Better Care, Lower Cost Act

Last week, Sen. Ron Wyden, D-Or, together with co-sponsors Sen. Johnny Isakson, R-Ga., and Reps. Peter Welch, D-Vt., and Erik Paulsen, R-Minn introduced the bipartisan Better Care, Lower Cost bill (S. 1932/H.R. 3890).

Wyden is broadly thought to have the inside track to succeed Senator Baucus – who has been nominated as the US’s next Ambassador to China – as the successor chair of the Senate Finance Committee. But despite the bill’s referral to that committee and its bipartisan support it is unlikely to reach the Senate floor anytime soon. Thus, Congress.

Consider that according to CMS 68% of Medicare enrollees suffer from two or more chronic conditions and account for 93% of Medicare spending ($487 billion). And 98% of hospital readmissions involve beneficiaries with multiple chronic conditions. Consider that today the Medicare system creates barriers preventing healthcare providers from building on successful integrated care delivery models.

The core concept of this bill – a Better Care Program – isn’t new. BCPs have been developed in various states as teams of doctors, nurses and social workers working together under a capitated payment arrangement. In seeking to monetize the success of those programs, the Better Care, Lower Cost bill has elements of the accountable care framework promoted under the Affordable Care Act, but there are important differences:

1. The underlying incentive for care coordination of an ACO is the belief that such coordination will lower costs (i.e., utilization) and result in shared savings. Under a BCP, care coordination is germane to the program (though the troublesome utilization disincentive seems to me to remain).
1. BCPs are not impacted by the ACO attribution rule, which prevents providers from actively targeting and enrolling the sickest patients.
2. BCPs can use pricing incentives to encourage participation in high-value care and patient activation, whereas patients covered under an ACO are not limited by where they can seek care nor particularly incentivized to engage in care management.
3. Every beneficiary of a BCP receives an individual care plan, whereas ACOs are not required to create a plan for every beneficiary.
4. BCPs are specifically designed to target the chronically ill with the intent of effectively managing those conditions as efficiently as possible, whereas the ACO attribution rule prohibits differentiation of patient condition or need.
5. In theory, BCPs lack the volume-driven incentives of a FFS payment system that characterizes ACOs.

Coordinating care across healthcare providers is intuitively beneficial to a patient – in much the same way that coordinating parental responsibilities is to a child. But where this bill falls short from my reading is its tight focus on the clinical and pharmaceutical aspects of chronic disease/care management. Long-term care, though not defined, is specifically excluded from a BCP’s requirements, though some provision is made for coordination of Medicaid long-term care benefits.

If we are serious about wanting to utilize care coordination as the silver bullet to lower Medicare costs associated with treating beneficiaries with chronic diseases, then we will have to recognize taking a holistic approach that extends beyond doctors, nurses and drugs is necessary. It does little good to provide affordable therapy when the patient has no means of transportation. It does little good to prescribe a beneficial diet when they have no stove to cook. It does little good to prescribe medications when the patient cannot remember when and if they took the prescribed dosages.

A successful caregiving team under a capitated payment arrangement must also include the housing and community-based services and supports necessary for individuals with chronic disease to effectively manage their own care. The thinking behind the Better Care, Lower Cost Act is headed in the right direction, but it just seems to me whomever was responsible for drafting it doesn’t really understand chronic care delivery very well.

Cheers,
  Sparky