I’m just grabbing a lot of very good information from Health Affair’s Carmela Coyle on the Maryland experiment on cost control and quality improvement:
midway through year two of a five-year demonstration period that Princeton University health care economist Uwe Reinhardt called “the boldest proposal in the United States in the last half century to grab the problem of cost growth by the horns,” Maryland, with hospitals leading the way, has made remarkable strides in pursuit of that Triple Aim. Included in this progress is significant headway on the agreement’s quality metrics and a savings to Medicare of $116 million thus far. And while there have certainly been challenges in making such a historic change, the progress is undeniable…..
For four of the five metrics, hospitals are exceeding the target (as an example, prior to the waiver’s passage, hospital revenue growth averaged more than 6 percent; in the first year, it was a scant 1.47 percent). On readmissions, while the rate of reduction is short of the goal, hospitals are reducing readmissions and reducing readmissionsfaster than the rest of the nation. Overall, the new model is proving successful at bending the cost and quality curves.
Maryland has reorganized how its hospitals get paid. They are spending less money while improving quality. This is amazing.
The change is how hospitals have been getting paid. They now get a fixed pot of money to take care of all patients on Medicare and Medicaid instead of charging for each service. A global budget means they only make money if the services provided are effective and efficient. Under the old fee for service regime, a patient who came back six weeks later complaining of the same problem was a revenue and profit center. Now that person is a cost center. It makes financial sense for hospitals and providers to solve the problem the first time and to do so in a manner that does not create additional problems (like hospital acquired infections).
I want to see another couple of years of data, but a model like this is an excellent pilot study of what the next round of healthcare reform could look like as we are getting coverage expansion done now, and then have to focus on systemic cost control in round 2.
“Maryland has reorganized how its hospitals get paid. They are spending less money while improving quality. This is amazing.”
Yay for Maryland!!
My inner cynic would like to point out that another way to reduce the readmission rate and save money on care is to ensure the patient ends up dead the first time. /black humor
It will be interesting to see how this plays out, it may mean longer stays to solve problems rather than the get ’em in, get ’em out process that used to rule patient care as it was dictated by just what the insurance companies would pay. May not solve the issue on the private sector side, but could have a yoooge impact on anyone under a federal program. This will place more focus on the internal medicine guys to actually find out what a patient is suffering from rather than symptom response treatment.
to use the belated buzzword salad process, this may shift the paradigm…..
Balloon Guy is back! Happy face! But the column with Richard’s post is now too skinny. Sad face.
Excellent news about how Maryland has worked out a way to encourage healthcare providers to get it right the first time, rather than make medical mistakes an income opportunity. Are there any signs yet that this may catch on in other states?
@Luthe: Yeah, but people dying from medical conditions tend to do so slowly and in *very* expensive ways. And people dying quickly will draw a lot of scrutiny in very little time. Not saying this can’t be gamed, but simple malpractice won’t suffice.
@Luthe: Black humor, perhaps. But back when I was a case manager approving care, a co-worker pointed out that if we really wanted to see profit gains we should deny all the truly life saving necessary care. He was in charge of analyzing the actual costs. I think he was joking.
It’s too bad that Maryland’s current administration will take credit for this when it was actually implemented by Governor O’Malley and Health Secretary Josh Sharfstein.
So how do we connect this with analyses of patient outcomes and improved patient health?
The study indicates that costs were reduced or contained, but how does this relate, in practical terms, to hospital effectiveness and efficiency?
I see that two of the metrics were reduction in re-admissions and to “reduce infections and other hospital-acquired conditions by 30 percent within five years,” but the latter is more a reduction in hospital screw-ups than effective treatment of the patient’s ailments.
this place is a hot mess.
I’ll withhold further comment until they announce it’s actually finished, presumably some time around Hillary’s inaugural ball.
@Kylroy: Hell, expert malpractice is needed when the simple won’t kill you fast enough
Effectively treating what ails the patient is not the only thing a hospital needs to do to get him well and heading out the door ASAP. Not letting him get sick from something else while he’s there also helps.
@japa21: Yeah, there can be some amazingly black humor from sane people or an excellent career path for sociopaths in the care management/utilization review field.
@Amir Khalid: Yep, avoiding a central line infection during a routine surgical stay avoids a $20,000 recovery period and significantly reduces hospital stays (good for the patient) and greatly reduces the risk of death (even better for the patient)
thanks for very interesting post.
My question is how feasible is it for other states to do this right now.
Maryland has long had stronger inpatient price regulation than most states, and I think (but not sure) most experts would say inpatient charges and expenditures more closely tracked actual costs than most states. So, MD had better information on how to set the global budgets? Think that history played an important role in the initial success?
Edit and trigger warning: If I can get a ‘maybe so’ from RM, I think that will strengthen my case for ‘going Swiss’ re direction of improvement of ACA.
If we were a sane nation, this topic would be front and center in every major political debate. Instead we have a debate where the GOP clowns talk about how we can cut taxes and balance the budget because … FREEDOM!
@lethargytartare: I dunno. Number adjacent whitespace is greatly collapsed in this post compared to the previous ones. Number font is also smaller. Incremental changes being incremental and all.
Why is this website broken again? The image at the top is also showing on John’s post below it on the homepage. I’ve had similar experiences earlier today.
Also, the individual post pages are super-small because there’s a useless avatar which contains either a crayon on a black field or in the case of this post the image that was posted along with it.
Iowa Old Lady
The post numbers are close to the name of the poster now. That looks pretty good.
@Richard Mayhew: You’re way closer to this than me (I don’t even work directly in healthcare anymore) – *is* there much of an issue with people applying the Alan Grayson (“Don’t get sick, if you do, die fast”) health plan within insurance companies? There’s the instinctive reluctance to pay anything, which efforts like this are showing is in fact counterproductive, but I don’t know that it ever reached the point of actively trying to get the customer killed.
Wouldn’t they have to accomplish at least both things? And a measure of hospital effectiveness would have to take both things into consideration, right?
@Xantar: Actually the fact that a Republican Governor is running a state with a successful Obamacare program is not a bad thing. I’m sure he would try to destroy it if he could, but Maryland has a strongly Democratic legislature. Thankfully.
Comment numbers, yay! Link to comments at the bottom of the post, YAY! Thanks, Obama. Not really, thanks Tommy.
Hospitals are playing games with these things now a bit. I had ankle surgery last year and a few weeks later my leg swelled up and the physical therapist saw it, freaked out, and made me call 911 in case I’d thrown a clot. The ER admitted me, or so I thought, because I was transferred to a regular hospital room, had the little plastic bracelet on, the doctor came every day, the nurses brought me meals and everything and woke me up at 5 a.m. to check my vitals for three days. Come to find out, I was not actually admitted, but just “observed,” because if I was admitted they would have been dinged by Medicare.
You can read the original agreement here, and if you go down to Appendix 7, you’ll see the measures that are used to evaluate this initiative. In addition to readmission and prevention of hospital-born infections, there’s also a patient satisfaction survey, some measures of in-patient processes (e.g. within 30 minutes of being admitted for acute myocardial infarction, did a patient receive fibrinolytic therapy?), life expectancy calculations, and also calculations for lowering chronic disease (e.g. are there fewer emergency room admissions relating to asthma?).
@Iowa Old Lady: I am very excited about the comment numbers – I think they look great!
As of this afternoon, we also have:
A less-bright screen which is easier on my eyes
A button at the bottom that takes us back to the top of the thread
We have a balloon man instead of a pencil button that does nothing
I can now tell that Iowa Old Lady has a website that I can click and that the guy right above her – Bart – does not.
I, for one, am happy to see all the progress!
True, but medical errors are a major cause of death – up there with opiate overdoses and car accidents – and merit a lot of attention.
Also, yay on the new comment numbering. Good size, close to post, yay.
Edit: but I see blockquotes are coming out in a larger font. Not yay. Well, two steps forward, one step back.
@jl: history is critical in that this was not inherently foreign and scary for the hospitals. Other states, esp. massachusets could be good candidates for tweaking it for local circumstances. Yes, Swiss model is a long term plausible premise for US healthcare
@WaterGirl: thank Alain, I think he does most of that stuff.
I wholeheartedly agree. It’s fascinating to watch the evolution (which we all know is just a theory). Good on ye, Tommy!
I’m really digging f.lux, by the way. Every now and then, later in the day, I go to the f.lux widget and click “disable for one hour” just to see how frighteningly bright the page would be without it.
This also applies to my primary work application, for which the default background is white, though I could change it to any color I desire.
Appendix 7? That’s a lot of reading.
But good to know of some of the other measures by which the hospitals were evaluated. Thanks.
One other thing in the overview stood out to me: “There is no need for public hospitals.” I wonder why this would be such a big deal.
A flat rate mechanic gets paid X hours to do a job, regardless if how many hours it takes. But if the job isn’t done right, its a come back, and the mechanic does that for free. Works pretty well.
Treating older patients caught in the revolving doors between the nursing home and the hospital is problematic, as neither institution wants the patient to die on them. It’s horrible for the patients and their families, too. Pneumonia or bedsores are enough to warrant a hospital admission, where they get well enough to be sent back to the nursing home, where, almost inevitably, they get sick again. This is a situation that the improvements in Maryland don’t address.