SPECIAL COMMUNICATION
Health Care Reform in the United States: An Opportunity for Interventional Radiologists J. David Prologo, MD, and Carolyn C. Meltzer, MD ABBREVIATIONS ACO = accountable care organization, CMS = Centers for Medicare and Medicaid Services, PPACA = Patient Protection and Affordable Care Act, RVU = relative value unit, SGR = sustainable growth rate, VBM = value-based modifier.
Health care reform is an ongoing reality in the United States. This communication provides a concise description of the context in which this reform has emerged, explains the major provisions being translated through providers as of today, and elucidates potential opportunities in this dynamic environment for interventional radiologists. According to Medicare trustees, the Medicare fund will be bankrupt by 2026 because of soaring health care expenditures (1,2). Expenditures, or “costs,” as referred to in this setting, represent dollars charged for medical care, procedures, and hospital stays, as well as the dollars paid to insurance companies on behalf of patients. Cumulatively, these costs represent 18% of the gross national product, or $2.7 trillion (3). Despite this exorbitant spending, the United States ranks poorly in several important health care outcome metrics, including male and female life expectancies, infant mortality, and obesity, among others (4–6). In 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act (PPACA), a law comprising almost 2,500 pages that outlines provisions to be implemented over 10 years that aim to (a) improve access to health care, (b) improve the quality of patient care, and (c) realign the focus of providers with fiscally responsible behavior. Although these aims are interdependent to a great degree, two major themes emerge from analysis of the law. First, the law expands medical insurance coverage of individuals through health insurance market reform, elimination of preexisting condition restrictions, individual and employer mandates, health From the Division of Interventional Radiology and Image-Guided Medicine (J.D.P.), and Department of Radiology and Imaging Sciences (C.C.M.), Emory University School of Medicine, 1364 Clifton Road, NE Suite D112, Atlanta, GA 30322. Received December 31, 2013; final revision received February 26, 2014; accepted February 27, 2014. Address correspondence to J.D.P.; Email: [email protected] Neither of the authors have identified a conflict of interest. & SIR, 2014 J Vasc Interv Radiol ]]]]; ]:]]]–]]] http://dx.doi.org/10.1016/j.jvir.2014.02.030
insurance exchanges, federal subsidies for the poor, and expanded access to Medicaid. The funding for these changes will result from taxes on health care industry companies, penalties on those who remain uninsured or fail to provide insurance, and provider cuts (7,8). Second, provisions are included over time to improve quality of patient care and to control costs. This latter theme seeks to integrate improved efficiency and cost savings at the provider level in an effort ultimately to decrease spending and to improve further access to care (7,9–11). If one considers the payer - provider - patient chain structure of health care (Fig 1), the idea of decreased costs at the provider level is sound. It would increase retained earnings of the payers, maintaining Medicare as a source of income for providers and allowing private insurers to charge less to patients, which would ultimately improve access from the patient side through lower costs. Mission accomplished? Almost—except for the lurking relative value unit (RVU) saboteur.
SUSTAINABLE GROWTH RATE AND RVUS RVUs were developed as a method of accounting for physicians’ work effort and adopted by Medicare and private insurers as a reliable and reproducible method for setting fee-for-service schedules (12,13). At the present time, the Relative Value Scale Update Committee is a group of specialists who evaluate and determine the appropriateness of RVUs, and their recommendations are adopted by the Centers for Medicare and Medicaid Services (CMS) (14). RVUs are calculated by assigning a numerical value to a service, as determined by the Relative Value Scale Update Committee through consideration of three factors: (i) relative time, skill, training, and intensity required (work RVU); (ii) costs associated with maintaining an overall practice to render such services (practice expense RVU); and (iii) costs associated with liability insurance required to perform the service (malpractice RVU). This value is multiplied by defined (by the CMS) geographic practice cost indices
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to account for geographic differences in the cost of practice throughout the United States and finally converted to a dollar amount through a conversion factor determined in Congress, which for 2013 was 34.023 (Fig 2) (15,16). The sustainable growth rate (SGR) is a formula used to calculate this conversion factor ultimately to adjust RVUs for the yearly Medicare Physician Fee Schedule. The goal of this formula is to control Medicare reimbursements as they relate to the gross domestic product. Specifically, as the number of services increases over time, the reimbursements are adjusted to control overall expenditures so that the rate of increase in costs per Medicare beneficiary (average payment paid on behalf of a Medicare beneficiary) does not exceed the gross domestic product per capita increase for a given year (17,18). Increasing procedures and costs have resulted in recommendations to decrease physician payments,
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interrupt rate increases multiple times, or both. The prevailing fear is that enacting such decreases would create a barrier to care for Medicare beneficiaries. That is, rather than contend with increasing volumes and decreasing rates, physicians would elect not to treat Medicare patients. For this reason, proposed cuts have accumulated over the years because Congress has elected not to implement them; for 2013, the SGR called for 27%–29% decreases in physician reimbursements (17). As a mechanism for determination of dollar value for service, the RVU has been resilient (1). However, the RVU also was employed in a separate arena to measure, cross-compare, and compensate for physician productivity (19–21). The last of these, compensation, generates a powerful force against cost reduction and represents a landmine for the PPACA because overall expenditures are continually driven up by physicians motivated through RVU-based compensation schedules (14,22,23). The
Figure 1. Cost structure of U.S. health care. (Courtesy of Sayan Chatterjee, Ph.D., Professor of Policy and Management, The Case Western Reserve University Weatherhead School of Management.) (Available in color online at www.jvir.org.)
Figure 2. RVU calculations. The facility/non-facility designation identifies where services are provided. The facility pricing amount generally covers services to inpatients or in a hospital outpatient clinic setting but can include other settings. Off-site hospital-owned sites are also considered as “facilities” in the context of payment. Non-facility services are generally provided in a freestanding physician’s office but can include other freestanding settings. GPCI ¼ geographic practice cost index, MP ¼ malpractice, PE ¼ practice expense, RVU ¼ relative value unit.
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broadly used term for this pay structure is “fee-forservice,” and it represents an entrenched productivity incentive–based pay structure for physicians that is a categorical counterinfluence to the law’s efforts to drive down health care costs (4,7,14,22). As it stands today, Medicare payments for these services have been trending down (or at least not increasing proportionate to increasing costs), creating a culture of physicians under everincreasing pressure to do more to maintain their current salaries. That is, the actual fees in a fee-for-service model are worth relatively less, and so the number of services performed must be increased for a given physician to avoid a salary reduction—or, worse, a workforce reduction (24). This force exists in the midst of a recently passed law that mandates physicians do less (17,18,25), a situation analogous to truck drivers who get paid by the mile having (i) the per-mile pay rate cut and then (ii) a law passed that restricts the number of miles they drive to decrease the overall costs of shipping in the United States. Even more striking, funding earmarked for the research and development arm of the PPACA intended to address the issue of cost control directly through innovation is offset by decreased payments from Medicare to providers (7,11,26). This arrangement is less sustainable than the trend of increasing costs, and multiple avenues are being explored as potential remedies.
REFORM STRATEGIES At the time this article was being written, reimbursement decreases mandated by the SGR formula were delayed through March 2014 as part of the Bipartisan Budget Act of 2013 (27). An agreement has emerged between physicians, politicians, policymakers, and payers that mechanisms other than the SGR are needed to slow spending growth in physician services (28). Specifically, the PPACA creates and supports several federal initiatives to identify alternative payment strategies, such as the Center for Medicare and Medicaid Innovation. Several independent reform strategies have also emerged, centered around the idea of reducing the fragmentation of care commonly experienced by patients in the United States (4,11).
Bundling and Medical Homes One reform strategy, termed “payment bundling,” provides a stated amount to the provider for a given event, such as a hospital admission. This form of payment has its roots in diagnosis-related group payments that have been widely used as payment amounts to cover inpatient stays for patients with a certain diagnosis, such as congestive heart failure. This strategy encourages efficient care because costs over the allotted amount are incurred by the provider, but it is subject to indirect incentivization to providers through either (a) rewarding repeat care episodes for the same problem through multiple
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bundle payments or (b) separate billing for related procedures not included in the bundle (“unbundling”) (28). Another proposed reform strategy has been termed “medical homes” (29–31). This strategy creates a superstructure around patients coordinated by a primary care physician or nurse practitioner. Specifically, these “homes” maintain fee-for-service pay structure with the primary care physician, who receives additional payment for overseeing and organizing networked care for patients. The head of household in this scenario is rewarded further if defined quality outcomes are met, such as decreased emergency department visits for the included patients and declines in readmission rates. Large payers, such as United Health Care, WellPoint, and Blue Cross Blue Shield, have reported savings of 1%–4% under these models, and advanced generation models are under consideration, including testing that aims to reward specialists financially for collaboration, quality, and efficiency (28).
Accountable Care Organizations A potential solution proposed and authorized under the PPACA involves accountable care organizations (ACOs) that aim to internalize the motivation to reduce costs, improve care, and improve population health by engaging the clinicians. An ACO is a proposed integration of health care professionals who would share in the savings generated through implementation of quality care. The decreased number of procedures, admissions, readmissions, or emergency department visits achieved through preventive care and comprehensive management of the patient would result in decreased costs for Medicare, which would be shared with the providers. ACOs comprise a variety of physicians capable of managing a great percentage of any given patient’s needs internally, with direct control over outsourcing. As a result, physicians are motivated to return to patient-centered care, to minimize otherwise unnecessary encounters between patients and health care services through tighter control and monitoring of patient care. For example, previous studies showed that Medicare patients often see Z14 physicians in a given year and fill Z35 prescriptions (4,32), creating overuse and repetitiveness enabled through lack of cross-communication—a situation ameliorated under the ACO. Operating on the premise that an ACO can achieve higher quality and greater cost efficiency through coordination and management of care, the Physician Group Practice demonstration was launched (33–35). The specific goals of the project were to determine if integrated physician practices with adequate resources could generate cost savings by reducing avoidable hospital admissions, readmissions, and emergency department visits and meet detailed quality objectives. If the group held expenditures to assigned beneficiaries, to whom they
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were blinded, for an amount 4 2% of the targeted expenditures and met quality guidelines, they shared the savings with Medicare through a temporally staged split: 70% in the first year, 60% in the second year, and 50% in the third year. The target expenditures were calculated based on year 0 performance and not rebased (Fig 3). Nonparticipant Medicare beneficiaries served as a control population. Of the 10 participants, 5 ultimately shared in Medicare savings over 3 years, and on average 26 of 32 target quality indicators were achieved (33,36). Importantly, no risk was introduced to the model—that is, physicians still received their fee-for-service reimbursement, and there was no penalty if the indicators were not achieved. Significant latitude has been given to the Center for Medicare and Medicaid Innovation and related services to generate improvements and modify ideas to produce service delivery models that decrease cost and preserve or enhance quality (36). Since the signing of the PPACA into law, ACOs have formed in great numbers across the United States (37). Future obstacles to be overcome include (a) risk manifested as upfront investment by ACOs in logistics to accomplish goals, (b) improvements to the risk profile of exchanging tangible fee-for-service for potential future income, (c) additional stringent longitudinal studies to prove the efficacy of specific preventive measures, and (d) addressing the limitation in patient choices when “assigned” to a given ACO (36).
Pay for Performance The pay for performance strategy provides significant financial incentives to hospitals that meet defined value criteria through clinical processes or patient satisfaction. The aim of pay for performance is to equalize access to high-quality care by financially incentivizing physicians and hospitals to meet quality objectives (10,38,39). The system is in place for hospitals now through the CMS and is expected to be implemented for physicians in large groups (Z 100) in 2015 and all physicians by 2017 through a mechanism termed “value-based modifiers” (VBMs). The VBM is budget neutral, meaning that shifts in payments would occur within Medicare provider populations, with the incentive payments being offset by payment reductions to other providers, based on quality and cost-performance indicators (40). Over time, hospitals and physician payments would be affected through VBMs calculated using clinical process and patient experience performance scores, the specific nature of
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which will evolve (an identifiable opportunity for interventional radiologists to be active in these processes—see subsequent discussion) but is expected to include measures related to readmission rates, total per-capita costs, disease-specific efficiency and outcomes, and incremental improvements and is expected to expand influence further based on site of care delivery over time (18,38, 41,42).
OPPORTUNITIES FOR INTERVENTIONAL RADIOLOGY As health care reform evolves, interventional radiologists will face a new emphasis on value—defined as cost savings through desired patient outcomes. At the present time, several opportunities exist for interventional radiology (IR) to contribute to the definition of these variables and to facilitate transition to new models along the three arms of the law (Fig 4). First, the improved access to care initiative through expansion of insurance coverage is expected to result in approximately 30 million more insured potential patients (26,43). Although this increase is likely to result in a positive linear increase in overall need for IR, it also manifests in the context of decreasing reimbursement because of the following: (a) sections of the PPACA included to offset a proportion of the costs associated with its implementation, (b) as part of the current SGR system, and (c) related to a sequestration process mandated in 2011 as part of the debt ceiling raise (7,26,44,45). This combination of factors demands alternative management, beyond the historical RVU/productivity cycle described earlier. Prabhaker et al (46) forecasted this scenario and advised interventional radiologists to reexamine workflow and resource utilization in an effort to control costs. Although this objective may be met through outsourcing, we may gain an advantage going forward by educating ourselves with regard to principles of management, operations, and accounting, a trend that seems to be gaining momentum (47). Experts have suggested that uncoordinated systems impart significant adverse financial impact on the health care costs in the United States (48), and executives are stressing that sustainability is more likely to follow process analytics to control costs than labor force reductions (49). Prabhaker et al (46) also pointed to the critical nature of participation of interventional radiologists in health
Target Expenditure Calculaon. Target Expenditures = PGP Base Year Expenditures x (1+Comparison Group Growth Rate) Medicare Savings Calculaon. Medicare Savings = (Target Expenditures – PGP Performance Year Actual Expenditures) x FTE Assigned Beneficiaries Figure 3. Calculations used to determine ACO savings. FTE ¼ full-time employee, PGP ¼ Physician Group Practice.
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· Process analycs
· External reporng standards
· Educaon
· IR concierge
· Society involvment
· Bridge to policy
· Comprehensive care
· Standardized accounng
·Temporal paent management
· Provider based financing
· Evidence based decision making
· Value based system involvement
Figure 4. Summary of opportunities for interventional radiologists in the context of clinical IR along the three arms of the PPACA.
delivery innovation. At the present time, multiple payment reform pilot studies are underway, both private and government sponsored; however, specialists are often underrepresented (18,28). Interventional radiologists may integrate and contribute to evolving strategies of the Center for Medicare and Medicaid Innovation either directly or through society (Society of Interventional Radiology [SIR], American College of Radiology, Radiological Society of North America) relationships. Additionally, opportunities abound for local participation in developing ACOs or bundled payment pilots that encourage collaboration with specialists—collaboration that would strengthen the subspecialty of IR through integration with inevitable change. For example, for 2014, the CMS released a request for proposals to test a comprehensive end-stage renal disease care model (ESRD Seamless Care Organization) as a pilot ACO; interventional radiologists are an important therapeutic element in the end-stage renal disease process. Other, similar ACOs are materializing around disease processes in which IR is indispensable, such as cancer, and the American Medical Association is coordinating development of a condition-based payment for specialty physicians; these are opportunities for interventional radiologists to be active in health care reform. Quality, suitably positioned in the middle of the three aims, will have an effect in both directions (toward improved patient access and improved fiscal responsibility and attention) and will evolve subject to external and internal forces. From the outside, several objective reporting measures are being implemented. Assuming
that our attention to complications, clinical outcomes, and adverse sequelae is, and has been, our clinical responsibility for some time, the idea of another database to which they must be submitted (eg, the Federal Hospital and Physician Compare websites) is most likely a logistical point. Nevertheless, we must be aware of the existence of these entities and actively survey and check the accuracy of IR data. The physician quality reporting system was originally tied to a 0.5% incentive payment, but over time it is to be converted to a penalty imposed on physicians who do not comply (1.5% in 2015 and 2% thereafter), a process for which SIR has provided infrastructure to its members (17,50). Internally, an intriguing concept in this space for IR is the idea of an ombudsman (36). For IR, there is an opportunity to consolidate diagnostic imaging around procedures. In this setting, the responsibility of the IR ombudsman, or “IR concierge,” would fit nicely to developing consolidated care systems and could potentially serve as the initiation point for a wider responsibility in radiology as that role within coordinated systems is defined. In addition to imaging, it is critical going forward that interventional radiologists efficiently manage cases from before interventions to discharge as a whole, including operations analyses for efficient use of staff and incremental expansion, concise physician communication, and temporal management of patients. Consolidating and optimizing our own processes would then lend itself to expansion and integration to the evolving systems. Restructurings of care delivery are initiating endeavors to focus on consultative services by diagnostic
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subspecialties as well (51). IR has been developing this concept for years, and we are well positioned to thrive in these environments and serve as local and nationwide leaders on this front. Interventional radiologists manifest the expertise needed to define quality outcomes as well. Developing health care reform strategies, specifically ACOs, create voids at points of subspecialty links to savings through efficacious interventions. These “missing links” are often the result of nonspecialist (or even nonphysician) generation of required outcomes (36). There is a market need for experts to help define outcomes that would translate to savings through quality. For example, in the above-mentioned ESRD Seamless Care Organization, it is beneficial not only for IR to participate in the superstructure but also to elucidate recommendations for interventions and containment of care regarding surgical dialysis access management in the angiography suite. Specific examples in this setting include the translation of outpatient procedures; strict infection control programs; evidence-based interventional decision making; and temporal, collaborative management of access to patientcentered cost savings for ACOs. These examples illustrate the bidirectional effect of quality measures on the aims of the PPACA and—importantly—highlight a pathway for interventional radiologists to solidify their roles as clinical caregivers going forward. These interventions benefit the patient and the population, so interventional radiologists are uniquely positioned to bridge the otherwise daunting expanse between clinical efforts and evolving health care policy. The third arm, realigning physician focus with fiscal responsibility, can be addressed by IR specialists through our training programs. As we work to adapt and improve our positions in a dynamic environment, we must train young interventionalists to integrate seamlessly and continue this work. Beyond training program modifications through our emerging dedicated tracks, we may also consider linking these efforts both forward and backward to create financial reconfigurations that attract top-tier students and trainees to IR—that is, to innovate and lead educational finance restructurings that would ease the burden of graduating students and residents to offset potential salary disincentives arising from health care reform (48,52). Understanding the diffusion of costs of equipment going forward can potentially affect our clinical decisions as well. Although the details of this topic are beyond the scope of this article, the general concept is that when a given piece of equipment is used more often, the cost of the associated procedure should decrease (currently it does not) because the fixed costs are spread out over a greater number of uses. A similar phenomenon occurs in the general marketplace as more buyers emerge for a given piece of technology, such as a personal computer. Specific to the PPACA, interest rates for loans on equipment and payments for multiple
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procedures on the same equipment will be modified as the law is implemented (17). Likewise, delivery of care in less costly outpatient arenas ultimately will be necessary as purchasers (payers) scrutinize differential payments for the same procedure in different settings (45). These specific examples of fiscal concerns point toward a larger opportunity for interventional radiologists as well: to understand and integrate with cost structure implementation. The generation of standardized, yet fluid accounting systems implemented through IR represents a new facet to educated decisions about where and when to perform procedures. Similarly, IR groups may benefit from involvement and modification of existing revenue inflow. For example, the insurance market exchanges are expected to have an impact on patient pay patterns resulting in higher out-of-pocket deductible expenses for individuals upfront, creating an opportunity to streamline business through direct, provider-managed financing options. The concept of pay for performance provides opportunities for interventional radiologists to integrate and influence ongoing changes in care. Interventional radiologists may participate in any of the several tiers of hospital-based decision making to influence the processes, patient experience, or other quality variables necessary to obtain savings and incentives at the system level. VBMs will be enacted and actively revised over time through the CMS. Interventional radiologists may incorporate themselves in this ongoing process at several points along the chain: from ground level day-to-day operation modifications necessary to comply to liaison roles from section to department or department to hospital or state to society to policymakers. In conclusion, as with all major large-scale changes, challenges remain for successful health care reform strategies, including logistical, financial, and political constraints—of which the last-mentioned is significant. However, by engaging and incentivizing physicians in the reduction of costs through elimination of waste and improvements in patient care, a powerful, strategically placed workforce is accessed that is uniquely poised to champion historical reform. There are a multitude of opportunities for interventional radiologists to integrate, influence, and thrive during these dynamic times.
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31. Arend J, Tsang-Quinn J, Levine C, Thomas D. The patient-centered medical home: history, components, and review of the evidence. Mt Sinai J Med 2012; 79:433–450. 32. Maxwell S, Zuckerman S. Impact of resource-based practice expenses on the Medicare physician volume. Health Care Financ Rev 2007; 29: 65–79. 33. Kautter J, Pope GC, Trisolini M, Grund S. Medicare physician group practice demonstration design: quality and efficiency pay-forperformance. Health Care Financ Rev 2007; 29:15–29. 34. Haywood TT, Kosel KC. The ACO model—a three-year financial loss? N Engl J Med 2011; 364:e27. 35. Berwick DM. Launching accountable care organizations—the proposed rule for the Medicare Shared Savings Program. N Engl J Med 2011; 364: e32. 36. Berenson RA. Shared Savings Program for accountable care organizations: a bridge to nowhere? Am J Managed Care 2010; 16:721–726 37. Gamble M, Punke H. 100 Accountable Care Organizations to Know. 2013. Available at: http://www.beckershospitalreview.com/lists/100accountable-care-organizations-to-know.html. Accessed February 22, 2014. 38. Blumenthal D, Jena AB. Hospital value-based purchasing. J Hosp Med 2013; 8:271–277. 39. Ryan A, Sutton M, Doran T. Does winning a pay-for-performance bonus improve subsequent quality performance? Evidence from the Hospital Quality Incentive Demonstration. Health Serv Res In press; available online August 1, 2013. 40. Ryan AM, Damberg CL. What can the past of pay-for-performance tell us about the future of value-based purchasing in Medicare? Healthcare 2013; 1:42–49. 41. Manchikanti L, Falco FJ, Benyamin RM, Helm S 2nd, Singh V, Hirsch JA. Value-based interventional pain management: a review of Medicare national and local coverage determination policies. Pain Physician 2013; 16:E145–E180. 42. Centers for Medicaid Services (CMS), HHS. Medicare and Medicaid programs: hospital outpatient prospective payment and ambulatory surgical center payment systems and quality reporting programs; Hospital Value-Based Purchasing Program; organ procurement organizations; quality improvement organizations; Electronic Health Records (EHR) Incentive Program; provider reimbursement determinations and appeals. Final rule with comment period and final rules. Fed Regist 2013; 78(237): 74825–75200. 43. Kantarjian H, Steensma D, Light D. Should oncologists support the Affordable Care Act? Lancet Oncol 2013; 14:1258–1259. 44. Perez K. The impact of the sequester on health care. Healthcare Financ Manage 2013; 67:134, 136. 45. Manchikanti L, Helm Ii S, Singh V, Hirsch JA. Accountable interventional pain management: a collaboration among practitioners, patients, payers, and government. Pain Physician 2013; 16:E635–E670. 46. Prabhakar AM, Harvey HB, Wicky S, Hirsch JA, Thrall JH, Oklu R. What’s brewing: how interventional radiologists can learn from the reinvention of Starbucks. J Am Coll Radiol 2013; 10:559–561. 47. Russo F. MDs seek MBAs as health care gets more complex. Boston Globe 2013 July 21:B1. 48. White J. Cost control after the ACA. Public Adm Rev 2013; 73: S24–S33. 49. Healthleaders Media Council. Cost Containment: Harnessing Data to Drive Revenue Cycle and Productivity. Brentwood, TN: Healthleaders Media; 2013. 50. Meltzer CC. Summary of the Affordable Care Act. AJNR Am J Neuroradiol 2011; 32:1165–1166. 51. Lall N, Jha S, Hawkins CM. Abolishing fee-for-service reimbursement is good for the profession of radiology: a debate from the 2013 AMCLC, Resident and Fellow Section meeting. J Am Coll Radiol 2013; 10: 974–976. 52. Ricketts TC, Fraher EP. Reconfiguring health workforce policy so that education, training, and actual delivery of care are closely connected. Health Aff (Millwood) 2013; 32:1874–1880.
Health Care Reform in the United States: An Opportunity for Interventional Radiologists J. David Prologo, MD, and Carolyn C. Meltzer, MD ABBREVIATIONS ACO = accountable care organization, CMS = Centers for Medicare and Medicaid Services, PPACA = Patient Protection and Affordable Care Act, RVU = relative value unit, SGR = sustainable growth rate, VBM = value-based modifier.
Health care reform is an ongoing reality in the United States. This communication provides a concise description of the context in which this reform has emerged, explains the major provisions being translated through providers as of today, and elucidates potential opportunities in this dynamic environment for interventional radiologists. According to Medicare trustees, the Medicare fund will be bankrupt by 2026 because of soaring health care expenditures (1,2). Expenditures, or “costs,” as referred to in this setting, represent dollars charged for medical care, procedures, and hospital stays, as well as the dollars paid to insurance companies on behalf of patients. Cumulatively, these costs represent 18% of the gross national product, or $2.7 trillion (3). Despite this exorbitant spending, the United States ranks poorly in several important health care outcome metrics, including male and female life expectancies, infant mortality, and obesity, among others (4–6). In 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act (PPACA), a law comprising almost 2,500 pages that outlines provisions to be implemented over 10 years that aim to (a) improve access to health care, (b) improve the quality of patient care, and (c) realign the focus of providers with fiscally responsible behavior. Although these aims are interdependent to a great degree, two major themes emerge from analysis of the law. First, the law expands medical insurance coverage of individuals through health insurance market reform, elimination of preexisting condition restrictions, individual and employer mandates, health From the Division of Interventional Radiology and Image-Guided Medicine (J.D.P.), and Department of Radiology and Imaging Sciences (C.C.M.), Emory University School of Medicine, 1364 Clifton Road, NE Suite D112, Atlanta, GA 30322. Received December 31, 2013; final revision received February 26, 2014; accepted February 27, 2014. Address correspondence to J.D.P.; Email: [email protected] Neither of the authors have identified a conflict of interest. & SIR, 2014 J Vasc Interv Radiol ]]]]; ]:]]]–]]] http://dx.doi.org/10.1016/j.jvir.2014.02.030
insurance exchanges, federal subsidies for the poor, and expanded access to Medicaid. The funding for these changes will result from taxes on health care industry companies, penalties on those who remain uninsured or fail to provide insurance, and provider cuts (7,8). Second, provisions are included over time to improve quality of patient care and to control costs. This latter theme seeks to integrate improved efficiency and cost savings at the provider level in an effort ultimately to decrease spending and to improve further access to care (7,9–11). If one considers the payer - provider - patient chain structure of health care (Fig 1), the idea of decreased costs at the provider level is sound. It would increase retained earnings of the payers, maintaining Medicare as a source of income for providers and allowing private insurers to charge less to patients, which would ultimately improve access from the patient side through lower costs. Mission accomplished? Almost—except for the lurking relative value unit (RVU) saboteur.
SUSTAINABLE GROWTH RATE AND RVUS RVUs were developed as a method of accounting for physicians’ work effort and adopted by Medicare and private insurers as a reliable and reproducible method for setting fee-for-service schedules (12,13). At the present time, the Relative Value Scale Update Committee is a group of specialists who evaluate and determine the appropriateness of RVUs, and their recommendations are adopted by the Centers for Medicare and Medicaid Services (CMS) (14). RVUs are calculated by assigning a numerical value to a service, as determined by the Relative Value Scale Update Committee through consideration of three factors: (i) relative time, skill, training, and intensity required (work RVU); (ii) costs associated with maintaining an overall practice to render such services (practice expense RVU); and (iii) costs associated with liability insurance required to perform the service (malpractice RVU). This value is multiplied by defined (by the CMS) geographic practice cost indices
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to account for geographic differences in the cost of practice throughout the United States and finally converted to a dollar amount through a conversion factor determined in Congress, which for 2013 was 34.023 (Fig 2) (15,16). The sustainable growth rate (SGR) is a formula used to calculate this conversion factor ultimately to adjust RVUs for the yearly Medicare Physician Fee Schedule. The goal of this formula is to control Medicare reimbursements as they relate to the gross domestic product. Specifically, as the number of services increases over time, the reimbursements are adjusted to control overall expenditures so that the rate of increase in costs per Medicare beneficiary (average payment paid on behalf of a Medicare beneficiary) does not exceed the gross domestic product per capita increase for a given year (17,18). Increasing procedures and costs have resulted in recommendations to decrease physician payments,
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interrupt rate increases multiple times, or both. The prevailing fear is that enacting such decreases would create a barrier to care for Medicare beneficiaries. That is, rather than contend with increasing volumes and decreasing rates, physicians would elect not to treat Medicare patients. For this reason, proposed cuts have accumulated over the years because Congress has elected not to implement them; for 2013, the SGR called for 27%–29% decreases in physician reimbursements (17). As a mechanism for determination of dollar value for service, the RVU has been resilient (1). However, the RVU also was employed in a separate arena to measure, cross-compare, and compensate for physician productivity (19–21). The last of these, compensation, generates a powerful force against cost reduction and represents a landmine for the PPACA because overall expenditures are continually driven up by physicians motivated through RVU-based compensation schedules (14,22,23). The
Figure 1. Cost structure of U.S. health care. (Courtesy of Sayan Chatterjee, Ph.D., Professor of Policy and Management, The Case Western Reserve University Weatherhead School of Management.) (Available in color online at www.jvir.org.)
Figure 2. RVU calculations. The facility/non-facility designation identifies where services are provided. The facility pricing amount generally covers services to inpatients or in a hospital outpatient clinic setting but can include other settings. Off-site hospital-owned sites are also considered as “facilities” in the context of payment. Non-facility services are generally provided in a freestanding physician’s office but can include other freestanding settings. GPCI ¼ geographic practice cost index, MP ¼ malpractice, PE ¼ practice expense, RVU ¼ relative value unit.
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broadly used term for this pay structure is “fee-forservice,” and it represents an entrenched productivity incentive–based pay structure for physicians that is a categorical counterinfluence to the law’s efforts to drive down health care costs (4,7,14,22). As it stands today, Medicare payments for these services have been trending down (or at least not increasing proportionate to increasing costs), creating a culture of physicians under everincreasing pressure to do more to maintain their current salaries. That is, the actual fees in a fee-for-service model are worth relatively less, and so the number of services performed must be increased for a given physician to avoid a salary reduction—or, worse, a workforce reduction (24). This force exists in the midst of a recently passed law that mandates physicians do less (17,18,25), a situation analogous to truck drivers who get paid by the mile having (i) the per-mile pay rate cut and then (ii) a law passed that restricts the number of miles they drive to decrease the overall costs of shipping in the United States. Even more striking, funding earmarked for the research and development arm of the PPACA intended to address the issue of cost control directly through innovation is offset by decreased payments from Medicare to providers (7,11,26). This arrangement is less sustainable than the trend of increasing costs, and multiple avenues are being explored as potential remedies.
REFORM STRATEGIES At the time this article was being written, reimbursement decreases mandated by the SGR formula were delayed through March 2014 as part of the Bipartisan Budget Act of 2013 (27). An agreement has emerged between physicians, politicians, policymakers, and payers that mechanisms other than the SGR are needed to slow spending growth in physician services (28). Specifically, the PPACA creates and supports several federal initiatives to identify alternative payment strategies, such as the Center for Medicare and Medicaid Innovation. Several independent reform strategies have also emerged, centered around the idea of reducing the fragmentation of care commonly experienced by patients in the United States (4,11).
Bundling and Medical Homes One reform strategy, termed “payment bundling,” provides a stated amount to the provider for a given event, such as a hospital admission. This form of payment has its roots in diagnosis-related group payments that have been widely used as payment amounts to cover inpatient stays for patients with a certain diagnosis, such as congestive heart failure. This strategy encourages efficient care because costs over the allotted amount are incurred by the provider, but it is subject to indirect incentivization to providers through either (a) rewarding repeat care episodes for the same problem through multiple
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bundle payments or (b) separate billing for related procedures not included in the bundle (“unbundling”) (28). Another proposed reform strategy has been termed “medical homes” (29–31). This strategy creates a superstructure around patients coordinated by a primary care physician or nurse practitioner. Specifically, these “homes” maintain fee-for-service pay structure with the primary care physician, who receives additional payment for overseeing and organizing networked care for patients. The head of household in this scenario is rewarded further if defined quality outcomes are met, such as decreased emergency department visits for the included patients and declines in readmission rates. Large payers, such as United Health Care, WellPoint, and Blue Cross Blue Shield, have reported savings of 1%–4% under these models, and advanced generation models are under consideration, including testing that aims to reward specialists financially for collaboration, quality, and efficiency (28).
Accountable Care Organizations A potential solution proposed and authorized under the PPACA involves accountable care organizations (ACOs) that aim to internalize the motivation to reduce costs, improve care, and improve population health by engaging the clinicians. An ACO is a proposed integration of health care professionals who would share in the savings generated through implementation of quality care. The decreased number of procedures, admissions, readmissions, or emergency department visits achieved through preventive care and comprehensive management of the patient would result in decreased costs for Medicare, which would be shared with the providers. ACOs comprise a variety of physicians capable of managing a great percentage of any given patient’s needs internally, with direct control over outsourcing. As a result, physicians are motivated to return to patient-centered care, to minimize otherwise unnecessary encounters between patients and health care services through tighter control and monitoring of patient care. For example, previous studies showed that Medicare patients often see Z14 physicians in a given year and fill Z35 prescriptions (4,32), creating overuse and repetitiveness enabled through lack of cross-communication—a situation ameliorated under the ACO. Operating on the premise that an ACO can achieve higher quality and greater cost efficiency through coordination and management of care, the Physician Group Practice demonstration was launched (33–35). The specific goals of the project were to determine if integrated physician practices with adequate resources could generate cost savings by reducing avoidable hospital admissions, readmissions, and emergency department visits and meet detailed quality objectives. If the group held expenditures to assigned beneficiaries, to whom they
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were blinded, for an amount 4 2% of the targeted expenditures and met quality guidelines, they shared the savings with Medicare through a temporally staged split: 70% in the first year, 60% in the second year, and 50% in the third year. The target expenditures were calculated based on year 0 performance and not rebased (Fig 3). Nonparticipant Medicare beneficiaries served as a control population. Of the 10 participants, 5 ultimately shared in Medicare savings over 3 years, and on average 26 of 32 target quality indicators were achieved (33,36). Importantly, no risk was introduced to the model—that is, physicians still received their fee-for-service reimbursement, and there was no penalty if the indicators were not achieved. Significant latitude has been given to the Center for Medicare and Medicaid Innovation and related services to generate improvements and modify ideas to produce service delivery models that decrease cost and preserve or enhance quality (36). Since the signing of the PPACA into law, ACOs have formed in great numbers across the United States (37). Future obstacles to be overcome include (a) risk manifested as upfront investment by ACOs in logistics to accomplish goals, (b) improvements to the risk profile of exchanging tangible fee-for-service for potential future income, (c) additional stringent longitudinal studies to prove the efficacy of specific preventive measures, and (d) addressing the limitation in patient choices when “assigned” to a given ACO (36).
Pay for Performance The pay for performance strategy provides significant financial incentives to hospitals that meet defined value criteria through clinical processes or patient satisfaction. The aim of pay for performance is to equalize access to high-quality care by financially incentivizing physicians and hospitals to meet quality objectives (10,38,39). The system is in place for hospitals now through the CMS and is expected to be implemented for physicians in large groups (Z 100) in 2015 and all physicians by 2017 through a mechanism termed “value-based modifiers” (VBMs). The VBM is budget neutral, meaning that shifts in payments would occur within Medicare provider populations, with the incentive payments being offset by payment reductions to other providers, based on quality and cost-performance indicators (40). Over time, hospitals and physician payments would be affected through VBMs calculated using clinical process and patient experience performance scores, the specific nature of
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which will evolve (an identifiable opportunity for interventional radiologists to be active in these processes—see subsequent discussion) but is expected to include measures related to readmission rates, total per-capita costs, disease-specific efficiency and outcomes, and incremental improvements and is expected to expand influence further based on site of care delivery over time (18,38, 41,42).
OPPORTUNITIES FOR INTERVENTIONAL RADIOLOGY As health care reform evolves, interventional radiologists will face a new emphasis on value—defined as cost savings through desired patient outcomes. At the present time, several opportunities exist for interventional radiology (IR) to contribute to the definition of these variables and to facilitate transition to new models along the three arms of the law (Fig 4). First, the improved access to care initiative through expansion of insurance coverage is expected to result in approximately 30 million more insured potential patients (26,43). Although this increase is likely to result in a positive linear increase in overall need for IR, it also manifests in the context of decreasing reimbursement because of the following: (a) sections of the PPACA included to offset a proportion of the costs associated with its implementation, (b) as part of the current SGR system, and (c) related to a sequestration process mandated in 2011 as part of the debt ceiling raise (7,26,44,45). This combination of factors demands alternative management, beyond the historical RVU/productivity cycle described earlier. Prabhaker et al (46) forecasted this scenario and advised interventional radiologists to reexamine workflow and resource utilization in an effort to control costs. Although this objective may be met through outsourcing, we may gain an advantage going forward by educating ourselves with regard to principles of management, operations, and accounting, a trend that seems to be gaining momentum (47). Experts have suggested that uncoordinated systems impart significant adverse financial impact on the health care costs in the United States (48), and executives are stressing that sustainability is more likely to follow process analytics to control costs than labor force reductions (49). Prabhaker et al (46) also pointed to the critical nature of participation of interventional radiologists in health
Target Expenditure Calculaon. Target Expenditures = PGP Base Year Expenditures x (1+Comparison Group Growth Rate) Medicare Savings Calculaon. Medicare Savings = (Target Expenditures – PGP Performance Year Actual Expenditures) x FTE Assigned Beneficiaries Figure 3. Calculations used to determine ACO savings. FTE ¼ full-time employee, PGP ¼ Physician Group Practice.
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· Process analycs
· External reporng standards
· Educaon
· IR concierge
· Society involvment
· Bridge to policy
· Comprehensive care
· Standardized accounng
·Temporal paent management
· Provider based financing
· Evidence based decision making
· Value based system involvement
Figure 4. Summary of opportunities for interventional radiologists in the context of clinical IR along the three arms of the PPACA.
delivery innovation. At the present time, multiple payment reform pilot studies are underway, both private and government sponsored; however, specialists are often underrepresented (18,28). Interventional radiologists may integrate and contribute to evolving strategies of the Center for Medicare and Medicaid Innovation either directly or through society (Society of Interventional Radiology [SIR], American College of Radiology, Radiological Society of North America) relationships. Additionally, opportunities abound for local participation in developing ACOs or bundled payment pilots that encourage collaboration with specialists—collaboration that would strengthen the subspecialty of IR through integration with inevitable change. For example, for 2014, the CMS released a request for proposals to test a comprehensive end-stage renal disease care model (ESRD Seamless Care Organization) as a pilot ACO; interventional radiologists are an important therapeutic element in the end-stage renal disease process. Other, similar ACOs are materializing around disease processes in which IR is indispensable, such as cancer, and the American Medical Association is coordinating development of a condition-based payment for specialty physicians; these are opportunities for interventional radiologists to be active in health care reform. Quality, suitably positioned in the middle of the three aims, will have an effect in both directions (toward improved patient access and improved fiscal responsibility and attention) and will evolve subject to external and internal forces. From the outside, several objective reporting measures are being implemented. Assuming
that our attention to complications, clinical outcomes, and adverse sequelae is, and has been, our clinical responsibility for some time, the idea of another database to which they must be submitted (eg, the Federal Hospital and Physician Compare websites) is most likely a logistical point. Nevertheless, we must be aware of the existence of these entities and actively survey and check the accuracy of IR data. The physician quality reporting system was originally tied to a 0.5% incentive payment, but over time it is to be converted to a penalty imposed on physicians who do not comply (1.5% in 2015 and 2% thereafter), a process for which SIR has provided infrastructure to its members (17,50). Internally, an intriguing concept in this space for IR is the idea of an ombudsman (36). For IR, there is an opportunity to consolidate diagnostic imaging around procedures. In this setting, the responsibility of the IR ombudsman, or “IR concierge,” would fit nicely to developing consolidated care systems and could potentially serve as the initiation point for a wider responsibility in radiology as that role within coordinated systems is defined. In addition to imaging, it is critical going forward that interventional radiologists efficiently manage cases from before interventions to discharge as a whole, including operations analyses for efficient use of staff and incremental expansion, concise physician communication, and temporal management of patients. Consolidating and optimizing our own processes would then lend itself to expansion and integration to the evolving systems. Restructurings of care delivery are initiating endeavors to focus on consultative services by diagnostic
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subspecialties as well (51). IR has been developing this concept for years, and we are well positioned to thrive in these environments and serve as local and nationwide leaders on this front. Interventional radiologists manifest the expertise needed to define quality outcomes as well. Developing health care reform strategies, specifically ACOs, create voids at points of subspecialty links to savings through efficacious interventions. These “missing links” are often the result of nonspecialist (or even nonphysician) generation of required outcomes (36). There is a market need for experts to help define outcomes that would translate to savings through quality. For example, in the above-mentioned ESRD Seamless Care Organization, it is beneficial not only for IR to participate in the superstructure but also to elucidate recommendations for interventions and containment of care regarding surgical dialysis access management in the angiography suite. Specific examples in this setting include the translation of outpatient procedures; strict infection control programs; evidence-based interventional decision making; and temporal, collaborative management of access to patientcentered cost savings for ACOs. These examples illustrate the bidirectional effect of quality measures on the aims of the PPACA and—importantly—highlight a pathway for interventional radiologists to solidify their roles as clinical caregivers going forward. These interventions benefit the patient and the population, so interventional radiologists are uniquely positioned to bridge the otherwise daunting expanse between clinical efforts and evolving health care policy. The third arm, realigning physician focus with fiscal responsibility, can be addressed by IR specialists through our training programs. As we work to adapt and improve our positions in a dynamic environment, we must train young interventionalists to integrate seamlessly and continue this work. Beyond training program modifications through our emerging dedicated tracks, we may also consider linking these efforts both forward and backward to create financial reconfigurations that attract top-tier students and trainees to IR—that is, to innovate and lead educational finance restructurings that would ease the burden of graduating students and residents to offset potential salary disincentives arising from health care reform (48,52). Understanding the diffusion of costs of equipment going forward can potentially affect our clinical decisions as well. Although the details of this topic are beyond the scope of this article, the general concept is that when a given piece of equipment is used more often, the cost of the associated procedure should decrease (currently it does not) because the fixed costs are spread out over a greater number of uses. A similar phenomenon occurs in the general marketplace as more buyers emerge for a given piece of technology, such as a personal computer. Specific to the PPACA, interest rates for loans on equipment and payments for multiple
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procedures on the same equipment will be modified as the law is implemented (17). Likewise, delivery of care in less costly outpatient arenas ultimately will be necessary as purchasers (payers) scrutinize differential payments for the same procedure in different settings (45). These specific examples of fiscal concerns point toward a larger opportunity for interventional radiologists as well: to understand and integrate with cost structure implementation. The generation of standardized, yet fluid accounting systems implemented through IR represents a new facet to educated decisions about where and when to perform procedures. Similarly, IR groups may benefit from involvement and modification of existing revenue inflow. For example, the insurance market exchanges are expected to have an impact on patient pay patterns resulting in higher out-of-pocket deductible expenses for individuals upfront, creating an opportunity to streamline business through direct, provider-managed financing options. The concept of pay for performance provides opportunities for interventional radiologists to integrate and influence ongoing changes in care. Interventional radiologists may participate in any of the several tiers of hospital-based decision making to influence the processes, patient experience, or other quality variables necessary to obtain savings and incentives at the system level. VBMs will be enacted and actively revised over time through the CMS. Interventional radiologists may incorporate themselves in this ongoing process at several points along the chain: from ground level day-to-day operation modifications necessary to comply to liaison roles from section to department or department to hospital or state to society to policymakers. In conclusion, as with all major large-scale changes, challenges remain for successful health care reform strategies, including logistical, financial, and political constraints—of which the last-mentioned is significant. However, by engaging and incentivizing physicians in the reduction of costs through elimination of waste and improvements in patient care, a powerful, strategically placed workforce is accessed that is uniquely poised to champion historical reform. There are a multitude of opportunities for interventional radiologists to integrate, influence, and thrive during these dynamic times.
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