Health care redesign plan focuses on primary care, doctor payments and reducing waste

A team of state officials and health care industry representatives are trying to redesign the way health care is paid for and delivered to the vast majority of Connecticut residents.

According to a draft of their plan, their vision includes bolstering primary care practices to take on a larger role in patient care and offer treatment during expanded hours. It calls for better linking of medical practices with social services and other supports that could help people in high-risk communities. And it includes changing the way health care providers are paid by giving them an incentive to rein in what their patients' care costs -- a model that's been embraced by Medicare and insurance companies but has drawn fire from patient advocates.

The idea is to cut into the $29 billion spent on health care in Connecticut each year while improving the health of state residents. David Nuzum, a consultant for the firm McKinsey who is working on the project, said the plan assumes that over five years, it will eliminate 10 percent of the waste in the system, with some of the money funneled back to health care providers as part of bonus or shared-savings programs.

The draft plan says it aims to save more than $1 billion over 10 years by reducing the growth of per-capita health care spending by 1 to 2 percentage points, reducing avoidable complications, preventable hospitalizations, unnecessary emergency room use and duplicative testing.

The effort is still in an early stage. Officials are working on an application for $45 million in federal funds, part of a grant included in the federal health reform law. It’s intended to create changes that affect at least 80 percent of state residents, including those covered by private insurers, Medicaid and Medicare. Insurance companies are part of the planning process, but their participation in anything that comes from it is voluntary.

In describing health care in Connecticut, the plan portrays a state that fares better than the national average on many health measures, but that also has significant disparities and a looming shortage of primary care providers with the skills needed for evolving models of health care delivery.

Overall, the state’s rate of people who get readmitted to a hospital within 30 days of a previous hospitalization is lower than the national average, but it’s significantly higher among Medicaid patients. The infant mortality rate varies widely -- 13 percent among blacks, 7.1 percent among Hispanics and 3.8 percent among whites.

And even the top health indicators come with what the plan calls an “extremely high price tag.”

“Unchecked, these expenditures threaten to create a budget deficit for the state in the next two years that would crowd out other important areas of public expenditure,” it said.

A key piece of the proposal is the widespread adoption of “advanced medical homes,” a model for delivering primary care in which the medical team takes on a larger role in their patients' health, coordinating care they receive from specialists and ensuring that they receive needed screenings and exams.

Many Connecticut primary care practices have already been recognized as medical homes by one of several national groups. The program being proposed would include some Connecticut-specific standards, but would not require practices that already meet one set of medical home standards to go through the whole process again.

The plan also calls for shifting the way health care is paid for, from a fee-for-service system that rewards providing more care to one that compensates health care providers for providing high-value care and reducing waste and inefficiency.

In the models proposed, primary care providers serving as advanced medical homes would be held accountable for the overall cost of their patients’ care, potentially getting a bonus if they save money. If payers endorse it, providers could also choose a “risk-sharing” program, in which they agree to get reduced payments if they don’t save money but larger bonuses if savings occur. Some providers, particularly those still working to become advanced medical homes, could participate in another model, in which their potential bonus payments would be tied to “discreet measures of resource utilization.”

To be eligible for any bonus payments, providers would have to meet certain care quality measures, according to the draft.

Many insurance companies, as well as Medicare, have already adopted programs to try to move away from fee-for-service payments, but they don’t all use the same standards. Having most of the organizations that pay for health care use the same model would help providers avoid having to work under conflicting standards, the draft plan said, and would give them more incentives to invest in things that would help improve their practices, such as staff to coordinate care or electronic medical records.

Patient advocates have taken issue with the model, saying it’s problematic to give health care providers a stake in the cost of patient care. Sheldon Toubman, an attorney with the New Haven Legal Assistance Association, said it would give doctors a financial incentive to provide or recommend less care for their patients, potentially in ways -- say, fewer hours of home care, or a cheaper medication with side effects -- that would be hard to track. He said it’s a particular concern for patients in Medicaid, some of whom already have trouble finding doctors to treat them.

Supporters of the idea say there are safeguards because providers must meet quality measures before getting any bonus payments. The draft proposal also calls for creating an “equity and access council” that would use “advanced analytic methods” to protect consumers and potentially identify cases in which patients aren’t getting needed care.

The draft plan said Medicaid would be excluded from the risk-sharing portion of the program, in which providers could lose money if there aren’t savings. But Anne Foley, an undersecretary in the governor’s budget office, questioned during a meeting Tuesday why the planners would commit to exempting Medicaid from that program.

Social Services Commissioner Roderick L. Bremby said there would need to be measures to understand the effectiveness of the model “before we open it up for populations that may be at a higher level of acuity,” and a way to make midcourse corrections if needed. But he said he wouldn’t oppose changing the wording of the proposal to not rule it out entirely down the road.

State Healthcare Advocate Victoria Veltri, who is leading the planning team, said there will be another draft proposal released, and plans to get comments from the public. Consumer advocates have criticized the planning process for not involving any independent advocates on the team developing the model.

Frances Padilla, president of the Universal Health Care Foundation and a member of the team, asked whether the purpose of seeking comment was “to persuade people or to get feedback that we might not want to hear.”

Veltri said it was both, to get ideas that could make the plan better but also to explain why planners chose the direction they did.

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