Newtown, Ct – July 29, 2016
It feels pretty good when we can make two steps forward and only one step back – Earlier this week, with our colleagues at CPR, we published our Fourth Annual Report Card on State Transparency Laws and while the grades haven’t changed much, when you scratch the surface a bit you find that a lot of positives steps have been taken by a large segment of the country, and that a few more could finally provide the majority of Americans with health care price information. That’s in stark contrast to what we found in our first report. Since then, legislators have taken the issue to heart and pushed through comprehensive legislation. While the implementation of those laws still lags, we know it’s only a matter of time, and that’s a big step forward. One of the important sections of our Report Card was written by our good friend Judy Hibbard and provides everyone, even those who aren’t interested in state-managed price transparency, a guide on how to convey price and quality information to consumers if – and that’s a big if – the organization conveying the information actually wants consumers to act on it. Because as we look around at what most states, health plans and employers are doing, in clear violation of Judy’s principles, you really can’t believe that they seriously want consumers to act on the information they provide. And then they act surprised when they don’t get the results they say they expected. For some, the task of marrying quality to cost should now be easier thanks to CMS’s release of a new star rating for Hospital Compare, but only to some because one of Judy’s recommendation’s is to marry price and quality information that is relevant to the specific condition, illness or treatment a consumer is looking for. CMS, however, has decided that an overall star rating is just as informative. However it can be misleading, and that’s a half step back.
What this means to you – Thanks to New Hampshire’s all-payer claims database, we were able to calculate average severity-adjusted costs for hysterectomies by facility, and we also calculated the risk-standardized rates of complications. While this graphic plotting the facilities certainly doesn’t conform to Judy’s recommendations, it can be the basis for a decision table that would. When we compared our quality measurement for these hospitals on hysterectomy procedures with the Hospital Compare rating, we found differences, which is not surprising. For example, while Dartmouth Hitchcock has an average star rating on the CMS website, it has a higher than average rate of complications for hysterectomies. And therein lies the rub with overall ratings because they fail to show specific results at the condition or procedure level, and that’s what’s really important to consumers. The nuanced approach to quality measurement is all the more essential as we all move increasingly towards value-based payments. And in that regards the government took a step forward this week by releasing a preliminary rule on three more mandatory bundled payment programs, covering cardiac procedures, severe fractures and heart attacks. As these types of programs are replicated in the private sector, the negotiated bundled payment becomes, de facto, the price. Marrying that price with an overall quality rating, however, will mislead some patients because there’s little doubt that a facility that is good at managing complex orthopedic procedures is not necessarily good at managing cardiac procedures or hysterectomies. And while the government’s move to implement these new bundled payments continues to augment the momentum of alternative payment models, the replication of the flaws embedded in the Comprehensive Joint Replacement program is a solid half step back. The proposed rule for the three new bundles continues to lack serious adjustments for patient severity, continues to put all of the control in the hands of the hospitals and freezes physicians out, and continues to prevent the significant opportunity to arbitrage sites of service, which we have shown has a big impact on lowering overall costs of care. This week could have been a two step forward week, but the unwillingness of this Administration to listen to thoughtful suggestions to improve programs, and its rush to fulfill a political agenda tied to a shrinking political calendar took us a step back. It’s not a total loss, but it is a lost opportunity.
Francois de Brantes