WASHINGTON — A group of roving physicians wants to offer Medicare a money-back guarantee the program can't refuse.
Members of the American Academy of Home Care Physicians, a 10-year-old specialty society with a little less than a thousand members, met recently to discuss legislation being considered by Congress that would pay them a negotiated fee to direct a team of nurses and other professionals to care for patients with multiple chronic conditions in their homes.
The catch: If the physicians don't save Medicare at least 5%, then they will have to pay the government back some or all of their fee to make up the difference.
“If you make a bad bet, you risk 5% of the dollar. If you're taking patients who cost $50,000 a year on average, you're risking about [$2,500] a year,” said Dr. Kevin Jackson, a house-call physician in Phoenix, Ariz., and a member of AAHCP's board.
But taking that risk can also pay off. After Medicare gets its 5%, the physician gets to keep 80% of whatever money they save on these patients. There was ample evidence presented at the meeting to suggest that the savings are out there for physicians who effectively manage these patients, keeping them out of the hospital or nursing home where medical support becomes much more expensive.
Dr. Steven L. Philips, president and chief executive officer of Geriatric Care of Nevada in Reno, reported that physicians in that state have been experimenting with this model for the past 10 years, culminating in a project last year that yielded savings of nearly 13% or $1.4 million per 1,000 patients.
In Philadelphia, comprehensive management of medically complex, homebound patients enrolled in a house-call program lead to an average savings of $33,000 per Medicare patient, according to Dr. Bruce Kinosian, of the city's Hospital of the University of Pennsylvania. And in Ohio, a similar program, within a couple years of being launched now saves more than $600,000 annually because of shorter hospital stays and reductions in inappropriate and redundant services through better coordination of care, said Brent T. Feorene, president of House Call Solutions in Westlake, Ohio.
In addition, in the middle of the nation's capital, a team of physicians, nurses, social workers, and office staff have been providing home-based care to more than 600 patients with a budget of $1.6 million generated through a combination of fee-for-services charges, philanthropy, and operational support from the local hospital.
“We get no formal credit for downstream revenue, and we actually were able to measure it. It was about $10 million in net revenue to the hospital, which is probably a million in pure profit—that was 2006. But that doesn't go toward our budget,” said Dr. Eric De Jonge, director of geriatrics at the Washington Hospital Center.
However, under the Independence at Home (IAH) model physicians would get credit and some of the cash from those savings.
“This payment system is going to happen. It may be IAH; it may not be exactly IAH, but it's going to happen. Because, as we have all heard, Medicare literally is going to go broke. So unless they change the payment system, they're not going to have the money to take care of people and that politically is not tenable,” Dr. De Jonge said.
Supporters of the proposal hope to attach it to a bill that lawmakers will have to pass this year. Given that the doctors are promising to cost less than what Medicare is already paying for these patients, it seems like a good bet that it may make it into law.
“There is a huge amount of excess in Medicare, wasted, harmful care. [Those data are] driving what [the Congressional Budget Office] and Congress is doing right now [on Medicare reform]. And it's driving them right toward IAH,” Dr. De Jonge said.
Under the current legislative language, an Independence at Home demonstration project would be restricted to a very specific patient population, those with two or more chronic conditions including heart failure, diabetes, COPD, ischemic heart disease, peripheral arterial disease, stroke, Alzheimer's disease and other dementias, pressure ulcers, and hypertension. They also need to have been in the hospital, emergency department, or other intensive facility within the past 12 months and need help to perform two or more daily activities.
“We wanted to make sure that we got the costliest, sickest patients we possibly could. Why? Because the higher-cost these patients are, the easier it is to show savings,” James Pyles, Esq., a partner at Powers, Pyles, Sutter and Verville, a Washington-based law firm that specializes in the health care and educational industries, told the small gathering of physicians.