little luck, some people can even be placed into a SNF without the usual required hospital stay.
Ever admit someone with a worrisome presentation because you are afraid they won’t be able to get proper follow-up in a timely way, or be lost in the system? The odd neuro presentation, for instance, maybe it’s MS, or an atypical migraine. Could it be a TIA? The patient has few resources and no insurance. A discharge just seems too risky. Care managers can help arrange things, get them an appointment to see the neurologist in 1-2 days, maybe get the MRI done before then, even arrange transportation and call them to make sure they followed up if necessary.
Is your system using a Clinical Decision Unit well already? This is a great place to concentrate your care manager resources, stabilize borderline admissions and give them some time to reveal the best path forward. Pyelonephritis, cellulitis, and DVT are all great examples of problems that can often be managed at home after a short (8-12h) CDU stay.
Lets move a little farther outside the box. We know that being hospitalized represents a real danger for older people. Could the 72-year-old with pneumonia go home if only he had a little more help and some temporary home oxygen? How about telemedicine to make sure he stays safe? Can a visiting nurse, or even a trained tech, come twice daily and give the antibiotics by IV? Hopkins has found this approach to be safe and effective, and CMS has provided grants for others to study it, but right now nobody will pay for it. In the new world, though, your system may find this makes tons of sense.
How about frequent fliers? The most challenging of these have a devilish mix of chronic pain, substance use, psychiatric problems, and some other serious medical issue such as CKD, CHF, or COPD. Some systems have managed these unfortunate people really well with interdisciplinary teams and intensive social/care management in the outpatient arena. When the patient hits the ED, the team is paged and gets involved early. There is great evidence that this kind of intervention can safely reduce ED visits and hospitalizations for this group.
We like our specialty, in part, because it is so episodic. What you see is what you get, and the bottom line problem for that day is what we like to solve. But the new world will require a broader vision. We will need to pay more attention to what was going on before the patient came to us, and even more important, what will happen next. We need to see ourselves more as part of a system, and our plan must reflect the larger care plan and problem set of the patient as a whole. We need to think more (good grief) like a primary care provider!
Does all of this sound pretty strange, maybe even a bit frightening? The Chinese ideogram for “change” contains elements of both risk and opportunity. The danger for emergency physicians lies in a failure to adapt. Rather than being the poster child for “cost containment” and inappropriate utilization, emergency medicine needs to show how we can add real value in the new healthcare paradigm. And I believe that not only can we succeed at this, but the future of our practice depends upon it.
Charles Reese, MD is the president of the ED Benchmarking Alliance
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