On average we spend $9,523 on healthcare, per person, in the U.S. This comes to about three trillion dollars each year and climbing. It has grown from seven percent of GDP in 1970 to 18 percent of GDP today. Half of this spending is publicly funded, primarily through Medicaid and Medicare. But regardless of where the funds come from, this rate of spending growth is simply not sustainable.
This explains the existence of the Innovation Center in the Center for Medicare and Medicaid Services (CMS). The goal of the Center is to support “the development and testing of innovative health care payment and service delivery models.”
One such CMS Innovation program is called the Comprehensive Primary Care Initiative. This is a four-year, multi-payer program. It is designed to incentivize practices to transform primary care. The goal is improved healthcare delivery and cost. This is achieved through two parts – a payment model and a practice redesign model.
The payment model provides a monthly maintenance fee to providers for each patient. These fees come from CMS and private insurance carriers. The medical practice is expected to use these fees to transform the primary care practice.
The practice redesign model focuses on five components:
- access and continuity,
- planned care for chronic conditions and preventive care,
- risk-stratified care management,
- patient and caregiver engagement, and
- coordination of care across the medical neighborhood.
These components are designed to improve delivery of the right kind of care at the right time, with appropriate involvement of all stakeholders – be they the physician or other medical professionals or the patient and their loved ones and caregivers.
Sounds good, right? On paper yes. In reality, not so much.
The New England Journal of Medicine just published a report on the results of the first two years of the four-year initiative. The practices involved in this initiative
“have not yet shown savings in expenditures for Medicare Parts A and B after accounting for care-management fees, nor have they shown an appreciable improvement in the quality of care or patient experience.”
How can we explain this? Is it that these initiatives offer no benefit for quality or cost of care? Possibly.
It could be that two years is not enough time to draw conclusions about such a sweeping program. We should look for the real benefits after the program has matured a little. Fortunately this is the final year of the program, so we’ll be able to see the results of years three and four soon, to determine if this is the case.
But I’m going to be a killjoy here. I don’t think we’ll see any better results after the program wraps.
First, the kinds of practices willing to sign up for this are probably already doing their best to keep costs down and quality up. They are the kind of doctors who are troubled by the numbers and want to do something about it. They simply didn’t need to change much about their model to be a part of the program, and thus any results would be negligible.
The second problem is that we live longer with more chronic disease today. The life expectancy of a 65 year old in 1960 was 14.3 years. Today a 65 year old can expect to live 19.3 years. During those five extra years they are more likely to have chronic conditions, such as diabetes, arthritis, and cancer. And they are more likely to survive conditions like heart disease that were responsible for the earlier deaths in 1960.
These conditions require expensive medical management. The additional five years of medical care are a significant addition to the cost of healthcare. But it’s political suicide for any policymaker to address this issue. Don’t look for any CMS Innovation programs to cut down healthcare expenditures during the last five years of life.
The third problem is the premise of the program. If you look at expenditures for healthcare, there is no single smoking gun to blame for the extreme rise in costs.
This program did focus on some very important points. Even so, it can’t begin to touch the overall cost of healthcare without stepping into every aspect of it. In 1960 we spent $27.2 billion on healthcare in the U.S. In 2014 we spent over three trillion. And the increase was across the board – almost every aspect of healthcare increased proportionately. We spend a bit more on home health care and nursing services and a bit less on dental care, but otherwise the percentage of healthcare expenditures by category today is remarkably similar to what it was in 1960.
Even everyone’s favorite whipping boy, prescription drugs, went from 11.5 percent to 11.6 percent. (It did fall off in the middle years and the trend is a faster climb than other categories).
Now think about what it would take to lower costs in every single sphere of healthcare delivery. Look at the blowback from the Affordable Care Act (Obamacare). It essentially kept the delivery model for healthcare the same and addressed insurance coverage. As sweeping changes go, it needs a new broom. Can you imagine trying to address cost on broader scale? There is no way meaningful change will occur in the current political climate.
Amy Rogers MD is not a practicing physician and nothing written here should be taken as medical advice from either Amy or AssetBuilder. Medical decisions should be made with care in consultation with your health care provider.