Feeling Bad About CMS Feeling Good

Amy Bassano, incoming deputy director of the CMS Innovation Center, said, “We feel good that hospitals are ready to start (bundling payments) on April 1.” Those of us in health care delivery would all feel a lot better in health care if CMS knew that hospitals are ready - but CMS doesn't know what or who is ready and they have not known so for some time. This is more evidence that we need more health care engineers in health care and fewer innovators, researchers, and entrepreneurs at the controls.

Why do we feel bad when CMS says they are feeling good about something?

Unlike other innovations sent our way in rapid order, there is some potential to estimate the impact for this new innovation in payment. Diagnosis Related Groups bundled hospital payments by diagnosis. What were the results?

There was some impact on cost control.
There were big winner hospitals, winners, loser hospitals, and lost hospitals. The bigger ones won and those smaller lost with closures of hundreds of hospitals paid too little for the care demand. Special legislation was required to repair the damage, but ACA and CMS have taken these out - resulting in dozens of hospital closures with more to come.
The marginalization of nursing was inevitable under bundling as nurses were caught between patient care demand and hospital needs to cut costs via personnel cuts.
There has always been a potential negative impact upon quality due to nurse to patient ratios too high. The adverse impacts of DRGs may have lowered quality in ways that help explain recent "improvements" better than innovation focus.
Infrastructure suffers and the capacity for care during epidemics declines.
Forced mergers and closures have resulted in a decrease in competition with potentially higher costs.

DRGs were the only cost control available to CMS in 1982 and only had a 1 year test in New Jersey, a most atypical state as far as the nation's hospitals, populations, etc. There was no time for study, nor was there a critical look as to how to prevent consequences. Consequences have continued for decades with rising divisions between primary care and facilities, increased loads places on low resourced primary care, theft of 50,000 primary care trained physicians to become the hospitalist workforce.

CMS and ACA designers actually knew about many of the consequences of innovative payment, but have still moved full speed ahead.

What will happen under bundling? Almost certainly bigger combined with smaller in bundling such as hospitals and physicians will result in hospitals and systems winning and physicians and personnel losing. Once again CMS has assumed that there are cuts that can be made after decades of cuts. CMS assumes that something clinical inside of health care can be done to improve quality while shaving costs - ignoring the fact that the patient and situation and other patient factors are 60 - 70% of outcomes with clinical limited to 10 - 20%

Bundling will leave winner and losers. Winners will profit as they will get paid and have lower costs. These are likely to be systems in locations with advantaged patients, higher resources, and better situations such as intact families, housing, transportation, etc. The biggest always find a way to game the new scenario faster and better - a huge advantage in a time of constant chaotic change.

Another adverse impact will be seen in the losers. CMS has not shown the ability to adapt to the demands of more complex patients, nor is this possible to do in a way that does not create more winners and losers.

Front line health access has been losing by CMS design for decades.
Not surprisingly this pattern will continue.

The real design of the innovation center has always been clear. Innovate to save, rearrange to save, integrate to save, consultants to save. Show CMS the money saved and we will give you money. Bundling is designed first of all to save CMS first and foremost without regard to patient or provider considerations. "The Centers for Medicare and Medicaid Services, or CMS, estimates the program will save $343 million on the $12.2 billion that Medicare will spend on the procedures over the next five years."

It is safe to say from the last ten innovations implemented in rapid succession that the US health care system has not been ready for the individual changes, much less the combination of combinations of change. The innovation center has continued its focus upon innovation regardless of the adverse impacts upon care and the adverse impacts upon those who deliver care.

I tried to describe my frustration with health care designers to my chemical engineer dad. I noted, " Imagine that the researchers were in charge of chemical plants. Would it surprise you that there were cost overruns, infrastructure problems, workforce issues, failed processes, and even a few blow ups along the way?" Engineers or engineering thinking is needed with materials, logistics, infrastructure, personnel, and outcomes constantly integrated in an efficient and effective manner.

Tossing it in to see if it sticks does not work well beyond making spaghetti. We need to know what will work, not how to manipulate the next design to see if it does or does not stick. We must know more before implementation. We owe this to tens of millions of people impacted by these changes and perhaps an entire nation.

A chance to cut is a chance to cure is as outmoded in health policy as it is in surgery.