Anyone who is not aware that Medicare is looking to save money on healthcare has been living in solitary confinement for the last several years. Healthcare costs continue to rise over the level of inflation and now consume 17% of GDP. However, for all that money, we still rank in the middle of industrialized nations for quality of care. Fifty million Americans have no insurance, a situation that has been proven to make people live sicker and die younger.
Over the past decade, multiple demonstration projects have been authorized by the the Centers for Medicare and Medicaid Services (CMS) to try to improve quality and save money. According to the Congressional Budget Office, the only demonstration project that saved money after expenses saved $7 per beneficiary.
My theory is that private practices can be the most efficient, cost-effective, and patient-centered sites of service. Good practices are designed around the patient. Recent challenges, such as Sustainable Growth Rate (SGR)-induced payment freezes, loss of the drug margin, and the private payer squeeze, have forced us to be very efficient. A service provided by a hospital-based physician costs the system 1.5 times more than when a self-employed physician provides that same service.
So for me it was no surprise that models based on hospital-employed physicians did not save money. The doctors employed by hospitals are just as good, and just as committed to their patients as private practice doctors are, but they are handicapped by the inefficiencies of hospital bureaucracy. Hospital-employed physicians are encouraged to use hospital-employed hospitalists and the hospital’s emergency department (ED) and imaging. It is also much easier to send someone to the ED to be admitted by a hospitalist at 2 am, especially when you remember that half of oncologists are over 50.
However, emergency medicine physicians take one look at our patients and assume they need to be hospitalized. Concerned that any event that brought the patient to the ED is cancer-related, patients are often thoroughly restaged. Never mind that the oncologist doesn’t need that imaging. Once admitted by hospitalists, especially those newly out of training as internists, more imaging is ordered and more interventions occur. New residents are trained to address every problem on the list, and because that training occurs in hospitals, they do not understand that hospitals are expensive, dangerous facilities that should be used only when no other site of service will suffice. They have very little idea of the amount of care that community oncologists can deliver in the practice setting.
Most payers, including CMS, assume that the best way to save money in oncology is by restricting use of our very expensive drugs. People are making fortunes selling pathways and pharmacy benefit managing plans to payers. However, the drugs are the tools we must use, and once you have convinced the few oncologists who are not following National Comprehensive Cancer Network (NCCN) guidelines to do so, there are no more savings to be gained by this approach.
The Come Home project will demonstrate that community oncology practices can aggressively manage the symptoms and complications of cancer and its treatment—and at the same time can save money by limiting the use of expensive sites of service like hospitals and EDs.
I have good evidence from years of data in my practice that our policies and procedures can save Medicare many millions of dollars. When the Center for Medicare and Medicaid Innovation offered grant funding to anyone with an idea of how to give better care, keep people healthier, and save money at the same time, I decided to apply. I created a company, Innovative Oncology Business Solutions (IOBS), for the purpose of transforming the ideas I had implemented in my practice into processes that could be replicated in other practices across the country. The project is called “Come Home” (community oncology medical home). New Mexico Cancer Center’s data were sent to CMS as part of the grant application, and they were impressed enough to grant IOBS $19.8 million to see if the processes are generalizable. We must now show that the seven practices involved in the project can save CMS $34 million by aggressively managing the side effects of cancer and its treatment.
Each practice will receive funding to support the implementation of triage pathways and to become a medical home. Triage pathways have been developed based on work with our local prehospital emergency medical services, which have perfected a system that trains nonmedical personnel to get the right personnel and equipment to the right place at the right rate of speed over 99.9% of the time.
The project practices will use the grant funding to provide the support services needed for a medical home, including same-day visits and management of cancer complications in the office. We will create pathways for diagnosis and treatment, and measure the quality of our care. We will be able to measure patient outcomes.
Patients prefer not to be admitted to the hospital or sit for hours in an ED if another safe option is available. Also, preventing side effects and complications is better healthcare and better health. Demonstrating this advantage will also be a major marketing advantage for the practices.
The grant is funding software development to allow aggressive monitoring of how well the physicians in each practice are doing at managing their patients. The software will allow the lead physician at each practice to review and discuss with colleagues compliance rates with pathways; it will also measure the expenses of the care. IOBS will collect the data on quality and cost from all participating practices, sorted by disease, stage, comorbid conditions, and therapy.
The Center for Medicare and Medicaid Innovation (CMMI) will provide claims data from CMS for two control groups. Each practice will have a local control group, to minimize the effect of geographic differences, and we will use an NCCN hospital as the national control. The difference between the costs of care for patients at the sites of service will reflect the savings.
An important by-product of the Come Home project and the software we develop will be the ability to operationalize a bundled payment system. As we collect the data on resources used by cancer patients, we will learn the methods of saving money by patient management, and the costs to the practices of developing and perfecting the necessary management infrastructure. IOBS will have the ability at the conclusion of the grant to help other practices become medical homes and implement bundled payments successfully.
Practices will then be in a position to negotiate with payers improved rates to share the savings our work generates. I suspect payers will be pleased to support practices that improve health, improve healthcare, and also save money.
Disclaimer: The project described was supported by Funding Opportunity Number CMS-1C1-12-0001 from Centers for Medicare and Medicaid Services (CMS), Center for Medicare and Medicaid Innovation (CMMI). The concepts in this article are the author’s own, and do not reflect the opinions of CMS or CMMI.