Two Marin hospitals experimenting with…
Two Marin hospitals experimenting with Obamacare Medicare programs, aim to cut costs and improve care
By Marin Independent Journal and Richard Halstead | rhalstead@marinij.com |
CHANGES WROUGHT by the Affordable Care Act, better known as "Obamacare," are coming soon to Medicare patients at two Marin County hospitals.
Both Marin General Hospital and Novato Community Hospital are participating in new programs designed to provide higher quality care for Medicare patients while reducing costs. If the hospitals are successful, they and the doctors who practice there stand to reap increased revenue by sharing in the cost savings.
In the case of Novato Community, the hospital could also end up losing revenue, if cost savings assumptions prove overly optimistic.
"The government has set out some grand goals and is allowing hospitals and health care systems and physician groups to try different ways to figure it out," said Dr. Joel Sklar, chief medical officer of Marin General Hospital. "Nobody knows how it is all going to play out."
Marin General has joined with the Meritage Medical Network, formerly known as the Marin/Sonoma IPA, to form an accountable care organization. Under the Affordable Care Act, groups of doctors, hospitals and other health care providers may form accountable care organizations to coordinate their patient care.
The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. If an accountable care organization can manage to reduce costs while meeting quality standards, it gets to share in the savings it achieves for the Medicare program.
Meritage Medical Network, the largest physician-owned primary and specialty medical group in the region, consists of about 700 physicians based in Marin, Sonoma and Napa counties. Joel Criste, Meritage's CEO, said that currently about 240 of his organization's doctors have opted to participate in the new accountable care organization.
Beginning in January, this new accountable care organization has taken responsibility for all the health care needs of 15,000 Medicare patients in the North Bay. Based on past years, the Centers for Medicare and Medicaid Services will calculate what it expects the cost of providing health care to these patients will be in 2013. If at the end of the year those costs are lower than projected, the accountable care organization will get to keep up to half of the cost savings.
The exact amount of money refunded to the hospital will vary depending on how high the institution scores on quality of care evaluations. Marin General and Meritage have committed to sticking with the accountable care organization for the next three years.
Criste said, "We believe lower costs and high quality will be assured if we provide consistent preventative, primary care with good access to physicians and good medical outreach."
He said better preventative care will help keep patients with chronic diseases from utilizing some of the most expensive types of care: emergency room treatments, hospitalization and medical tests.
This approach, however, is just one of many that is being experimented with as part of the implementation of Obamacare. For example, the government also gives accountable care organizations the option of reaping a larger share of the cost savings if they are willing to assume more risk. Under this model, the accountable care organization picks up the tab if at the end of the year the health care costs for a patient population exceeds projections.
Novato Community Hospital, which is managed by Sutter Health, is participating in yet another pilot program. Instead of assuming responsibility for a group of patients, Novato Community may agree to perform all of its hip- and knee-replacement surgeries for Medicare patients over the next three years for a set price agreed upon with the Centers for Medicare and Medicaid Services. If the hospital is able to do the work for less than that amount, it will get to keep the savings; but if the work ends up costing more, the hospital will be required to pay the difference.
There is one more proviso. The government is requiring that the target price be lower than the past cost of replacing hips and knee joints at Novato Community.
Brian Alexander, assistant administrator at Novato Community, said, "The cost of participating is that you have to automatically pass through a cost savings to Medicare. You have to take a 2.5 percent to 3 percent haircut on that total amount."
Novato Community is currently evaluating data Medicare has supplied it on payments made to past knee- and hip-replacement patients so the hospital can determine if it wants to proceed on this basis. The hospital has about six months to decide. It can still withdraw from the program. If agreement is reached and Novato Community moves forward, it must commit to participating in the program for the next three years.
The arrangement will also include follow-up treatment for the hip- and knee-replacement patients for between 30 and 90 days; the exact length of time is still to be determined. Sutter believes it can reduce the cost of patients' in-hospital stays, but it expects outpatient follow-up treatment costs to remain the same. Sutter also plans to share any cost savings with surgeons and other physicians treating the patients while they are in the hospital but says it will not ask doctors to share in the financial risk should costs exceed expectations.
Participants in this program, like accountable care organizations, will be required to meet specific quality targets.
"Medicare has said, obviously, quality can't be what you're sacrificing to reduce costs," Alexander said. He said patients will also remain free to see the doctor of their choice.
Walter Kopp, a San Anselmo-based health care consultant, said, "There are a lot of examples of how these approaches can result in lower costs and better outcomes."
For example, Kopp said if doctors agree to use the same type of knee and hip implants those medical devices can be purchased in larger quantities at a significant cost savings.
Kopp said costly errors can also be avoided if doctors and hospitals follow scientifically proven protocols, or checklists. He said such protocols reduce the chances of a foreign object, such as a sponge, being left inside the patient or of the surgeon operating on the incorrect knee or hip.
"Medical errors happen, and it's been a problem," Kopp said. "One hundred thousand Americans die every year because of medical errors in the hospital setting. The use of these protocols and financial incentives are geared to getting better outcomes."
Dr. Daniel Solomon, a Novato orthopedist and surgeon, said he is looking forward to participating in both hospitals' programs.
"I think the way we deliver health care can be optimized far beyond what we do now," Solomon said.
Solomon said costs can be lowered and care improved by following practices that minimize complications such as infections and blood clots. He said one way to accomplish this is to encourage patients to get out of bed sooner and to remove catheters as quickly as possible.
There are those, however, who remain skeptical about these new government initiatives.
Wanda Jones, president of San Francisco's New Century Healthier Institute, said, "It's an amateur "A Night at the Opera."
Jones said the Centers for Medicare and Medicaid Services arbitrarily decided to require participating hospitals such as Novato Community to reduce costs 3 percent over the next three years.
"The feds have no idea what results should be or would be produced," Jones said.
Jones worries that hospitals, such as Novato Community, that are collaborating with Medicare on specific services, will meet cost-cutting goals by shifting costs to other services paid for by private insurance.
"I don't see anything to protect the private patient from having more overhead loaded onto them," Jones said.
Contact Richard Halstead via e-mail at rhalstead@marinij.com
Richard Halstead | Reporter
Richard Halstead is a news reporter covering Marin County news, politics, health care, social services, Fairfax and San Anselmo.
rhalstead@marinij.com
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