For hundreds of doctors in Colorado treating nearly 30,000 Medicare patients, saving the federal government money now means earning a bonus.
One of the touted platforms for health-care reform is now launched in Colorado, with U.S. approval of Physician Health Partners’ “accountable care organization” potentially transforming treatment for seniors on Medicare.
Backers of the new partnerships — Colorado has one of 32 given the nod last month — say they will improve coordination of care while saving money for the largest health spender, Medicare.
Doctor and hospital groups who prove they can boost quality while cutting projected costs for a given group of Medicare patients can now split the savings with the government.
With Medicare patients costing between $5,000 and $10,000 a year to treat, the 27,500 Colorado patients expected in the partnership could bring millions of dollars in bonuses if the doctor group achieves cost cuts and quality.
“We’ve got a very screwy system. We don’t pay people to give the right kind of care,” said Dr. Alan Lazaroff, a Denver geriatrician who is helping lead the Physician Health Partners effort.
PHP is spending money upfront to add nurses, social workers and new software that will track hospital discharges, follow up with patients on necessary tests or check on prescription refills and conflicting medicines. Keeping patients away from overmedication and unneeded hospital visits will save the system money and improve health, Lazaroff said.
“More care is not better; less care is not better. Only better care is better,” he said.
Patient advocates and health analysts echo the hope that the new partnerships will spread throughout Medicare and then into the private system. They caution, though, that ACOs will have to prove to patients they are not like 1970s-style “capitated” HMOs, where insurance companies made profits by denying needed care.
“We’ll need to monitor it, but it seems to be the right balance of protections for consumers, incentives for doctors and savings for Medicare,” said Joe Baker, president of the Medicare Rights Center in New York.
Medicare projected 2011 spending at $763 billion, up $67 billion in a year.
One prime tenet of 2010’s health-care-reform act was extending insurance to millions of Americans. But another was slowing double-digit health- care inflation by experimenting with new payment systems and research-based medical decisions.
In launching the current wave of “pioneer” ACOs, U.S. officials said they could save $1.1 billion over five years.
Colorado is already a leader in trying similar models with Medicaid patients, who are jointly paid for with federal and state funds. There are 46,000 Colorado Medicaid patients now enrolled in these “regional care collaboratives.”
Medicaid providers are currently paid a $1 bonus per month, per patient to provide more tightly integrated care. The state wants to experiment with savings-sharing bonuses more like the federal model. Medicaid officials expect to have a first report on savings from the program in June.
Current patients of PHP physicians have been asked whether they want to opt out of the idea and are also being told the plan has no impact on their ability to choose a new doctor or seek another opinion. One or 2 percent are expected to opt out, officials said.
At the launch, the bonus system is emphasizing meeting 33 quality measures more than pressure to achieve cost savings. Over time, if ACOs meet the quality targets and save up to 2.7 percent of Medicare’s projected spending, they may earn something less than half of that back as a bonus, said PHP president Ken Nielsen.
“This is the way health-care reform is going to go,” Nielsen said. “It’s not about paying for a production system anymore. It’s about paying for quality and results.”
Although doctors might see some pay increase through the program, they are more likely to use the better payments to hire support staff and take fewer appointments in order to spend more time with each patient, Lazaroff said.
“Five years from now, I would hope that the entire payment system is different,” he said. “If you can free up people so they’re not a gerbil on a wheel all day, and produce healthier patients, everybody will win.”
Michael Booth: 303-954-1686, mbooth@denverpost.com or twitter.com/mboothdp
