Statement of Anmol S. Mahal, M.D., President, California Medical Association, Freemont, CA Testimony Before the Subcommittee on Health of the House Committee on Ways and Means May 10, 2007
Mr. Chairman and Members of the Committee, on behalf of the
California Medical Association, I want to thank you for inviting me to testify before
the Committee on the important Medicare issues facing our nation. I hope to
provide some insights about our California experiences to help the Committee in
its deliberations.
I also want to extend a special greeting to my Congressman,
Mr. Stark. Mr. Chairman, we sincerely appreciate your efforts to work with us
to design a Medicare physician payment system that will appropriately reimburse
physicians and ensure the highest quality medical care for our Medicare
patients.
I. Introduction
Mr. Chairman and Members of the Committee, California physicians
are keenly aware that Medicare is in precarious financial condition and we are
extremely concerned about the program’s ability to continue fulfilling its
mission. We understand that Congress faces competing goals for the Medicare
program. The government must rein-in Medicare spending at a time when the baby
boomers will begin enrolling in the program – thereby increasing the volume of
services. But Congress must also fix the physician payment system to ensure
those same baby boomers have access to doctors in the future.
Physicians face similar challenges on an individual level. Eighty-three
percent of Medicare patients have chronic conditions and the numbers are
growing. In ten years, physicians will spend nearly half their time treating
Medicare patients with multiple chronic conditions. Physicians are concerned
about their capacity to appropriately treat these increasingly sick patients with
diminishing resources and reimbursement.
As California physicians, we agree we must do our part to
provide the highest quality care in the most efficient possible manner. We must
join Congress in being responsible stewards of the Medicare program, just as we
are stewards and advocates for our patients. We at the CMA are committed to working
with Congress to improve the Medicare program by sharing our knowledge of evidence-based
medicine and our experience with programs that attempt to manage costs and care
– such as the physician peer comparison programs in California.
II. California Medical Association SGR Overhaul
Plan
To that end, the California Medical Association recently unveiled
a long-term plan to overhaul the SGR system. Included in the plan are
recommendations for Congress to establish a series of demonstration projects that
would test different systems for appropriately managing costs, incenting the efficient
use of resources, and better coordinating patient care. Ultimately, the
successful programs would replace the SGR as the volume control mechanism. We
fully understand that the Committee is searching for better tools to control
the growth in the volume of physician services, such as the physician peer
comparison programs.
The Chairman has asked me to comment on a program in which I
participate in Northern California, which compares my practice patterns to my
peers. The program is educational in nature and physician performance on
utilization, quality and patient satisfaction are rewarded through bonus
payments. Many safeguards would be necessary before such a complex program
could be considered in the Medicare fee-for-service system.
I also should make clear at this point that the California
Medical Association has not yet taken a position regarding physician peer
comparison programs. We are currently in the process of thoroughly evaluating
the peer comparison programs operating in California. We certainly believe that
peer comparison information provided to physicians on a confidential basis for
educational purposes would be beneficial to physicians and the Medicare program
in general. However, peer comparison programs that tie reimbursement to
utilization performance should be examined through Medicare demonstration
projects because of their complexity and potential impact on patient care.
III. A California Physician Peer Comparison Program
As a primary care physician, I participate in a physician
peer comparison program through a large Independent Practice Association (IPA)
in northern California. The IPA provides confidential comparative information
to individual doctors on how their quality, utilization, and patient
satisfaction compare to their peers. The IPA’s program is called the Primary
Care Management Program.
Many California medical groups and IPAs who run sophisticated
managed care systems employ utilization profiling methods, but the vast
majority of these groups use them only for educational purposes. The
educational aspect of comparative information is vital to the success of these
programs. Such information has helped physicians better understand their
practice patterns compared to their peers and allowed many physicians to
improve their practice.
Overall, the group in which I practice employs two tools to
manage the care of its patients. The first tool is a physician peer comparison
tool that fosters self-improvement. The second tool is a financial reward for
meeting quality measures and utilizing services consistent with one’s peers. Such
financial incentives have proven crucial to maintaining access to primary care
physicians in my community and in helping physicians begin to invest in health
information technology.
Compensation - Primary care physicians (PCPs) affiliated
with the group receive compensation in two distinct ways. They receive fees
for the services they provide to patients (fee-for-service payments), and also
receive a quarterly fee that rewards the effective management of their patient
population. As for the fee-for-service payments, PCPs are paid for the
services they actually provide, so there is no incentive to underutilize, and
they also receive a per member payment that is based on their performance on
specific metrics.
The quarterly fee for effective management is called the
Primary Care Management Fee (PMF), and is based on many different metrics
specific to the physician’s practice. These metrics reside in one of four
profiles: The Utilization Profile, the Clinical Profile, the Participation
Profile, and the Satisfaction Profile. I will describe each of the four.
Utilization Profile – The Utilization Profile measures
the cost of all health care services used by the group’s physician members. Its
components include physician professional services, pharmacy and facility
costs. PCPs with fewer than 200 adjusted members are not considered statistically
relevant and are excluded from the calculation.
The Pharmacy component of the Utilization Profile includes a
synopsis of the PCP’s prescribing patterns and resulting PMPM costs. The cost
reported here represents 50% of the actual total pharmacy costs. By contrast,
facility costs are reported at the group level due to statistical unreliability
at the individual level. The facility costs assigned to each physician
represent 50% of the total facility cost. Admission rates and lengths of stay
are included in the calculation. The total cost figure is the sum of
professional, pharmacy and facility costs, and the final calculation shows where
the physician’s utilization costs stand relative to the panel average.
Clinical Profile – The second profile—the Clinical
Profile—measures the group’s clinical initiatives. These metrics report
individual performance against that of the physician’s panel, region and
system, and holds the physician to the system average. There are currently
eight clinical measures included in the profile. They are designed to maintain
a high standard of care and to improve patient outcomes. The eight measures
include: Breast Cancer Screening, Cervical Cancer Screening, Diabetes HbA1c,
Use of Appropriate Asthma Medication, Childhood Immunizations, Comvax and
Pediatric Use, Cholesterol Screening, and Chlamydia Screening.
Participation Profile – With respect to the
Participation Profile, physicians earn points for participating in the group’s
activities.
Satisfaction Profile – The fourth and final profile
is the Satisfaction Profile. As its name suggests, the Satisfaction Profile is
based on a Patient Assessment Survey in which physicians are rated by their
patients. Patients are randomly selected to participate in the survey. In
order for a physician’s scores to be counted, at least 20 surveys must be returned.
The most heavily weighted question asks the patient if he or she would
recommend the doctor to family or friends.
Patient Calculations – Because the costs associated
with treating patients in a given practice are calculated on a per-member
basis, it is essential to acknowledge that not all members are the same. Accordingly,
the program makes adjustments based upon the demographics of the physician’s
patient population, including an adjustment based upon the number of Medicare
patients the physician is treating. On this last point I think it is important
to note that Medicare patients are weighted as four commercial private
patients. Adjustments for age and sex are computed based on system wide data.
Stop Loss Adjustment: There are some costs that are
shared among an entire region rather than assigning them at the physician
level. Maternity, HIV/AIDS, wellness (i.e., screenings and immunizations)
dialysis, oncology, colonoscopy, and ophthalmology costs are allocated to all
PCPs equally. This Stop Loss Adjustment was created to prevent a few very
costly patients from inappropriately overstating the total cost in a PCP’s
profile.
IV. Recommendations for Physician Peer Comparison
Programs
Based on California physician experiences, I would like to offer
the Committee a few recommendations to consider when implementing a Physician
Peer Comparison Program.
I would also like to differentiate between a physician peer
comparison program that provides confidential, educational feedback to
physicians as a tool for self-improvement and a comparison program that ties
reimbursement to efficiency. CMA physicians are interested in
self-improvement and we believe that the educational aspects of peer comparison
can be extremely helpful to physicians and effective in improving practice
patterns. We would support such programs.
However, as you can see from the background we provided to
the Committee, comparison programs are extremely complex if implemented
appropriately. Therefore, we would prefer to see any comparison programs that
are tied to performance payments to be examined in a Demonstration Project
environment before being adopted by Medicare.
The CMA recommendations for Peer Comparison Programs are set
forth below:
1. Overall, Physician Peer Comparison Programs are not a
panacea for Medicare’s financial problems. However, they could be an
effective tool for identifying outliers and encouraging the efficient use of
resources. These programs can also produce accountability at the individual
physician level, which has been a source of criticism for the SGR. Some California programs have produced a savings and allowed physicians to further invest in meeting
quality measures and adopting health information technology.
The Medicare program should not focus myopically on whether
physicians are doing too much. Instead, it should assess whether they are
doing enough of the right things, such as providing evidence-based care and
preventive care. If physicians are providing preventive care, hospitalizations
will be reduced, patient outcomes will improve, and Medicare will gain
significant savings.
2. Physician education must be the focus of the program.
Comparative information is a strong tool to foster self-improvement. California peer comparison programs have been effective in educating physicians and helping
them to improve.
3. Programs that provide positive incentives are the
most effective. Medicare’s goal should be to encourage all physicians to participate.
In many communities, Medicare cannot afford to lose primary care physicians.
4. Paramount to a successful program is reliable
data that can be verified.
The data must also be statistically valid based on the
number of patients per physicians.
5. The program must couple utilization and clinical/quality
criteria.
An extremely important and positive component of the California program is that it combines utilization criteria with clinical/quality
measures. Physicians should not be inappropriately incented to withhold preventive
care merely because it would drive up their utilization scores. Physicians
providing more preventive services will have higher utilization, but their
overall hospital costs will be less. This is a major point on which we
disagree with the GAO. Utilization and efficiency cannot be viewed
independent of clinical quality. It is important to note that in California, preventive quality measures are the general focus of all physician profiling
programs and their associated bonus payments.
6. The program must examine the total cost of care
provided to a patient -- facility costs, pharmacy costs and physician services
– for both primary care and specialty care. .
An important component of the California program in which I
participate is that it calculates the total cost of care for each patient. Lower
physician utilization is not necessarily better for the patient and—ultimately—may
not save money. For instance, patients with asthma should see a doctor often
to manage their disease. As physician office visit utilization goes up, the
total cost of care goes down by reducing unnecessary ER visits and
hospitalizations.
On the other hand, many physicians have criticized the profiling
program in which I participate because it is difficult to hold a primary care
physician responsible for the services provided by a specialist to whom they
referred a patient, or a hospitalist caring for a patient upon admission to the
hospital or during home health visits. Primary care physicians cannot control
patient care beyond their practice and, therefore, it is not appropriate to
hold them accountable for such utilization.
The utilization to which a physician is held accountable
requires precise and complex evaluation tools. Nonetheless, the educational
aspects of such information is extremely beneficial.
7. All data must be risk-adjusted for age, sex and
health status.
However, it is important to note that risk adjustment
methods are still inadequate to fully capture differences in patient health
status. Patient compliance issues must also be considered. Most sophisticated
managed care groups in California only do risk adjustment for age and sex. It
is important to note that my IPA attributes four commercial patients to one
Medicare patient.
8. There must be a “stop-loss” type of adjustment
for HIV/AIDS, oncology, maternity, screenings and immunizations, dialysis,
colonoscopy so the costs are spread out across the entire system. It would be
truly perverse to penalize individual physicians for treating seriously ill
patients.
9. Patient Satisfaction Surveys are an important component
of any program.
10. Specialty Referral Issues Must Be Carefully
Considered
The Specialty Referral tracking system in my group is
controversial. The group tracks referrals to specialists and accounts for
those referrals in a physician’s overall score. Some specialty referrals are
more “costly” to the primary care physician than others. In some instances,
referrals to specialists are appropriate and result in lower costs. In other
instances, they may be unnecessary. But some physicians and patients have
questioned whether the specialty referral incentive system has inappropriately
denied patient access to specialists. One positive aspect of the program is
that primary care physicians receive credit for referring patients to
specialists to receive treatments included in the set of clinical/quality
measures. This sort of primary care gatekeeper approach would be extremely
difficult to replicate in the Medicare Fee-for-Service program, where patients
can directly access specialists.
11. Physician-Designed and Directed
Programs that involve clinical utilization and quality information
must be designed and directed by physicians to ensure that the highest quality
care is provided.
12. Demonstration Programs To Protect Patients
For all of the reasons I have discussed, CMA would support
programs that soley focus on confidential education. However, programs that
financially reward certain practice patterns must include safeguards against
incentives that would reward physicians for withholding care to the detriment
of their patients. Therefore, efficiency programs tied to payment should be
tried on a Demonstration basis first.
V. Geographic Variation
One further note, the CMA recommends that the Committee not
only examine practice variations between individual physicians, but also variations
in care between geographic regions. There are dramatic and costly variations
in care across the country. We need to better understand why this occurs
through careful demonstration programs, and work together to reduce inappropriate
differences.
VI. Conclusion
Physician Peer Comparison Programs can work if the emphasis
is on confidential physician education and self improvement. Such programs
must couple both utilization and clinical/quality criteria. They must also
examine the total costs of providing care to patients – physician, hospital and
pharmacy—and should be risk-adjusted.
While the CMA has not officially endorsed peer comparison
programs that tie payment to efficiency, we support the educational aspects of
such programs. If Congress is interested in going one step further by adopting
pay-for-performance based on utilization, we would recommend demonstration
programs. Because of the sophisticated quality and clinical issues, it is
essential that physicians are involved in the design and implementation. Many
safeguards must be included to protect appropriate patient care.
Mr. Chairman and Members of the Committee, I hope this California information will prove helpful to the Committee. On behalf of the California
Medical Association, I thank you for your time. We look forward to working
with you. Thank you.
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