by Rob Ingraham
There is general agreement in Congress and among health care stakeholders that the Medicare Trust Fund is in serious financial trouble and many programs could be in jeopardy if Congress does not come up with ways of reducing costs. While a number of possible remedies are circulating, one has sparked a firestorm of protest from health care organizations and patient advocates to equipment manufacturers.
The concept is known as “gainsharing” and it proposes a formal arrangement between hospitals and physicians whereby doctors will be financially rewarded for reducing the average services ordered per patient for a particular diagnosis, for using only specific technologies and products on which the hospital has negotiated discounts, for reducing use of supplies, shortening hospital stays, or achieving other economies.
Under current Medicare and Medicaid rules, gainsharing is illegal because it violates prohibitions against hospitals offering payments to physicians as an inducement to limit services, or “anti-kickback” statutes. But the Department of Health and Human Services’ Office of the Inspector General has decided to allow some limited gainsharing programs for a 1-year trial under explicit guidelines designed to protect patient quality of care. The participating hospitals have not been disclosed and many critics question if the results will be valid after only a 1-year trial.
A sister concept also circulating in legislative proposals is known as “efficiency.” Under efficiency plans, doctors are “rated” and then rewarded for the “efficiency” of the care they provide. This “efficiency” will be determined either by the Secretary of HHS or by a physician “score,” which combines quality and efficiency measures that compare physicians to their peers.
Both plans assume that doctors who generate more costly services are not efficient, without regard to whether the average amount of care a patient receives represents the best, or even the baseline, standard of appropriate care. Both plans reward doctors based on their willingness to cut expenditures, not on the outcomes of their approach to treatment.
A Coalition Forms
United Spinal has joined United to Protect Quality Care, a broad-based health care coalition dedicated to fighting gainsharing and efficiency proposals. At a recent conference in Washington, DC, sponsored by the Medical Device Manufacturers Association, United Spinal’s Deputy Executive Director Paul J. Tobin spoke from his own experience.
Tobin broke his neck body surfing at a beach while in the Navy. “Ironically, it was called ‘Dam Neck Beach,’” he said. Tobin was rushed to Virginia Beach General Hospital where surgery was performed and doctors stabilized his injury with titanium plates and rods. Tobin said he “would hate to think what would have happened” if, instead of titanium, the attending physician had opted for a less expensive procedure just to save money. “I want physicians to look at every patient on a case- by-case basis and make sure they’re providing the highest level of care, the most innovative level of care, without even the temptation of personal gain from cutting corners.”
Tobin explained that a 2004 RAND study “showed that individuals with acute and chronic health conditions received only half of the established standards of care. If gainsharing were to go forward, how would this affect what is already a deplorable situation where people with acute and chronic conditions don’t receive the standards of care?” Tobin acknowledged that the legislation had good intentions, but “you cannot legislate the morality of a physician who’s thinking about a country club membership, or his alimony payments, or anything else. Once you incentivize him to cut corners, you’ve got a risk to the patient.”
Gainsharing was a component of Senate Bill 1002, the Hospital Fair Competition Act, introduced in May by Senators Charles Grassley (R-IA) and Max Baucus (D-MT). The bill stated that the Secretary of Health and Human Services “shall establish requirements for arrangements between hospitals or critical access hospitals and physicians in which physicians share in the savings experienced by the hospital or critical access hospital by reason of cost reduction efforts that involve the physicians.” The following month, Senator Grassley introduced another bill, S. 1356, the Medical Value Purchasing Act of 2005, which included physician profiling efficiency measures whereby the HHS Secretary will be required to develop a “comparative utilization system” to measure the efficiency of the care provided by a physician or practitioner and determines the amount of a reward for such efficiencies. The Senate, however, recently came up with a reconciliation bill which did not include gainsharing, but the efficiency component is still part of the legislation.
In July, Connecticut Representative Nancy Johnson (R-5th) chair of the Health Subcommittee of the House Ways and Means Committee, introduced HR 3617. Johnson is expected to introduce a gainsharing bill before the end of the year.
Tobin concluded by asking, “Does the physician provide the highest level of care available? Or does he yield to the temptation of personal gain? I think what we have here is something that stresses short-term gain versus long-term gain. We’re looking at one fiscal year at a time. . . I’m very well aware that the Medicare Trust Fund is in jeopardy, but I can assure you that by providing somebody with preventative health care, by giving them the most innovative interventions possible, we will ultimately develop long-term efficiencies. For the life of me I can’t figure why we’re taking a short-term view on health care. I cannot speak adamantly enough against [gainsharing]. I think this is a horrific direction that we’re going in. I think it puts the most vulnerable population at risk.”
Rob Ingraham is senior editor for Communications.
