The Emerging Challenge of Chronic Care

1
The Emerging Challenge of Chronic Care

• Robert A. Berenson, M.D.
• Senior Fellow, The Urban Institute
• 27 September, 2007

2
Chronic Condition

• An illness, functional limitation or cognitive
  impairment that lasts (or is expected to last) at
  least one year
• Limits what a person can do
• Requires ongoing care

Source National Academy of Social Insurance,
Medicare in the 21st Century Building a Better
Chronic Care System, January 2003.
3
Projected Total Number of People With Chronic
Conditions
(in millions)
Sources Partnership for Solutions. Multiple
Chronic Conditions Complications in Care and
Treatment RAND Corporation, 2000.
4
Chronic Conditions by Age Group
Source Partnership for Solutions. Disease
Management and Multiple Chronic Conditions
Agency for Healthcare Research and Quality, MEPS,
1998.
5
Chronic Condition Prevalence By Race (Total
Population)
Source Hwang, W., et al., Out-of-Pocket
Medical Spending for Care of Chronic Conditions,
Health Affairs, December 2001.
6
Proportion of Adults 50 with Chronic Conditions,
by Race
Source Cultural Competence in Health Care,
Center on an Aging Society, Georgetown
University. No. 5, February 2004. K. Collins,
et al., Diverse Communities, Common Concerns
Assessing Health Care Quality for Minority
Americans, New York The Commonwealth Fund,
2002.
7
Chronic Conditions for Children
Source G. Anderson, Hospitals and Chronic
Care, PowerPoint Presentation to the American
Hospital Association. Partnership for Solutions.
16 June 2004.
8
Chronic Conditions for Adults
Source G. Anderson, Hospitals and Chronic
Care, PowerPoint Presentation to the American
Hospital Association. Partnership for Solutions.
16 June 2004.
9
Chronic Conditions in Seniors
Source G. Anderson, Hospitals and Chronic
Care, PowerPoint Presentation to the American
Hospital Association. Partnership for Solutions.
16 June 2004.
10
Multiple Chronic Conditions and Medical Service
Usage
Source G. Anderson, Hospitals and Chronic
Care, PowerPoint Presentation to the American
Hospital Association. Partnership for Solutions.
16 June 2004. MEPS 2000.
11
Hospitalizations by Number of Chronic Conditions
Source G. Anderson, Hospitals and Chronic
Care, PowerPoint Presentation to the American
Hospital Association. Partnership for Solutions.
16 June 2004. MEPS 2000.
12
Hospitalizations for Ambulatory Care Sensitive
Conditions
Sources Partnership for Solutions. Multiple
Chronic Conditions Complications in Care and
Treatment, May 2002 Medicare Standard Analytic
File, 1999.
13
Activity Limitations by Number of Chronic
Conditions
Source G. Anderson, Hospitals and Chronic
Care, PowerPoint Presentation to the American
Hospital Association. Partnership for Solutions.
16 June 2004.
14
Annual Prescriptions by Number of Chronic
Conditions
49.2
33.3
24.1
17.9
10.4
3.7
Includes Refills Sources Partnership for
Solutions, Multiple Chronic Conditions
Complications in Care and Treatment, May 2002
MEPS, 1996.
15
Utilization of Physician Services by Number of
Chronic Conditions
Sources R. Berenson and J. Horvath, The
Clinical Characteristics of Medicare
Beneficiaries and Implications for Medicare
Reform, prepared for the Partnership for
Solutions, March, 2002 Medicare SAF 1999.
16
Breakdown of Total Health Care Spending
78 Health Care Spending
for People with Chronic Conditions
22 Health
Care Spending for People without Chronic
Conditions
Sources Partnership For Solutions, Chronic
Conditions Making the Case for Ongoing Care,
December 2002 MEPS, 1998.
17
Health Care Spending by Number of Chronic
Conditions
Sources Partnership For Solutions. Disease
Management and Multiple Chronic Conditions
Agency for Healthcare Research and Quality, MEPS
1998.
18
Medicare Spending Related to Chronic Conditions
Source Partnership for Solutions, Medicare
Cost and Prevalence of Chronic Conditions, July
2002 Medicare Standard Analytic File, 1999.
19
Medicare Spending on Beneficiaries with Chronic
Conditions
Source G. Anderson, Hospitals and Chronic
Care, PowerPoint Presentation to the American
Hospital Association. Partnership for Solutions.
16 June 2004.
20
Growth of Medicaid Spending
Sources J. Crowley and R. Elias. Medicaids
Role for People with Disabilities, The Kaiser
Commission on Medicaid and the Uninsured, August
2003 Urban Institute estimated based on
HCFA-2082 and HCFA-64 Reports.
21
Projected Total Medicaid Spending Per Enrollee
Note Includes federal and state spending on
benefits. Sources J. Crowley and R. Elias.
Medicaids Role for People with Disabilities,
The Kaiser Commission on Medicaid and the
Uninsured, August 2003 KCMU analysis based on
CBO baseline for Jan. 02.
22
Private Health Insurance Spending on Individuals
with Chronic Conditions
Source G. Anderson, Hospitals and Chronic
Care, PowerPoint Presentation to the American
Hospital Association. Partnership for Solutions.
16 June 2004. MEPS 2000.
23
Incidents in the Past 12 Months
Among persons with serious chronic conditions,
how often has the following happened in the past
12 months?

• Been told about a possibly harmful drug
  interaction
• Sent for duplicate tests or procedures
• Received different diagnoses from different
  clinicians
• Received contradictory medical information

• Sometimes or often
• 54
• 54
• 52
• 45

24

• Barriers to Improvement

25
Barriers to Implementing Change in Most of
Medicare

• The nature of medical education and the resultant
  professional culture and orientation of clinical
  practices
• Traditional Medicare is based in traditional
  indemnity insurance
• Major benefit limitations and restrictions in the
  Medicare statute

26
Professional Issues

• Hard to influence by public policy
• Based on an orientation to identifying and caring
  for acute illnesses and injuries, not chronic
  conditions
• find it and fix it
• solve, rather than manage problems
• the tyranny of the urgent
• Failure to find the unusual and the
  life-threatening is worse than overlooking the
  common and considering quality of life

27
Professional Issues (cont.)

• Oriented to those who present for care, rather
  than to populations who inhabit their chronic
  conditions
• Little division of labor M.D. as captain of the
  ship
• Underuse of information management and decision
  support tools
• Resistance to change, even in the face of
  demonstrable failures

28
Specific Structural and Organizational
Deficiencies

• Residency training takes place in hospitals
• Shortage of geriatricians
• Guidelines (even when followed) usually ignore
  co-morbidities may conflict or produce
  overwhelming compliance burden
• Disease management and primary/principal care are
  not well coordinated
• Lack of integrated care orientation (also
  fostered by siloed payment systems)

29
Medicare Statute Based on Indemnity Insurance of
the 60s

• Kenneth Arrow in 1963 for people with chronic
  illness, insurance in the strict sense is
  probably pointless.
• Why? Moral hazard
• Yet, 80 of beneficiaries have one or more
  chronic condition and 20 have 5 or more and
  account for two-thirds of program spending

30
Example of the Problem Should Medicare Pay for
E-mails?

• Why not phone calls, while youre asking?
• In a fee-for-service payment system, there are a
  number of concerns
• Relatively high transaction costs relative to the
  value of the underlying service
• Substantial program integrity concerns
• Nuclear force moral hazard

31
Problems in How Traditional Medicare Pays for MD
Services

• Many Medicare payment systems have evolved from
  FFS to prepayment for episodes of care
  physician payments is the main exception
• Physician payment is for discrete, narrowly
  defined services or transactions
• Partly fails to account for complexity
• Pays based on resources expended, whether serve a
  useful purpose or not
• And doesnt pay differently for quality

32
Medicare Benefits Need to Be Improved and Upgraded

• Now, reasonable coverage for prescription drugs
  (although still 4 million not in)
• Sensory loss support devices not covered
  (eyeglasses, hearing aids)
• DME and home health limitations, e.g., the
  homebound definition
• Program interpretation that rehabilitation
  services require prognosis of improvement, and
  not maintenance or slowed deterioration

33
Various Models of Enhanced Chronic Care Management
34
Disease Management

• I use the term to refer to third parties attempt
  to influence patients directly, bypassing
  physicians
• Relies on predictive modeling, decision-support
  software, and remote monitoring devises to
  complement core nurse-patient communication,
  which focuses on patient self-management
  (diabetes) and early detection of clinical
  deterioration (CHF)

35
Case Management

• Targeted to a subset of patients who are
  typically the most complex with a combination
  of health, functional, and social problems
• Approach is more customized to needs of
  particular patients
• Relies mostly on telephonic interventions

36
The Wagner Chronic Care Model

• Pioneered by Wagner and associates at Group
  Health Cooperative of Puget Sound and The MacColl
  Institute
• Offers a multidimensional approach to a complex
  problem
• Identifies 6 essential elements community
  resources, health care organization,
  self-management support, delivery system
  redesign, decision support, clinical information
  systems

37
Delivery System Redesign

• Specialized assessment tools to identify patients
  at risk
• Multi-professional team responsibility and
  delineation of roles
• Active promotion of patient self-management
• Proactive follow-up/communication, outside of the
  anachronistic office visit

38
Chronic Care Strategies That Bypass Physicians
Make No Sense

• From 30 years of Medicare demos -- approaches
  that are supplemental to the patient/physician
  relationship have had little impact the MMA
  disease management demo seems to be failing in
  commercial and Medicaid settings D.M. may have
  some, but limited, usefulness.
• In contrast, CMS just announced modest positive
  results from the Medicare physician group
  practice demo, which incentivizes, rather than
  bypasses, practices mostly, but not only, large
  groups

39
Challenging the Status Quo in Chronic Disease
Care Seven Case Studies

• Robert A. Berenson, M.D.
• September, 2006
• Available on California Health Care Foundation
  website

40
Seven Case Studies

• Sutter Health Sacramento Sierra Region
• Park Nicollet Health Services
• Integrated Resources for Middlesex Area (Ct.)
• Billings Clinic
• Care Level Management
• Washington Hospital Center Medical House Call
• MDxL

41
Case Study Finding 1

• Physicians and hospitals can do much more to
  manage patients with chronic conditions
• Physicians and hospitals do not think third-party
  disease and case management has worked because of
  the absence of physician engagement

42
Finding 2

• Viable models of chronic care management fall
  between the Chronic Care Model and third-party
  approaches
• Case study sites do not attempt to redesign
  traditional practice of frontline primary care
  physicians

43
Finding 3

• Although third-part D.M. remains the dominant
  framework for chonic care improvement, some
  health plans also support innovative approaches
  that more closely relate to patients regular
  sources of care

44
Finding 4

• Provider-based programs carefully distinguish
  among patients based on their specific clinical
  conditions and other assessments
• Differentiators include whether patient
  home-bound, have limitations in activities of
  daily living, and specific conditions, e.g. CHF
  vs. diabetes vs others

45
Finding 5

• Approaches to case management for medically
  complex patients vary more than do disease
  management programs for patients with one or more
  specific chronic conditions
• For the former, programs rely more on point of
  care decision-making by clinicians

46
Finding 6

• Capitation is more compatible with chronic care
  programs and their populations than
  fee-for-service reimbursement
• Capitation provides greater flexibility and
  organizations can benefit from reduced
  expenditures
• The Medicare shared savings approach used in
  the PGP demo also may be a practical approach

47
Finding 7

• Current Medicare payment rules greatly influence
  the configuration of chronic care programs, e.g.,
  how to get reimbursed for diabetes education or
  the incident to rules.

48
Finding 8

• The negative business case for hospitals to
  support chronic care management does limit the
  robustness of programs
• However, in some circumstances, there are offsets
  to the negative ROI

49
Finding 9

• Communications, monitoring, and data-sharing
  technologies enhance chronic care programs but,
  state-of-the-art, high tech technologies are
  not essentail.
• EMRs, disease registries, PDAs, yes
• Sophisticated telemonitoring devices, not really

50
Some Final Thoughts on Physician Payments to
Support All of This
51
We Should Not Expect Pay-for-Performance to Solve
the Problem

• It focuses on marginal dollars and ignores the
  incentives in the basic payment system -- which
  drive behavior
• A lot of what we want physicians to do is not
  easily measurable. Are we looking under the light
  for the keys lost in the bushes?
• P4P cant easily address overuse and misuse
  quality dimensions, much less cost.
• We are still learning about P4P. Dont overload
  it.

52
The Bottom Line

• A one-size fits all, RBRVS fee schedule no longer
  makes sense as physicians increasingly do very
  different things
• Perhaps, PCPs need mixed FFS and prospective
  monthly payments (with a dash of P4P)
• Surgeons could be paid for episodes (but
  addressing the bias to inappropriate surgical
  episodes)
• Other specialists who perform one-time,
  discrete services might still be paid FFS for
  their services
• The payment system should promote integrated
  care, including multi-specialty groups, but not
  single specialty consolidation

53
Continuum of Approaches for Paying for Medical
Home Services

• Aggressive, politically difficult RBRVS/fee
  schedule revaluations
• New CPT codes for targeted medical home
  activities
• A new payment, i.e. pmpm or pppm, for chronic
  care management activities to the practice on top
  of FFS payments
• Bundled payment for medical services and medical
  home activities either a more improved pmpm or
  a hybrid FFS/bundled payment approach

54
FFS Revaluations

• Hope that better payment for EM services
  cross-subsidizes medical home activities (as some
  are already included in pre and post service
  work, according to the RBRVS methodology
• Avoid difficult design issues of a formal medical
  home --
• Who qualifies for payment, e.g. primary care or
  principal care?
• The physician or the practice?
• Is there a formal patient lock-in hard or soft?
• No obligation to hold any one accountable and all
  that that entails

55
FFS Revaluations -- Cons

• No obligation to hold any one accountable and all
  that that entails in a FFS system, it might be
  putting good money after bad
• Politically difficult to redistribute within a
  fee schedule context
• A CPT code based payment system that pays for
  specific services cannot really accommodate the
  set of soft activities we want to promote

56
New CPT Codes for Particular Medical Home
Activities

• Or particular services in the Chronic Care Model
• As examples, palliative care family conferences,
  email consultations, geriatric health
  assessment
• These should be included in CPT and paid for,
  but cant really include most medical home or
  care coordination activities on a FFS payment
  basis, as discussed before
• Even here, face political obstacles to adoption
  from vested interests who are involved in CPT

57
PPPM Payment for Medical Home and/or Chronic Care
Management

• Assumes there is a definable and designated
  subpopulation that qualifies for additional
  activities supported with additional payment
• Would small practices reengineer their processes
  for a small subset of patients which may make up
  a highly disproportionate share of health
  spending but not a relatively small share of
  their time and attention?
• Compounded if not an all-payer approach

58
An Add-on PPPM Payment (cont.)

• Which raises the fundamental question, do all
  patients benefit from a medical home or should
  the approach be targeted to only some, for
  efficiency?
• How would eligible patients be selected
  physician referral (then self-referral issues),
  history of high costs, data mining re conditions
  and co-morbidities the issues that are relevant
  to eligibility for case management?

59
Bundled (Capitated) Payments for All Services
and All Patients or a FFS Hybrid

• The advantage is that all patients are included,
  so no practice dissonance for different patients
  and risk adjustment handles the fact that
  different patients have different needs for
  chronic care management
• But should medical home services be provided to
  everyone? Do they all want a home? Is this
  efficient? (But some of us think FFS sends wrong
  signals for all patients)
• Can we correct the execution errors of 1990s
  capitation approaches related to insurance risk,
  absence of risk adjustment, mechanical actuarial
  conversion of pmpms under FFS to a situation when
  more is expected of the practice?

60
A FFS/Bundled Payment Hybrid

• Some very smart people, e.g., Joe Newhouse, have
  recommended a mixed approach to soften the
  effects of capitation and FFS payment incentives
• Some European primary care payment models, e.g.
  Denmark, is a hybrid
• But surely more complex operationally for the
  payer and maybe the practice and may negate some
  of the appeal of bundled/capitated payments