Oct. 4, 2015
The paper I'm referring to is by Jonathan Oberlander, an expert who teaches a the U of NC, and Miriam Laugeson, who teaches at Columbia. Oberlander is a prolific and highly respected writer. I don't know anything about Laugeson. The title of their paper is "Leap of faith -- Medicare's new physician payment system." http://www.nejm.org/doi/full/
Oberlander and Lauger essentially say two things: Other countries spend a lot less than we do on health care even though they rely on the fee-for-service method of payment and do not rely on ACOs etc; there is no evidence to support CMS's claims for ACOs, "medical homes," and similar entities designed to shift insurance risk onto clinics and hospitals. Congress and CMS have only faith in the rightness of their opinions.
The other document I want to call your attention to is a letter to the editor of NEJM that I co-authored with Ted Marmor, the professor at Yale who invited me to speak with him at the Yale conference on Medicare and Medicaid last November. The NEJM asst editor I'm dealing with told me recently this letter will appear in the Oct 15 edition of NEJM.
The letter is very short (you only get 175 words). It criticizes the authors of a paper published in the June 18, 2015 edition of NEJM by David Blumenthal, currently the head of the Commonwealth Fund and formerly a member of the Obama administration, and two colleagues. This paper appeared in the June 18 NEJM. It purported to assess the progress of the ACA five years after its enactment.http://www.nejm.org/
They claimed that one of CMS's ACO programs (the Medicare Shared Savings Program (MSSP)) cut Medicare costs and one of CMS's three "home" programs cut Medicare costs. Neither statement was true. And here's the crazy thing: The two studies Blumenthal et al. cited proved them wrong. I don't know what to call the error Blumenthal et al made. How do you make a false statement and then cite a paper that demonstrates you made a false statement? Was it a lie? Was it laziness? Was it seeing the world through hallucinations induced by HMO Kool-Aid?
Here's what happened. The two papers Blumenthal et al relied on highlighted the reduced claims costs Medicare enjoyed as a result of the MSSP and "home" programs, but downplayed the cost of the bonuses CMS paid out to ACOs and "homes" that succeeded in cutting Medicare's claims costs. The latter costs were right there in the reports for anyone to see who didn't rely on CMS's press releases about the reports. Unfortunately for Blumenthal and all ACO and home buffs, the cost of the bonuses CMS paid out were HIGHER than the reductions in claims costs, for a net increase in costs to CMS of both programs.
What you should find especially troubling about Blumenthal et al's mistake is that they chose what they thought was the best research proving their point that ACOs and homes save money. They didn't have the space to do a literature review, so they cited what they thought were two of the most credible and up to date reports. But they got both reports wrong. The reports disproved their thesis.
So, if someone as smart as Blumenthal et al. couldn't find any literature to support their claims, what are the odds that DHS staff are going to find anything supporting their obsession with "value based purchasing" and ACOs?
Letters to NEJM rarely have replies. NEJM hasn't told me Blumenthal et al. were given a chance to reply and did or did not write a response. I don't know how you respond to our letter other than to say, "Thank you for catching our error."
I did give Blumenthal two chances to explain his behavior to me before I approached Ted about writing NEJM. I sent him and his Commonwealth Fund colleague Stu Guterman the email below. Guterman replied but dodged the question I directed at Blumenthal as to why he misrepresented the papers he cited. I replied to both men again and noted Guterman had dodged my question to Blumenthal. Neither man answered.
Ted and I then wrote the editor at NEJM who managed the article by Blumenthal et al. and politely demanded she print a correction, with or without Blumenthal's permission. She replied she would allow us to write a letter to the editor even though the three-week deadline for letters (they have to arrive at NEJM within three weeks of the publication of the article being criticized). So that's what we did.
So what is the probability that anyone at DHS can produce evidence for ACOs and "value based purchasing" that Blumenthal et al. couldn't think of? Answer: Zero.
From: kiprs [mailto:email@example.com]
Sent: Friday, June 26, 2015 8:04 AM
To: Stuart Guterman; David Blumenthal
Subject: Two questions about ACO research
Dear Mr. Guterman and Dr. Blumenthal,
I'm writing you to call your attention to a defect in the ACO model, and to an inexplicable tendency among health policy analysts to report the gross savings allegedly achieved by ACOs rather than the net savings. I urge you and other Commonwealth Fund officers and staff to use your influence to correct these problems.
I have pasted in below two comments I posted recently on the blog of Physicians for a National Health Program on these issues.
The first comment opens with a statement you made, Mr. Guterman, to Modern Healthcare about how difficult it is to make sense of the findings reported by L&M Policy Research, and by Nyweide et al. in their paper in JAMA based on the L&M report, on the first two years of the Medicare Pioneer ACO program. If Modern Healthcare had called and asked for a comment about the final evaluation of the five-year Physician Group Practice Demonstration (an earlier test of the ACO concept), you would have been forced to make the same comment -- it's hard to know who did what to whom to save the grand total of three-tenths of a percent that the PGP demo saved Medicare (net of CMS's bonus payments).
Can we agree that financing ACO experiments that tell us almost nothing about why ACOs saved or lost money is not a good use of taxpayer dollars? If so, I urge you to use your influence to induce ACO proponents (starting perhaps with your own board and Medpac) to demand that CMS and private promoters of ACOs define the mechanisms ACOs are supposed to use precisely enough to test them -- to operationalize them. That's not possible now given the extraordinarily vague, aspirational definition of "ACO."
The second comment I'm sending along addresses CMS's habit of reporting gross savings to Medicare and either ignoring the cost to CMS of its bonus payments to ACOs, the administrative costs associated with running the ACO programs, and the cost to ACOs of hiring the extra staff and buying equipment necessary to start and maintain an ACO, or burying them in a separate document. (The second comment also addresses another but less common problem -- simulating ACOs and reporting the results as if they were for a real program. If you care to comment on that issue, please do, but I'm more interested in the two issues I've described above.)
Dr. Blumenthal, your comment about the L&M/Nyweide et al. reports in your paper for NEJM, "The Affordable Care Act at 5 Years," illustrates the second problem -- the habit among analysts of repeating CMS's gross savings estimates and not calling readers' attention to the fact that the figures don't take account of CMS's costs, including the bonus payments they make to ACOs. In your NEJM paper, you cited CMS's claim that Pioneer ACOs have cut Medicare's costs by $385 million, but you neglected to tell readers that number was a gross number, not a net. According to a May report put out by CMS, the Pioneer program saved only two-tenths of a percent in 2012 and five-tenths in 2013 when CMS payments are taken into account (see page four here http://www.cms.gov/Research-
Similarly, CMS says the MSSP ACOs have RAISED Medicare costs (see the same document above), but you claimed in your NEJM paper savings of $700 million (with no citation).
I'd appreciate hearing any comments you have in response to this email, especially if you feel inclined to support the health policy community's current policy of defining ACOs so vaguely they can't be tested, and CMS's and the health policy community's emerging habit of pretending there are no costs to administering the ACO programs and, therefore, all savings are pure gravy.