ANALYSIS | What Does It Take To Stop Repeating A Bad Idea?
by Ellen Andrews | Apr 24, 2018 11:15am
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Posted to: Analysis, Consumer Protection, Health Care, Mental Health Care, Insurance, Nonprofits, Public Health, Poverty, State Budget
Albert Einstein believed the definition of insanity is doing the same thing over and over but expecting a different result. Unfortunately, Connecticut policymakers haven’t learned this lesson.
Provider financial risk is a bad idea that has failed both in our state and nationally. Despite this, our ironically-named State Innovation Model (SIM) office is trying again to force it on Connecticut’s struggling health system. Their new twist on the bad idea, to impose it on primary preventive care, is even more dangerous.
Provider risk is a very simplistic idea meant to solve the very complex problem of rising healthcare costs. Provider risk models give large health systems incentives to lower the costs of care their patients receive. Health systems could save by preventing problems and keeping us out of more expensive care, or they could deny people necessary care, as happened in the 1990s with managed care insurers. Since we abandoned that bad model six years ago, our state’s Medicaid program has saved hundreds of millions of dollars every year, the best cost-control record in the nation, while substantially improving quality and access to care.
Poorly designed incentive schemes are notorious for backfiring. Chasing profits lost to Japanese imports in the 1970s, Ford executives ignored warnings about the Pinto, pressing ahead with a dangerous gas tank design, and people died. Enron’s ambitious revenue goals, and their auditors paid to look the other way, precipitated the largest bankruptcy in American history in 2001. But not all humans are motivated by money.
In one study, paying women to donate blood actually decreased participation from 53 percent to 30 percent. The drop was reversed if they could donate the money to charity. Highly trained doctors don’t go to medical school to get rich or deny patients needed care; they want to heal people.
Shared savings, the current version of this bad idea, doesn’t even lower costs. Large health systems under shared savings have actually increased spending, both in CT and across the nation. But rather than learning from these failed experiments, supporters are doubling down to propose increasing the level of coercion on providers. It’s unclear where the escalation will stop as pressure tactics continue to fail.
There is a better way, and we know what works.
There are plenty of evidence-based policy options to improve care and control costs. Great options include eliminating payment disparities between primary and specialty care, paying directly for promising innovations such as Community Health Workers and targeted professional care management for high-risk/high-need patients, promoting the use of high-value care matched to patients’ needs and health problems, using sophisticated analytics to identify gaps and target scarce resources, engaging public health professionals to help us all make better health decisions, medication education and management, and smarter quality incentives, such as avoiding preventable hospitalizations and ER visits, for things that both improve health and lower costs.
If the state would leave out the middlemen at large health systems, taxpayers could get all the savings. Michigan has saved millions by directly supporting common-sense options. Instead, SIM would have us apply financial pressure on health systems and hope for the best.
SIM’s latest iteration of their failed idea is to capitate primary care practices, an even worse idea.
Under this proposal, primary care providers would get a set amount of money for each patient, regardless of whether costs go up or down. Primary care providers are paid less than specialists, face very tight margins, and are in short supply. As the first line of care, primary care is the worst place to impose incentives to deny services. Primary care providers have neither the time nor the extra funds to do this right. Independent advocates and the legislative Co-Chairs of Connecticut’s Medicaid oversight council have raised serious concerns. Tightening the screws on overworked primary care providers is a stunningly bad idea.
Let’s stop putting lipstick on a pig by repeating failed experiments. We should start over with evidence-based solutions that are working here and in other states. Connecticut’s health system needs real innovation.
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