Five years ago, Dr. Guy Clifton, a Robert Wood Johnson Fellow, neurosurgeon, Congressional aid and author of the book Flatlined: Resuscitating American Medicine, spoke at the fall SAWC in a poorly attended session. Most Hyperbaric Medicine and Wound care practitioners had failed to notice the healthcare payment reform freight train that was bearing down on them. Two years later in 2016, the Centers for Medicare and Medicaid Services (CMS) launched the Quality Payment Program (QPP), now in Year Three. Dr. Clifton outlined a strategy by which hyperbaric and wound care practitioners could thrive under a quality payment system.
Here is a summary of Dr. Clifton’s talk:
- Payers are going to reduce payment rates: In 2000 the Organization for Economic Cooperation and Development (OECD) reported that the spending on healthcare in the United States was considerably higher per capita than in any other developed country, even though utilization of healthcare services was well below the OECD median. Healthcare spending = volume of services X price. If volume is lower but spending is higher, the reason has to be that price is higher. Policy makers got the message, “It’s the prices, stupid.” Higher prices in the U.S. might have been explainable if the quality of healthcare was demonstrably better in the U.S. compared to other OECD nations, but many studies indicated that this was not the case. It was a financial imperative for CMS and private payers to decrease the cost of care and increase the quality of care. To a limited extent, cost reductions have been achieved by reducing the volume of services using tools like prior authorization. However, most efforts at cost control are focused on reducing prices. Payment rates are going down.
- The key to healthcare reform is physician behavior: Physicians control about 85% of healthcare spending (prescribing medications, ordering tests, performing procedures, etc.). However, doctors are the main losers in the endless cycle of volume and price. In a fee for service world without quality standards, volume becomes excessive and payers respond by reducing reimbursement rate. When payment is reduced, doctors respond initially by increasing volume even more, hoping to offset the impact of price reductions, but eventually the payment rate gets so that physicians stop offering the service. In the 15 years between 1990 and 2005, the mean income of cardiologists, gastroenterologists and cardiac surgeons decreased by 5% while their case volume increased a staggering 55%. If physicians feel they are working harder for less money, it’s because they are. It’s probably not possible for doctors to see more patients at the current rates.
- Cost variability is huge: Extreme variability in practice standards is endemic even though data suggest that patient complexity is not that different from one region to another. Yet, among hospitals, the risk of death or adverse events varies as much as 350% , the rate at which common major procedures are performed varies over 1000% and in the same market, the pricing of those procedures varies by 600%. The good news is that pricing variability provides a lot of leeway for practitioners to negotiate payment rates. The bad news is that this variability is in part due to wide variations in quality of care.
- The key to successfully navigating healthcare payment reform is to focus on quality: Despite the pride wound care professionals have for multidisciplinary care, the survival of “wound management” as a field will be determined by whether the physicians develop and report wound care relevant quality measures and then negotiate reimbursement rates based on their performance. Every other medical specialty has figured this out. Clifton said the first step was to enshrine wound care best practices into quality metrics and then compare performance among practitioners. There is only one way that physicians get pricing leverage and that is to negotiate payment rates based on doctor quality performance. In 2014, Dr. Clifton told the handful of wound care practitioners who were listening that they could get paid better if they collectively agreed on, reported, and negotiated payment rates based on wound relevant quality indicators. He also said should also follow the example of surgeons and cardiologists in developing a method of risk adjustment for patients with chronic wounds. This allows us to calculate a risk-adjusted reimbursement rate for an episode of care and build-in an adequate profit margin for wound care practitioners. Alternatively, we could negotiate supplemental fee-for-service payments for those doctors whose commitment to best practices was evidenced by their quality measure performance. In other words, we could negotiate higher payment rates for “preferred providers.”
Some of Us Were Listening
Following this roadmap for success, in 2014, the Alliance of Wound Care Stakeholders and the U.S. Wound Registry (USWR) developed 14 wound care quality measures which were subsequently approved by CMS and that same year, a few physicians began reporting wound care quality metrics to CMS. This year, 3 of those measures were included on Physician Compare: arterial screening of all patients with lower extremity leg ulcers (on the first visit); adequate compression of all venous leg ulcers (VLUs) and adequate off-loading of all diabetic foot ulcers (DFUs). Practitioners who reported these measures had on average, a 10% better healing rate for DFUs and VLUs than non-reporting practitioners. Healing rates were reported to CMS using the USWR’s risk adjustment tool, the Wound Healing Index (WHI). Risk adjustment with the WHI ensures that practitioners caring for the sickest patients will not appear to have worse healing rates. We are actually able to improve the quality of patient care and patient outcomes using quality measure reporting, and to fairly compare practitioner performance using risk stratification. That is a huge accomplishment and it’s the key to survival.
Have You Missed the Train?
The recent Hospital Outpatient Payment proposed rule proffered an “episode” based payment rate for the use of cellular and/or tissue based products. The proposed rule on Medicare Physician Payment suggested that CMS might combine episode based payment with physician quality reporting to ensure that patient quality of care does not suffer under the new payment methodology. Note that CMS indicated they would bundle payment for FACILITIES but put the responsibility for quality of care on the PHYSICIANS. Physician payment will be linked to quality measure performance one way or another, and not really because of the Merit Based Incentive Payment System (MIPS) but because private payers will create differential reimbursement rates based on quality performance. Quality data are now publicly reported by practitioner name on Physician Compare. Private payers use these scores to negotiate physician payment rates and to develop capitated payment models. The last thing we want is for hyperbaric and wound care reimbursement rates to be determined by their performance on quality measures like blood pressure control. If everything about how we get paid for hyperbaric medicine and wound care hinges on quality performance, we need quality measures that differentiate clinical excellence those fields, not in primary care.
By failing to support quality reporting using relevant measures, we are missing an opportunity to improve patient care, decrease healthcare spending and actually improve the physician payment rate for hyperbaric medicine and wound management. If physician payment for wound care services is not secure, the entire industry will collapse. Physicians are not being greedy to worry about this. Despite the recent court battle over hospital outpatient payment rates, the question is not IF there will be a site of service adjustment that moves all of wound care into the doctor’s office – the question is WHEN that will happen. If physician payment is not secure, the day these services become completely dependent on physician reimbursement is the day that hyperbaric medicine and wound management collapse like a house of cards.
In every other medical field, the burden of developing and actually reporting relevant quality measures is supported by industry partners and medical specialty societies. Sadly, neither the hyperbaric medical organizations or the wound care clinical associations have gotten behind quality measure reporting for physicians. Five years after Dr. Clifton explained how we could actually thrive under the new system; the healthcare payment reform train has left the station. We had years of advanced warning that this would happen, which makes it even more unfortunate that so few physicians practicing hyperbaric medicine or wound management got on the train. I fear that it’s too late to save hyperbaric medicine although the field may survive thanks to off-label use provided in physician offices. Unlike office based hyperbaric oxygen therapy, the economic model for office-based wound management is less certain. It’s a shame that wound care clinical associations have not been able to separate the importance of multidisciplinary patient CARE from the separate imperative to support physician quality reporting. Multidisciplinary wound management will be a thing of the past if the only payment source is the physician’s pocket. It would also be wise for manufacturers to consider what will happen to product sales if the purchasing department for all of outpatient care is the physician’s wallet. Payment reform played out exactly as Dr. Clifton said it would back in 2014. If you think I am exaggerating on the next phase, re-read this in five years.
- Anderson GF., Reinhardt UE., Hussey PS., Petrosyan V. It’s The Prices, Stupid: Why The United States Is So Different From Other Countries Health Affairs, 22, no. 3 (2003): 89-105.
- McGlynn EA, Asch SM, et al. The Quality of Health Care Delivered to Adults in the United States, N Engl J Med 2003; 348:2635-45
- The Dartmouth Atlas Project
- USWR wound care relevant quality measures