Disappointing results cast doubt on promise of cost savings from key reform provisions
Many in healthcare, including leaders at the CMS Innovation Center, are betting on experiments with more coordinated services and value-based payments to show it’s possible to spend less for better outcomes. For two decades, the Medicare program has tried some of these ideas—and now a new federal report has some bad news about the results.
Last week, the nonpartisan Congressional Budget Office reported that a study of 10 major demonstration projects in care coordination and value-based payment showed that most programs did not reduce Medicare spending. Despite the discouraging conclusion, providers and researchers alike say there’s too much promise to give up on the demonstration concept just yet.
The CBO’S findings examined the outcomes of six disease-management and care-coordination demonstrations and four value-based payment projects. For the former, the programs aimed to improve the quality of care for beneficiaries with chronic illnesses whose healthcare is particularly expensive. In the latter category, providers were given financial incentives to improve the quality and efficiency of care—as opposed to payments based on volume and intensity of services delivered.
According to the results, in nearly every program that involved disease management and care coordination, spending was either unchanged or increased relative to the spending that would have taken place if the program didn’t exist—when the fees paid to the program were taken into account. Similarly, the results for the value-based payment projects produced little or no savings for the Medicare program, the study showed.
Randy Brown, vice president and director of health research at Mathematica Policy Research, said the study’s conclusion that the disease-management and care-coordination projects didn’t lower Medicare spending is not surprising. First, it’s hard to save money on a very sick patient population with chronic problems such as heart disease or diabetes. For example, Brown said a patient in this group could have both arthritis and heart disease—and could be told by an arthritis specialist to stay off his feet, while his cardiologist instructs him to get on a treadmill.
A nurse care manager with Health Quality Partners pays a personal visit to a patient, a feature shared by successful disease-management demonstrations.