State physicians’ group leading the way on ‘bundled payments’

WASHINGTON–Dr. Courtland Lewis has been fielding a lot of anxiety-filled queries lately–not from his patients, but from other doctors. The Hartford-based orthopedic surgeon is suddenly one of the state’s go-to experts on federal efforts to revamp how doctors and hospitals are paid for the care they provide.

That’s because Lewis and the knee-and-hip replacement surgeons he works with have forged an unusually close partnership with each other and with their hospital, Saint Francis in Hartford: They share financial data, they analyze complication and readmission rates together, and they’ve even started billing collectively, at least for a handful of targeted patients.

His practice has worked to put in a place a system, albeit on a very small scale, that works collaboratively across institutions and across disciplines. They’re trying to treat-and charge-certain patients for an entire health care episode, instead of billing them separately for each appointment, test, or procedure.

“His practice is working on a project on their own… that looks down the road and sees this is coming,” said Audrey Honig Geragosian, a spokeswoman for the Connecticut State Medical Society.

Last month, in fact the federal Centers for Medicare & Medicaid Services announced a pilot program that seeks to revamp how health care providers are reimbursed for treating Medicare patients. The goal is to get doctors, hospitals, pharmacists and other care givers to agree on how much it costs to treat a patient from start to finish, whether for a heart bypass operation, cataract surgery, or pneumonia.

The current system, critics say, is based more on how much a doctor or hospital does to treat patients, not how well they do it. Right now, providers are paid on a fee-for-service basis–reimbursed for each appointment or other service they deliver. That’s led to an expensive and disjoined system, with little coordination between primary doctors and specialists, office-based physicians and hospitals, pharmacists and home-care workers.

Under CMS’s pilot program, known as the Bundled Payments Initiative, Medicare would dole out one bundled payment to a group of providers for an entire episode of care.

“When this initiative came out, emails were coming in from my professional society, the state medical society–all over the place,” Lewis said. His fellow doctors had a range of questions, but there was one overarching theme.

“There’s a lot of concern on the part of the doctors that this push to realign payments will be driven by hospitals, and that doctors will end up on the short end,” Lewis said.

His experience, though limited, suggests otherwise. But it also suggests that the shift to a new payment landscape will not be easy.

“It’s a fundamentally different way of paying for care than we have had for a long, long time–basically since insurance started in the 50s,” Lewis noted.

Lewis and his colleagues at the Connecticut Joint Replacement Institute started their initiative in January, as a way to help their most cost-conscious patients, those who either have no insurance or insurance that would not to cover a hip or knee replacement procedure.

“It’s designed ultimately… to provide care for people who couldn’t otherwise get it,” he said. They developed a fixed-price surgery–a package, for example, that included all the charges for a knee-replacement operation from the hospital, the surgeon, the anesthesiologist, and others involved in the procedure.

It required the doctors to work extremely closely with each other and with St. Francis.

“It has allowed us to share financial data and utilization data,” Lewis said. “We have a very good idea of how often our patients get complications and how often they need to be readmitted to the hospital,” a major extra expense.

By working more collaboratively, he said, “it allows us to know exactly what our costs of doing care are. It forces us to have a very good idea of exactly how often particular complications occur and in what patients they occur.”

But it’s also entails risks. Because they bill for an entire swath of care, they are on the hook for unpredictable outcomes. When there are complications, he said, “then the doctors have to eat that financially…. We’re at risk for the cost of [a patient’s hospital] readmission.”

So far, Lewis and his colleagues have only used this system to treat a half-dozen or so patients. But they’re working to expand the program, and it’s put them on the cutting edge, at least in Connecticut.

Some other states have more integrated health systems, notably the Mayo Clinic in Minnesota and Geisinger Medical Center in Pennsylvania. But the majority of Connecticut physicians work in small or even solo practices, with only loose ties to other providers and hospitals.

The new federal focus, envisioned in the health reform law, lends itself to “larger health care systems that are integrated,” said Matthew C. Katz, executive vice president of the Connecticut State Medical Society. “But bigger is not always better.”

Katz and others have expressed deep concern about the CMS pilot program and similar initiatives aimed at pushing health care providers toward bundled care. Katz said Connecticut doctors are eager to experiment with new payment models, but not at the expense of being forced to abandon their independent practices and be usurped by large provider networks or major hospitals.

Lewis said he fully understands those concerns–and has heard them repeatedly from fellow physicians in the weeks since CMS launched its Bundled Payment Initiative.

“Historically, doctors and hospitals are not always on the exact same page, and from the comments that have come out from physicians in the state of Connecticut and around the country… there’s a lot of fear and anxiety that the playing field is not always level,” he said. “The hospitals are big and they have a lot of resources. Everybody else is going, ‘This is a horrible thing… They’re going to take advantage of the doctors’.”

But, he added, “I think that misses the point–that we have to be looking for opportunities for coordinating care and decreasing the risk of complications and readmissions.”

Of his own experience, he said, “this is a work in progress… I don’t want to give you the impression that we’ve been able to prove the theory, that we’ve improved quality and decreased costs,” he said.

And getting it started wasn’t easy. One of the first tasks, he said, was getting the dozen or so orthopedic surgeons to sit down together and all agree on a basic set of treatment guidelines.

“If you have 12 different doctors and they order 12 different kinds of implants, 12 different medicines, and 12 different types of physical therapy, then figuring out what caused a particular complication is somewhat is impossible,” Lewis said.

They didn’t set any rigid standards, he said, but “we’ve come pretty far in getting the doctors and nurses and anesthesiologists to a pretty high level of consistency in how we’re treating patients.”

For example, he said, doctors in the group aren’t being forced to use an implant they’re not comfortable with. “But we’ve agreed we’re not going to use 24 different implants–we’ll use 2 or 3,” Lewis said. “And that’s allowed us to save money in contracting with vendors.”

Even while there’s been some savings, he said, there’s been additional expenses. He said they’ve spent an extra $500,000, for example, just to track patients more carefully, to help them figure out when and why complications arise.

The biggest benefit hasn’t necessarily been reduced expenses or better outcomes-at least not yet. It’s been in a more sensible system, he said.

“As you can imagine… the thrust here is to create a mutual sense of responsibility and accountability,” Lewis said, so that when complications arise, there’s less after-the-fact finger-pointing.

“Everybody better be talking to everybody else,” he said. “How can you argue with that? How can you argue with a system that has a very strong incentive to make you work really hard together to absolutely minimize how often complications occur?”

Even on such a small scale, he said that initiating the program has been complex and time consuming. And it will be even tougher for other health care providers, who deal with less predictable procedures, such as pneumonia or heart surgery.

“It’s going to be very, very hard work for the medical system to morph,” he said. “And it’s unrealistic to think that just changing the way you give people money alone is going to do it.”

But he’s a believer that over time, it will work. “We’re convinced that we can improve the quality of care by having this close collaboration, and it’s worth the effort,” he said. “The country and our health care system can’t afford business as usual anymore.”

That’s part of why he and his colleagues are currently trying to negotiate a contract with an insurance company, to expand their bundled payment initiative from the uninsured to those with private coverage. And if all goes well, he said, they’ll probably apply for Medicare’s pilot program too.