S.F. experiment aims to improve medical treatment, lower costs

Researchers long ago established that certain medical procedures are performed at dramatically different rates from place to place, and that these disparities affect the quality and cost of health care.

Now, health insurers, hospitals and government agencies from the Bay Area to Washington, D.C., are getting more aggressive about tackling variation in medical care.

The issue will surface in San Francisco with a collaboration that started this summer among Blue Shield of California and some local hospitals and physicians, aimed at better coordination of patient care for about 26,000 public employees.

The partnership is modeled after a similar one in the Sacramento region whose early efforts to rein in variation resulted in training doctors in newer medical techniques and offering patients less-invasive treatment options.

In the case of weight-loss surgeries, procedures fell in one year by 13 percent.

“When you have over-utilization, it is both a cost and quality issue,” said Paul Markovich, Blue Shield’s chief operating officer. “Hospitals are not really safe places to be. … You only want to be there if you have to be there.”

Also this summer, the Centers for Medicare & Medicaid Services (CMS) started using a new data-mining technology to detect and prevent fraud in the Medicare program, the federal health insurance program for people 65 and older.

Extreme variation in care is one pattern the technology will be looking for.

The technology uses algorithms and an analytical process to identify billing patterns that could indicate fraud and prioritize them by risk, said Peter Budetti, director of the CMS Center for Program Integrity.

“We’re focused on variation that is so out of line that it clearly indicates there’s a problem,” Budetti said. “We know all too well that variation alone does not necessarily mean bad medical care or fraud. But variation in the extreme is something we’ll be looking carefully for and at.”

There’s a lot at stake, not only for patients’ health, but for their pocketbooks.

Last year, Medicare made an estimated $48 billion in improper payments, accounting for nearly 40 percent of that year’s federal wasteful spending, according to a July report from the U.S. Government Accountability Office.

Improper payments can include payments for services that were not medically necessary and payments for fraudulent claims.

Accountable care

In San Francisco, some health care providers and Blue Shield came together to create what’s called an accountable care organization, a network of providers who work together to closely coordinate care for their patients.

San Francisco county and school employees and retirees became part of this experiment in July by choosing Blue Shield HMO as their insurer and joining one of the participating physicians groups: Hill Physicians Medical Group and Brown & Toland Physicians.

Participating hospitals include two Catholic Healthcare West facilities, UCSF and California Pacific Medical Center.

They say the aim is to reduce costs and improve quality. All agreed not to raise members’ health care premiums, at least for the current one-year contract, and to take a financial hit if they couldn’t save enough to make up for keeping rates steady.

“We insisted the insurers and providers create this partnership to address rising health care premiums and complaints from members about a lack of coordination of care,” said Catherine Dodd, director of the San Francisco Health Service System, which negotiates benefits for the public employees.

In an earlier collaboration, initiated last January in Sacramento, Blue Shield worked with Hill Physicians and Catholic Healthcare West to coordinate care for more than 40,000 members of the California Public Employees’ Retirement System.

After one year, it was heralded as a success, resulting in $20 million in savings. Of that, $15.5 million went toward keeping the rates the same and the remainder was shared among the medical providers and Blue Shield.

The collaboration continues, but premiums for 2011 and 2012 will increase by about 4 percent each year, which Markovich said is lower than they would have been without the savings.

Other successes of the experiment included a 15 percent decrease in hospital readmissions within 30 days of discharge; a 15 percent decrease in days patients spent at the hospital; and a 50 percent drop in hospital stays of at least 20 days.

Tackling variation

One way the Sacramento collaboration reduced cost was by tackling variation.

Decades of research have shown that the chances that you’ll undergo a hip replacement, mastectomy or other procedure depend partly on where you live and which doctor you choose.

Doctors’ training and preferences lead them to favor certain treatments. Over time, this can create differences in how many procedures are performed — within and across communities.

The Sacramento groups shared and analyzed data to determine which procedures were outliers, and found high rates of knee surgeries, weight-loss surgeries and invasive hysterectomies, said Tricia Griffin, spokeswoman for Catholic Healthcare West.

In the case of hysterectomy, which is the removal of the uterus, Hill Physicians determined that certain doctors were mainly performing the invasive form of the procedure. These so-called “open” hysterectomies are done through an abdominal incision.

But less-invasive options, such as laparoscopic hysterectomies, could have been used in some cases, said Rosaleen Derington, Hill’s chief medical services officer.

“You start to say, wow, how could that be?” Derington said. “A minimally invasive procedure, when appropriate, is much safer for the patient. There’s a much quicker return to work, less chance of infection, a shorter length of stay and it’s less costly.”

Training doctors

Hill investigated and learned that some of the physicians performing open hysterectomies hadn’t been trained in the newer, less-invasive techniques.

“A lot of times, it turns out that the doctor needs some education or there’s a hang-up in process or there’s an economic underlying reason why somebody’s doing not enough of one thing or too much of another,” said Richard Fish, CEO of Brown & Toland.

To combat the problem, Hill worked with doctors to figure out which of their patients were candidates for the less-invasive procedure, and directed those patients to doctors who could do it. Some of the doctors also have received training in the newer procedure, Derington said.

Some physicians pushed back on the changes initially, she said, “but that has subsided.”

Early results show that the number of invasive hysterectomies has declined, Griffin said.

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