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  • How we pay for medical care in 2014: Paying for quality and efficiency

    Whitney McFadden
    AMSA Health Policy Chair

    Bodenheimer and Grumbach outlined in their book, Understanding Health Policy: A Clinical Approach, a view of health policy and the faults of our current healthcare system. It seems we are very familiar with the pitfalls of our current system. In order to be clear and not dwell too much on the obvious, our system struggles with overuse and underinsurance/lack of insurance that is being addressed with the Affordable Care Act. Today we pay for healthcare out-of-pocket, with individual private insurance, employment based private insurance, or government financing. Insurance plans for healthcare began in the depression due to unstable payments. Medicare was established to cover the elderly and lower income individuals. Currently physicians are paid in a multi-tier system including fee-for-service, episode illness grouping, capitation (per head fee to general practitioner and specialist), and salary.
    2014 will be a year of new payment methods for healthcare. The sustainable growth rate (SGR) has historically be underfunded requiring congressional intervention to avoid the reduction in payment to medical reimbursement that would make it unsustainable. This year, a bipartisan fix will change payments to value based on measure of better quality and efficiency instead of the current greater volume and intensity of services. Some evidence exists in community clinics that this method has been successful and alternative payment models (i.e. transitional care) have been attempted as possible solutions. McClellan makes the point that we currently do not know how to create a system that is cheaper and rewards improved health outcomes. 

    One solution is single payer healthcare, which addresses the funding source. However our problems with how payments will be made to increase efficiency would still remain. There are methods by which we can change the way our healthcare dollars are spent, but we will not find those solutions on the national stage. Instead, each clinic and hospital must look at their individual patient population, the diseases they treat, and the access to care in the community in order to develop a system that is financially viable. We would benefit from establishing a medical economics team at every health provider institution to allow for individualized services from technologic tools that we know work well. The team based approach to healthcare that is the foundation for our medical training should extent to healthcare funding. Instead of trying to find the rules that would apply to everyone, we need to establish the framework by which everyone can create their rules, and do it with ease, efficiency, and completeness.

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  • Health Policy Update: Medicare Patient Access

    By Katie Ni
    AMSA Education & Outreach Coordinator, Health Policy Committee

    In a near-impossible feat of bipartisan collaboration in Congress, the House Energy and Commerce Committee has voted unanimously, 51-0, for a bill that aims to solve the long-overdue problem of Medicare’s sustainable growth rate.

    Since 1997, the sustainable growth rate (SGR) has been employed as a method to control Medicare spending by ensuring that increases in expenses for Medicare recipients do not exceed the yearly increase in GDP. However, the SGR formula achieves this goal by cutting payment for physician services. By this method, physicians have faced proposals for significant cuts every year for the past dozen years, followed by last-minute “doc fixes” from Congress that help undo the cuts. SGR has therefore long been a huge headache to physicians, and serve as a disincentive for physicians to treat Medicare beneficiaries. Continuation of the current SGR system threatens to reduce Medicare recipients’ access to health care services every year, and is also costly for Congress to continuously patch up with “doc fixes”.

    The proposed bill, to be called the “Medicare Patient Access and Quality Improvement Act
    of 2013”, will repeal the current SGR system and eventually replace it with a system that rewards physicians who perform well on “quality assessments”. The prospect of a permanent solution to the sustainable growth rate is a step in the right direction.

    Some physician groups have voiced concerns regarding the bill’s cost reduction methods. The bill reduces payment to services it overvalues by 1% each year from 2016-2018. Historically this money has been placed back into areas that are undervalued. If this policy is removed, it will undermine the scheduled payment increases leaving vulnerable funding “holes”. While the bill provides 5 years of stable Medicare payments, the payments grow 0.5% each year, an increase that fails to keep up with the costs of providing Medicare services.

    Despite the unanimous support in the house committee, Senate Finance members announced they are creating their own bipartisan “doc fix”. While it is unclear how quickly this bill and future propositions will get passed into law, the means by which these bills maximize provider participation in the Medicare program and safeguard access to health services for Medicare beneficiaries should be thoroughly addressed.

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  • Don't Let the Supercommittee Cut Residency Positions!

    As you have probably heard, the Congressional "Supercommittee," or the Joint Select Committee on Deficit Reduction, is scheduled to announce its recommendations to cut $1.5 trillion in federal spending over the next ten years on Wednesday, Nov. 23. The Supercommittee was created by the Budget Control Act of 2011 back in August to avert the debt ceiling crisis. Congress is scheduled to vote on these recommendations by Dec. 23. If Congress fails to adopt Supercommittee recommendations, there will be an automatic sequestration, or across-the-board cuts.

    The Supercommittee is rumored to be contemplating substantial (up to 60%) cuts to Medicare Graduate Medical Education (GME) funding which supports vast majority of residency programs in the U.S. As a result, it is critical that we, as physicians-in-training, make our voices heard on this issue. Please take a few seconds to email your members of Congress and urge them to protect Medicare GME:

    The American Medical Student Association strongly supports continued Medicare GME funding and condemns any effort to cut this funding. Massive cuts to Medicare GME will compromise patient access to care and, in some cases, may result in the closure of some residency programs. As the United States seeks to insure millions of previously uninsured Americans, it is critical that the federal government continue to invest in a robust health professional workforce to meet our nation's health care needs. Sustained GME funding is an essential element of this investment.  

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  • Preserving Funding to Medicaid and Medicare

    By Colin McCluney
    AMSA Education & Advocacy Fellow

    Last week, I had the pleasure of representing AMSA, along with other national leaders, at meetings at the White House and the Capitol to emphasize the importance of preserving funding to Medicaid and Medicare. While key entitlement programs are on the chopping block, we want the voice of physicians-in-training to be heard. AMSA joined with 14 other physician organizations in signing a coalition letter to oppose cuts to Medicaid and Medicare; this letter was hand-delivered to leadership from both parties in the House and the Senate. In addition to expressing our opposition to any reduction in benefits or coverage from Medicaid and Medicare, we emphasized our support for innovation in health care administration to reduce costs.

    Medicare has long been one of the most popular governmental programs, covering over 45,000,000 individuals, and has thus been largely protected from significant cuts. Medicaid, on the other hand, is less well-regarded and is frequently targeted as an opportunity for cuts. Why is this? Perhaps it’s due in part to the unglamorous perception that Medicaid is for poor people, a segment of the population that is hard to mobilize politically, frequently forgotten about and easy to demonize (think about the notion of lazy welfare cheats for example). On top of that, some groups and individuals have claimed that people are better off being uninsured than having Medicaid. Take all these things together and you can see how easy it could be to cut elements of the program. As you might have intuited though, these assertions aren’t true. While Medicaid does cover eligible individuals at certain poverty thresholds, it is worth noting that Medicaid covers some 30,000,000 children nationwide and provides payment for about a third of all births. Most exciting, though, are the recent findings to come out of a randomized controlled trial of Medicaid in Oregon. The origins and methodology have been extensively reviewed elsewhere but the key results were that individuals with Medicaid received more preventive care (for example, mammograms), had fewer financial problems (for example, borrowing money to pay debt or having bills end up in collections), reported having a regular doctor, and were much more likely to rate their own health as “excellent” or “good” (rather than “fair” or “poor”). While objective data on quantitative health outcomes won’t be available for another year or more, it is clear that Medicaid has already had a substantial positive impact on those individuals lucky enough to have been enrolled. This study – the first on the effects of health insurance since the landmark Rand study – shows clearly the value of Medicaid in improving the health and well-being of some of the most vulnerable Americans.

    The budget negotiations will rumble on and Medicaid & Medicare will continue to be targets for cuts. Even after this round of discussions is finished, it is clear that there will be more battles to come. We see, however, that these programs are essential and effective in helping provide access to necessary medical care for a significant portion of the population, and we will continue to fight to support Medicare and Medicaid, to oppose cuts, to ensure & expand coverage, and to reduce waste.

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  • Comparative Effectiveness Research and Cost-Effectiveness Analysis... What's the Difference?

    by Ken Williams
    Graduate Special Student
    The Johns Hopkins University Bloomberg School of Public Health

    Lately, I have had a lot of people ask me about the difference (if there is one) between comparative effectiveness research (CER) and cost-effectiveness analysis (CEA), so I thought that I would take this opportunity to provide a very brief introduction to the subject.

    The American Recovery and Reinvestment Act (ARRA) created the Federal Coordinating Council for Comparative Effectiveness Research (Federal Council), which is charged with coordinating the research and guiding the allocation of the money invested in CER by ARRA. In all, $1.1 billion USD has been earmarked for CER with $300 million going to the Department of Health and Human Service’s (HHS) Agency for Healthcare Research and Quality, $400 million for the National Institutes of Health, and $400 million for the Secretary of HHS. With this amount of money on the line, CER has become a very hot topic here inside the beltway.

    While there are many definitions of CER out there, the Federal Council, in a report to the President and Congress, provides the following, which serves as an overall guiding definition for the entire federal government:

    Comparative effectiveness research is the conduct and synthesis of research comparing the benefits and harms of different interventions and strategies to prevent, diagnose, treat and monitor health conditions in “real world” settings. The purpose of this research is to improve health outcomes by developing and disseminating evidence-based information to patients, clinicians, and other decision-makers, responding to their expressed needs, about which interventions are most effective for which patients under specific circumstances.
    • To provide this information, comparative effectiveness research must assess a comprehensive array of health-related outcomes for diverse patient populations and sub­ groups.
    • Defined interventions compared may include medications, procedures, medical and assistive devices and technologies, diagnostic testing, behavioral change, and delivery system strategies.
    • This research necessitates the development, expansion, and use of a variety of data sources and methods to assess comparative effectiveness and actively disseminate the results.

    That is, CER takes evidence-based data about different interventions and seeks to determine the benefits and harms of each as compared to each other.

    One of the most important things to notice about the list is that it does not ever mention cost. This is where most of the confusion sets in. In the US, the official CER guidelines, as presented by the Federal Council, do not take cost into consideration as a factor. This is not the case universally, however, as other countries, sub-national governments, and organizations do list CEA as an important component to CER.

    As compared to CER, cost-effectiveness analysis (CEA) is entirely focused on the costs of medical and public health interventions. Specifically, CEA will calculate the cost per some measurable improvement (or decline) such as quality-adjusted life years or disability-adjusted life years or the like. While CEA is not included as part of the official US CER guidelines, it is still important to note that CEA can provide valuable supplemental information for decision makers.

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