Newtown, CT – August 19, 2016
Pilots are usually designated as such because there’s an expectation of course corrections based on field realities – During the next several weeks we will be releasing two Case Studies that summarize findings from the full first year of two separate field implementations, and each has already caused important course corrections. These corrections include changes to formulas for how budgets are set, the composition and points in quality scorecards, and gain sharing arrangements. The speed with which these changes are implemented is essential to the long term success of the effort because once design limitations are observed, they have to be corrected immediately. It makes absolutely no sense at all to wait. For example, one of our findings in implementing maternity bundles has been that there is significant variation in how hospital personnel interprets the guidelines that define the appropriate nursery level for a newborn. If one excludes newborns that are placed in the highest nursery level (level 4), and a provider uses a liberal interpretation of the guideline, there may be far too many babies that get excluded. Conversely, a provider that uses a conservative interpretation of the guidelines may end up with very high cost babies that stayed in a level 3 nursery. And as we’ve demonstrated in other analyses, a small overweighting of bad cases can wipe out the gains in all others. Ignoring the implications of this finding and failing to reflect it in a modified mechanism of budget setting would be irresponsible. Our pilots aren’t irresponsible, but others can be.
What this means to you – Staying the course for the sake of “pilot purity” is akin to the Titanic staying on course once the spotters alert the Captain to the presence of an iceberg. We’re all still in the early stages of deploying sophisticated alternative payment models (APMs) and icebergs will pop up when least expected. Course corrections at those moments are critical not just to the success of the pilot, but to the success of the move to APMs. And from that perspective much can be said about the recently released proposed rule for a new batch of Medicare-mandated bundled payment programs. In it there are several admissions of observed deficiencies in the current CMS bundled payment programs. Some of those shortcomings have been expressed several times by industry leaders since the inception of the Bundled Payment for Care Improvement, and more recently during the comment period for the Comprehensive Joint Replacement program. To-date, for many of us, the reaction from CMS has been akin to that of the Captain of the Titanic merrily ignoring the alert about the iceberg. We’re all watching the ship get closer and closer to the obstacle that will sink it and everyone in charge seems oblivious. Fortunately, that has changed, and none too soon. The course hasn’t changed yet, however, and we’re still headed for the iceberg, but it doesn’t seem deep and jagged enough to sink the ship, even though there will be damage. As the Medicare ship does start making the needed course corrections, we hope that it will have learned an important lesson that will be heeded by its next Captain: Don’t wait until it’s too late. Pilots have to be managed with the utmost flexibility to correct mistakes and increase the chances of success.
Francois de Brantes