It’s a chicken and egg kind of question. Which came first: a slowdown in Medicare spending that will necessitate further cost cutting by hospitals and healthcare systems? Or efficiencies recently underway in many healthcare organizations leading to the slowdown in Medicare spending?
That kind dizzying circular thinking is not uncommon in today’s rapidly evolving healthcare system. Throw in changes resulting from the new Affordable Care Act, 11,000 baby boomers signing up for Medicare every day and the fallout of a recent recession, and it’s hard to sort out cause from effect simply by looking at actuarial tables.
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But those tables have shown that Medicare spending has grown more slowly since 2010. A comparison of government numbers from August 2010 and April 2014 for Medicare spending found that each of the nation’s 50 million elderly or disabled Medicare recipients would cost $1,000 less than was expected just four years ago. Not only that, spending is on track to be $2,400 less than expected per person by the year 2019. That doesn’t translate to savings. Rather, it means the rate of growth in spending is slowing down.
But any way you slice it, the newest numbers on Medicare spending mean less money for hospitals and health care systems. The news is no doubt leading some of the country’s most innovative healthcare systems to 1) be proud of themselves for their efforts to reduce costs and 2) understand that they have no choice but to keep doing what they’re doing, and figure out how to do it even better.
“Our goal for the last decade has been to drive quality improvement while reducing the total cost of care,” says Thomas Graf, chief medical officer for population health and longitudinal care at Geisinger Health System, which serves 2.6 million people in central and northeastern Pennsylvania. “I could argue that the improved Medicare numbers are a response to changes that we and others have made.”
In 2008, the Commonwealth Fund Commission, a foundation that supports research on healthcare issues, analyzed 15 innovative healthcare systems, including Geisinger. The report looked at how Geisinger reengineered the delivery of care to improve quality, patient satisfaction and efficiency. The report found that Geisinger invested heavily in hardware, software and training to implement its electronic health record. Today, more than 3 million patient records are stored electronically, acting as a central nervous system that allows physicians, nurses, pharmacists, laboratory personnel and, in some cases, the patients themselves to see at the click of button what has been done, by whom, when it was done, and the result.
But it was change in the hands-on practice of care that produced the best results both for patients and the bottom line. Financial incentives are shifting, making it profitable to keep people healthy. Dubbed population health management, the new incentives can satisfy patients who don’t get as sick as often, while cutting back on the use of expensive resources by reducing unnecessary hospital stays, avoiding duplicate tests and procedures, preventing disease and controlling chronic disease to avoid heartbreaking and costly consequences.
When Geisinger officials studied their own numbers on diabetes care, for example, they found things that could be changed within every physician’s office. “We came up with things that a primary care physician could do to improve the health of their patients with diabetes,” says Graf. Those things included routinely checking blood pressure, cholesterol, urine and blood; making sure patients got flu and pneumonia vaccinations; and encouraging smokers to quit. In 2004, Geisinger found that only 2.4 percent of its diabetic patients were getting all the tests, immunizations and advice that were proven to help them stay healthy.
They educated physicians and nurses about diabetic care. They added automatic reminders to electronic medical records so that providers would not forget that it was time for a patient’s blood or urine test. Members of the medical team would call patients to remind them that it was time for routine tests. And the effort paid off. Today, more than 14 percent of diabetic patients get every test and reminder they need. “And those are the people who had everything on the checklist done,” says Graf. “It’s a long list, and now there are people who once had only one or two of the things done and are now getting four or five things done. Diabetic care improved for everybody. It really makes a difference. And it results in about a five percent reduction in the cost of care.”
Healthy patients in Geisinger’s system get regular attention, too. Every year around their birthday, patients get a phone call to remind them of the preventive care they’ll need the next year: a mammogram, a colonoscopy, a flu or pneumonia vaccine. “Through that process, we’ve increased colon cancer screening by 50 percent,” says Graf. “We’ve seen similar improvements in vaccination rates and breast cancer screening.”
Such attention might seem an intrusion, compared to the laissez-faire doctoring of years past. “I think patients love it,” says Richard Alan Martin, a primary care physician with Geisinger. And for Martin, this new way of doctoring–working within a team with the support he needs, electronic and otherwise, to reach out to patients to help keep them healthy–has been a life changer. “Fifteen years ago, when I was about 50, I couldn’t wait to retire. This program has revitalized my career. We focus on the right thing to do for patients,” he says. Now, he says he has no plans to retire.
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Early in Martin’s career, he acquired a practice that had been run by the same family of physicians since 1896. “I’ll never forget that doctor telling me that nothing had changed in how he practiced since his grandfather had opened the office,” says Martin. Looking toward the future, it’s clear that a century of doing things the same old way is not in the cards for any provider or healthcare system.
There will, no doubt, be bumps in the road as providers, healthcare systems and hospitals continue to feel pressure to do more with less. Some smaller hospitals, unable to adapt, will fail. Some physicians, unwilling to delegate routine tasks to members of a team or to electronic reminders, may be tempted–as Martin once was–to retire early.
But innovative systems like Geisinger are busy anticipating trends, examining actuarial tables, studying results in their own patients, and plotting the next move that will cut costs and improve patient care. “Improving quality decreases costs,” says Graf. “For us, it’s been the journey of a decade.”
More on Medicare Spending:
— U.S. News’ Guide to Medicare Insurance
— Will the Slowdown in Health Care Costs Last?
— What’s Behind the Slowdown in Health Care Costs
— Republicans Hurt By Slowing Costs in Health Care
— Study: Employers Pushing More Health Costs on Workers Despite Slow Premium Growth
— Opinion: No Mission Accomplished on Health Care Costs
— Opinion: Health Care Spending Reform Won’t Improve Actual Health
More from U.S. News
Will the Slowdown in Health Care Costs Last?
What’s Behind the Slowdown in Health Care Costs
No Victory for Obamacare Over Health Care Costs
How the Slowdown in Medicare Spending Is Affecting Hospitals originally appeared on usnews.com
