The CBO issued a brief Wednesday on the budgetary treatment of health reform proposals. It may sound dry, but the brief reads like a roadmap for Congressional legislators, signaling how CBO will evaluate their proposals depending on what policy options they choose to include and submit. (Read the Director’s Blog for a shorter interpretation.)

Why is this significant? In the ’93-94 effort for health reform, the Clinton Administration hit a wall when CBO concluded that a mandate on employers and workers to buy into a government-run program would be a form of taxation, and therefore an expansion of government.

This time around, with this brief issuing fair warning to legislators about how different proposals will be scored, we are seeing the results of another lesson learned from the last attempt. By providing guidance in advance, the CBO will allow Congress and the President to assess the trade-offs between the design and choice of health plans, and whether any premium contributions for these plans would be considered public or private payments.

Dating back to the 2008 presidential campaigns, chronic disease has featured in health reform discussion—a big change from the last attempt at health care reform in ‘93-94.

But the proof of commitment to addressing our nation’s chronic disease crisis is in the policy, and not simply the rhetoric. In the last two weeks, there are two instances where language on prevention and wellness has been included in Congressional policy proposals—first, in a second bi-partisan Senate Finance paper from Sens. Baucus and Grassley, and then in the Patients’ Choice Act, the health care plan proposed by the Republican Policy Committee. 

Both papers argue that better preventing and managing disease is a way to lower long-term health care costs (see Almanac of Chronic Disease for supporting data), and the Republican white paper cited many of PFCD’s “Unhealthy Truths.” I was also pleased to see community health teams included in the Senate Finance paper as a way to improve quality and coordination.

As I mentioned in a PFCD briefing last Thursday, we need to make sure that options for prevention and wellness are especially included in reform of entitlement programs (Medicare, Medicaid) that shoulder a disproportionate chronic disease burden compared to the rest of the system. Patients with one or more chronic diseases account for 96 percent of every Medicare spending and 82 percent of Medicaid spending, compared to 75 percent of total health expenditures.

Ken Thorpe responds to a post on the National Journal blog about fraud and abuse in Medicare: http://healthcare.nationaljournal.com/2009/05/policing-medicare-fraud-worth.php#1328994

PFCD Executive Director Ken Thorpe was featured on CNN on Tuesday, May 5 to share his thoughts as part of a “90-second Rx” on health care.

Watch PFCD Executive Director Ken Thorpe share his thoughts on CNN’s “90-second Rx”

So we face a key choice in the debate about redesigning our health care delivery and prevention system—and Medicare must take the lead.  Several states have already created community health teams, including Vermont, North Carolina, and Rhode Island. In Vermont’s care system they use the teams to manage all patients, including Medicare’s, even though Medicare does not pay its share. These states and others, including Pennsylvania, are ready to expand the approach but need Medicare at the table. 

So the choice is simple: do we leave the system intact with no investment in care coordination and prevention in Medicare?

We know the results of this approach—20% of hospitalized patients readmitted after 30 days, high rates of preventable hospital admissions, clinic and ER use and high and rising costs. 

Or will we be bold and invest in prevention and care coordination—on the order of 0.6% of traditional Medicare spending (about half of what the private sector invests in care coordination) and finally create a modern prevention and care management system that will improve the health care outcomes and ultimately reduce the costs of treating Medicare patients? 

The data indicate that well-designed community health teams could save 3 to 7 percent in overall Medicare spending for a 0.6% investment!  To me, the choice seems quite clear! I look forward to the on-going discussion and debate about how best to innovate and improve our health care system.

The biggest policy challenge we face is providing prevention and care coordination nationally in the traditional Medicare program.  Several randomized trials have demonstrated the essential features of how to design these programs—including formal transitional care programs and an integration of care coordination with the provider practice.

One approach for achieving these objectives is through patient centered medical homes that have demonstrated quality improvements and cost reductions such as the Geisinger and Marshfield clinic models. However, these integrated practices are not easily replicated and are not nationally scalable. Indeed, 83% of primary care practices have fewer than 4 physicians, accounting for nearly 40% of the overall primary care workforce.

A second approach—creating community health teams—was envisioned by the Finance white paper draft in November but is noticeably absent from this week’s policy options.  These teams include care coordinators, nurses, nurse practitioners, social and mental health workers, nutritionists, community outreach workers that work with smaller practices to provide prevention and care coordination for Medicare and other patients. 

Published empirical research on these models from North Carolina and other settings show these approaches improve clinical outcomes and reduce healthcare spending.  Making community health teams available nationally to manage Medicare and other patients is the type of transformational change—a game changer– in the delivery system that then-candidate Obama hinted at in his health care reform proposal.

Last Wednesday the Senate Finance Committee unveiled their initial thoughts and proposals for reforming how we pay for and deliver health care to chronically ill patients.  The initial focus on prevention and delivery system reform is important since it signals the breadth of the health care reform debate about to unfold. Not only will it include an intense discussion of how to pay for (and what type of health benefits should all Americans minimally receive) insurance for the uninsured, but the Committee has appropriately focused on innovative new approaches for improving quality and slowing the growth in spending.

There are several important themes in the initial Finance walk-through and I congratulate Senator Baucus and Grassley (and clearly their staff!) for putting forward a thoughtful first step. Most agree that one of the most difficult challenges is how to integrate prevention and care management into the traditional Medicare program. Prevention and care coordination is largely absent in the program—Medicare does not pay for it, and we do not have the care coordination capacity in place nationally to support it. 

On this point, the Finance draft makes several important, if somewhat timid, proposals.

• First, Medicare would provide reimbursements to physicians to contract with community-based care coordinators, or those employed by the practice, to provide care coordination and transitional care to patients post-hospital discharge—this is a major step in the right direction.
• Second, the options draft would create a new chronic care management innovation center to promote innovative care management and prevention strategies designed to include not just Medicare but other payers as well. 

Both of these proposals are proposals that move the debate in the right direction, but, while promising, are not as bold as needed.