Outcomes Based Medical Care

Staff Report

During an interview with Jeremy Al Lazarus, MD, AMA president, by Leslie Kane, MA at the October 2012 MGMA meeting in San Antonio, TX, Dr. Lazarus talked about many issues affecting physicians these days.

Regarding future sustainable growth rates, Dr. Lazarus pointed out that it can affect patients as well, citing the difficulty almost 25% of seniors have finding doctors who accept Medicare at all or who limit the overall number of Medicare patients they accept. This has not happened suddenly, but is appears to be a gradual change over time.

He thought a possible replacement measurement for sustainable growth rates could be provider payments that encourage better care outcomes at decreased costs; one possibility is paying an outcome based fee. For example a fee can be based on coordination of care that leads to improved outcomes. Dr. Lazarus reported that the AMA delivered its recommendations to the US Senate with basic principles that could form the basis for changes from sustainable growth rates to improved outcome of care measurements, based on practice size and overall population served.

AMA is working with various sized practices to determine sources of fulfillment and satisfaction for physicians. They are looking at, among other things, practice infrastructure, team training, or physician ages in order to develop suggestions to their membership to model their incentive programs.

In late 2012, Nikhil Sahni and Robert Kocher wrote about “Creating Outcome-Driven Health Care Markets”. Nikhil Sahni is a health care analyst working on policy implications and Robert Kocher is a partner at Venrock and focuses on healthcare IT and services investments. They state that “Patients with Chronic Disease” is a category that would work well for outcomes based fees. They say that for chronic disease patients, the main goal is to improve outcomes to “minimize a condition’s short-term inconveniences and long-term complications”. For providers, there should be incentives to create a long-term focus on patient engagement, adherence, and side-effect prevention. A provider system should be able to care for all aspects of a patient’s chronic condition. Patients seeking this level of care provide the incentives for doctors, other medical providers and pharmaceuticals to manage cost, deliver annual health and avoid complications at lower costs.

Sahni and Kocher suggest that, with this model, incentives work best when providers are paid using a risk-adjusted, capitated payments. To be competitive, the providers can enter into organizations such as Patient-Centered Medical Homes, multi-specialty groups, ACOs or other integrated delivery systems. These organizations must have the capabilities to manage risks as well as population-based health and medical costs. With this approach, patients are more involved and are reinforced to adhere to their treatment plans and remain under care.