Medi­care Ad­van­tage CEO wel­comes re­form changes

Medi­care Ad­van­tage plans that co­or­di­nate care can thrive un­der re­form

Modern Healthcare - - Editorial -

By most ac­counts, I should be fum­ing. When Pres­i­dent Barack Obama signed into law his­toric health­care re­form in March, some would think I should have been among those full of angst, but I’m not—de­spite be­ing chair­man and CEO of a Medi­care Ad­van­tage plan in six states.

Why am I not an­gry? With this leg­is­la­tion, Congress has taken ac­tion to ad­dress a per­fect storm of prob­lems threat­en­ing to bank­rupt the Medi­care pro­gram. Among the tail­winds driv­ing Medi­care to in­sol­vency: a ris­ing num­ber of Medi­care ben­e­fi­cia­ries, in­creas­ing preva­lence of chronic ill­ness among the el­derly, and grow­ing spend­ing as­so­ci­ated with chron­i­cally ill ben­e­fi­cia­ries. The con­flu­ence of these is­sues is caus­ing tremen­dous and un­sus­tain­able es­ca­la­tion of costs in Medi­care.

With the changes in this new law, Medi­care plans will be in­creas­ingly fo­cused on ad­dress­ing these cost driv­ers and im­prov­ing qual­ity. This in­cludes grow­ing and re­fin­ing a model of co­or­di­nated care that I’ve wit­nessed re­duce costs and im­prove care for Medi­care ben­e­fi­cia­ries with chronic con­di­tions such as di­a­betes and heart fail­ure, and for those also on Med­i­caid. These are se­niors with spe­cial needs who are cost­ing our health sys­tem more than $300 bil­lion ev­ery year, ac­count­ing for $8 out of ev­ery $10 spent by Medi­care.

From now on, a Medi­care plan’s value will no longer be founded on its abil­ity to pay claims and col­lect premi­ums. Rather, it will be mea­sured by its fo­cus on co­or­di­nated care and how it ad­dresses po­ten­tially dan­ger­ous gaps in treat­ment, re­duces un­nec­es­sary hos­pi­tal­iza­tions and im­proves clin­i­cal qual­ity. All of this in re­turn for pay­ments now de­signed to equal what tra­di­tional Medi­care would have paid for the same per­son.

It’s sim­ple in con­cept, but it will take a dogged com­mit­ment to qual­ity and strate­gic un­der­stand­ing of what con­nects cost driv­ers to cost re­duc­tion to achieve.

Con­sider the cost to the U.S. health­care sys­tem that comes from in­ad­e­quate med­i­ca­tion man­age­ment — $170 bil­lion in drug-re­lated mor­bid­ity and mor­tal­ity. Ad­her­ence to ap­pro­pri­ate med­i­ca­tion reg­i­mens in pa­tients with chronic con­di­tions is as low as 43%. Fail­ure to ad­here to these reg­i­mens is the source of up to two-thirds of hos­pi­tal ad­mis­sions. Coun­sel­ing high-risk pa­tients about their med­i­ca­tions and alert­ing pri­mary-care providers of gaps in ther­apy rel­a­tive to those pa­tients are sig­nif­i­cant in­vest­ments, but can pay div­i­dends in re­duc­ing costs.

In­ef­fi­cien­cies in tran­si­tional care—the care that oc­curs as a chron­i­cally ill pa­tient leaves one set­ting for care in an­other—also con­sume a large chunk of health­care spend­ing. When tran­si­tions are done poorly, the con­se­quences in­clude med­i­cal er­rors and du­pli­ca­tion of ser­vices that in turn of­ten mean hos­pi­tal read­mis­sions. Re­cent stud­ies es­ti­mate that more than half of all Medi­care and Med­i­caid spend­ing is re­lated to hos­pi­tal read­mis­sions in some states. That’s be­cause health plans have fo­cused more on scru­ti­niz­ing hos­pi­tal uti­liza­tion rather than co­or­di­nat­ing and im­prov­ing care across mul­ti­ple tran­si­tion venues— whether hos­pi­tal, skilled-nurs­ing fa­cil­ity, out­pa­tient pri­mary care or the pa­tient’s own home. Many of these hos­pi­tal­iza­tions are pre­ventable, and Medi­care Ad­van­tage plans must en­sure that their hos­pi­tal­ized mem­bers re­ceive the nec­es­sary post-dis­charge care.

We also have work to do in­te­grat­ing ser­vices that ad­dress the be­hav­ioral and psy­choso­cial is­sues re­lated to chron­i­cally ill pa­tients—in par­tic­u­lar co-mor­bid de­pres­sion, which af­fects up to 25% of the Medi­care pop­u­la­tion. De­pres­sion re­sults in more se­vere med­i­cal com­pli­ca­tions, worse out­comes and higher health­care costs. Spe­cific strate­gies to ad­dress it, in­clud­ing ad­e­quate so­cial sup­port, im­prov­ing ac­cess to pre­ven­tive care and tak­ing an ac­tive role in health ed­u­ca­tion and self-man­age­ment, can pro­duce con­sid­er­able clin­i­cal and eco­nomic ben­e­fits.

All of this re­quires health plans to work with pa­tients and health­care providers in new and cre­ative ways. In­no­va­tive mod­els—such as physi­cian house calls for chron­i­cally ill pa­tients—can have a huge ef­fect on qual­ity and help pa­tients and care­givers bet­ter un­der­stand their self-care needs. By bring­ing prac­ti­tion­ers into the homes of high-risk pa­tients, health plans iden­tify treat­able con­di­tions sooner and help mo­ti­vate pa­tients to keep up with reg­u­lar pri­mary-care vis­its. Re­port­ing visit find­ings back to the pa­tient’s com­mu­ni­ty­based physi­cians in col­lab­o­ra­tive and con­sis­tent ways re­liant on ev­i­dence-based medicine tight­ens bonds among mem­bers, their providers and the health plan. In­deed, the re­form law en­cour­ages this very type of co­or­di­nated and com­mu­nity-based ap­proach.

Those within the Medi­care Ad­van­tage in­dus­try who do these things well will be rec­og­nized and re­warded un­der the new law. Those un­able to do this will fail. New in­cen­tives will pro­vide bonus pay­ments for high-qual­ity Medi­care Ad­van­tage plans as well as those who of­fer high­qual­ity plans in ru­ral ar­eas and other ar­eas where ac­cess to health­care is more chal­leng­ing.

This is the les­son of health­care re­form for Medi­care Ad­van­tage plans, and it is ex­cel­lent news for our nation’s chron­i­cally ill Medi­care ben­e­fi­cia­ries—es­pe­cially when you con­sider the real-world health­care needs of the sick­est, most frag­ile ben­e­fi­cia­ries and their cost to our health­care sys­tem.

So, no, I’m not an­gry. I see great op­por­tu­nity ahead to make Medi­care Ad­van­tage bet­ter and more ef­fec­tive at re­duc­ing Medi­care costs. The truth is that I, and oth­ers at my com­pany, feel val­i­dated.

Those who do these things well will be re­warded by re­form. Those who

do not will fail.

Fred Dun­lap is the chair­man and CEO of XLHealth Corp., Bal­ti­more, which owns and op­er­ates Medi­care spe­cial needs plans in six states.

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