Berwick: Examples of healthcare improvements are emerging
The Centers for Medicare and Medicaid Services is under pressure to establish the components of the health reform law and demonstrate quality and cost improvements, even as some lawmakers call for cuts to Medicare and other health programs in a difficult economy.
Cases of healthcare improvements are beginning to emerge, said Dr. Don Berwick, CMS administrator.
CMS believes that improving health care will decrease costs and make it more sustainable, similar to the strategy that almost every other industrial sector has followed. Consumers have come to expect that as manufacturers significantly boosted the functionality of their computers and laptops that prices drop dramatically, he noted.
"That relationship to getting better and getting less expensive is true with health care. It is within our grasp. You can see piece by piece, case by case, examples of that playing out," Berwick said at a Sept. 8 briefing sponsored by Health Affairs to highlight the journal's September issue on "The New Urgency to Lower Costs."
The methods that will improve health care and reduce costs are difficult to explain to consumers and providers than the process of simply cutting funds in a politically polarized environment.
Berwick said he has started to view needed changes as wedges, or groups of opportunities, for improvements in health care that step by step over time will decrease costs.
Examples of some of the categories include overtreatment, failure to coordinate care, gaps in care delivery because best practices are not followed, pricing that is not responsive, administrative procedures that add unnecessary burden to care and fraud and abuse.
"We need to have an orderly and systematic way to think about how to improve care. As we begin to think about where the improvements lie that we really can work on that makes care better for patients, we'll be able to focus our energies even better than we are now," Berwick said.
For instance, the Partnership for Patients provides for $1 billion aimed at making health care safer with a goal of reducing hospital-acquired conditions and infections by 40 percent and hospital re-admissions by 20 percent by 2013.
Another is the value of coordinating care, on which accountable care organizations and bundled payments will depend.
Bundled payments offer the promise of incentives to coordinate care across settings, reduce re-admission rates and save costs to Medicare. At the same time, "bundled payment may pose greater financial risks for providers and limitations on choices for post-acute care," said Neeraj Sood, director of international programs at the University of Southern California's Schaeffer Center for Health Policy and Economics.
Healthcare providers that want to participate in Medicare's bundled payments pilot in January should evaluate the conditions they choose to include and the length of a patient's episode of care in order to demonstrate whether they improved care and reduced costs.
In one of the highlighted studies, Sood said joint replacement and hip fracture were strong candidates for the pilot. Both show potential for significant savings because costs can vary widely – between $5,000 and $10,000 depending on the provider – and offer lower financial risk compared with more serious conditions, such as strokes. Timing patient episodes to last about 60 days captures most of the costs of a condition until a patient stabilizes, he said.
