Dropout by Dartmouth raises questions about healthcare law cost reduction efforts

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WASHINGTON – In its quest to rebuild the nation’s healthcare system, the Obama administration has urged doctors and hospitals to unite to improve care and reduce costs, using a model designed by researchers at Dartmouth College.

But Dartmouth herself, facing mounting financial losses in the federal program, has given up, raising questions about the future of the new entities known as Responsible Care Organizations, created under the Care Act. affordable.

The entities are at the forefront of efforts under health law to move Medicare away from an inconsistent fee-for-service system to a new model that rewards physicians who collaborate and coordinate care.

Medicare now has more than 400 responsible care organizations, serving eight million of the 57 million Medicare beneficiaries. Obama administration officials say the new entities save money while improving care, but some independent experts have questioned those claims.

“There is little analysis or data on the performance of ACOs in 2015,” said Dr Ashish K. Jha, professor at the Harvard School of Public Health. “The results were not a home run.”

In addition, he said, “there is little reason to believe that ACOs will flex the cost curve significantly” unless they take more financial risk, sharing the losses as well as the losses. savings with the government.

An assessment for the federal government found that the responsible care organization for Dartmouth had cut Medicare spending on hospital stays, medical procedures, imaging and testing. And he achieved quality of care goals. But he was still subject to financial penalties for failing to meet the money-saving criteria set by federal officials.

“We were cutting costs and saving money, and then we were paying a penalty on top of that,” said Dr. Robert A. Greene, executive vice president of the Dartmouth-Hitchcock Health System. “We would have liked to stay in the federal program, but it just wasn’t sustainable.”

Dr Elliott S. Fisher, Director of the Dartmouth Institute for Health Policy and Clinical Practice, said: “It’s hard to save money if, like Dartmouth, you’re a low-cost provider to start with. I helped design the model of responsible care organizations. So it’s sad that we couldn’t get it to work here.

Dr. Greene came up with this analogy: It’s easier for a person who walks a mile in 12 minutes to cut the time down to 10 minutes than it is for a five-minute mile to cross the four-minute barrier.

Dartmouth-Hitchcock is the main teaching hospital of Dartmouth Medical School, of which the Dartmouth Institute is a part.

Since responsible care organizations began operating in 2012, a number like Dartmouth have dropped out of the program, citing financial uncertainties and unrealistic benchmarks for spending. According to the Government Accountability Office, a congressional investigative body.

The idea of ​​responsible care organizations and the name can be traced back to a 2006 article by Dr Fisher and colleagues at Dartmouth and his medical school. Writing in the journal Health Affairs, they reported that Medicare beneficiaries received most of their care from physicians directly or indirectly affiliated with a local hospital.

Rather than trying to measure the performance of individual physicians, they said, Medicare should assess the hospital and physicians together and hold them jointly responsible for the cost and quality of care provided to a defined group of Medicare patients.

Indeed, it was an effort to overcome the fragmented nature of most American healthcare and to replicate some of the benefits of managed care while still allowing Medicare patients to see any doctor they choose.

New entities, unlike health maintenance organizations, “cannot tell you which health care providers to consult” and “cannot limit your health insurance benefits,” the Obama administration told beneficiaries . But, he says, doctors and hospitals working together in a responsible care organization can share information, including test results and prescription drug data, making it easier for them to coordinate patient care. patients.

By law, doctors and hospitals can share savings if they meet certain goals set by Medicare officials, who set separate criteria for each group of health care providers.

Andrew M. Slavitt, the acting administrator of the Federal Centers for Medicare and Medicaid Services, said responsible care organizations were starting to deliver tangible benefits. The current version is a first iteration “like the iPhone 2,” he said on Twitter.

Dr Fisher said he was cautiously optimistic about the future of responsible care organizations. “The spending data suggests modest savings overall,” he said, although he acknowledged that in Medicare “the model has yet to achieve the benefits many advocates have hoped for.”

Responsible Care Organizations is one of many demonstration projects led by the Center for Medicare and Medicaid Innovation, an office created by the Affordable Care Act to test new ways of funding and delivering care. Under the law, the Secretary of Health and Human Services has considerable power to scale up such projects nationwide if she finds that they would reduce Medicare spending without compromising the quality of care.

The center is testing new ways to pay for prescription drugs, medical devices, cancer care, hip replacement surgery, and many other services.

The Congressional Budget Office predicts that the centre’s activities will save $ 34 billion over the next 10 years, although it does not know which projects will save money.

Republicans in Congress are targeting the center, claiming its experiences compromise patients’ access to care and usurp the authority of Congress. In some cases, physicians and patients are required to participate.

“The agency has, in effect, made changes to Medicare and Medicaid programs while bypassing Congress,” said Rep. Tom Price, Republican of Georgia and chairman of the House budget committee.

The House Appropriations Committee has approved legislation that would eliminate $ 7 billion that remains at the center’s disposal.

Democrats are defending the innovation hub, saying the nation is in desperate need of finding ways to provide better care at lower cost. Closing the center or blocking its work would be “killing the baby in the nursery before it grows,” said Representative Jim McDermott, Democrat in Washington.

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