Medicare Declares Major Success in Project Treating Costly Chronic Disease

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One out of four senior citizens in Medicare suffers with five or more chronic conditions and they account for 68 percent of Medicare spending. Medicare declared yesterday that all participating physician groups participating in a demonstration project aimed at better managing the health care of those with these chronic conditions have improved the clinical management of diabetes patients in the first year of the three-year Medicare Physician Group Practice (PGP) Demonstration. Diabetes is a major chronic disease among seniors.

Under the demonstration, which began April 1, 2005, physician groups continue to be paid on a fee-for-service basis and have the opportunity to share in savings generated from enhancements in care management, says the Centers for Medicare & Medicaid Services.

A total of 223,893 Medicare patients were assigned to the ten physician groups in performance year 1 which ended March 2006.

All ten of the participating physician groups – Billings Clinic, Everett Clinic, Dartmouth-Hitchcock Clinic, Forsyth Medical Group, Geisinger Clinic, Middlesex Health System, Marshfield Clinic, Park Nicollet Health Services, St. John’s Health System, and the University of Michigan Faculty Group Practice – achieved benchmark or target performance on at least seven of the ten diabetes clinical quality measures. Two physician groups — Forsyth Medical Group and St. John’s Health System – met all ten benchmarks.

One of the unique features of this demonstration is that physician groups have the flexibility to redesign care processes for patients with chronic illness and complex health care needs, as well as invest in care management initiatives.

“Twenty-three percent of beneficiaries have five or more of the chronic conditions that account for 68 percent of Medicare spending. They see an average of 11 physicians and fill 50 prescriptions a year. Creating payment incentives that can lead to better patient outcomes and lower total costs is the right thing to do,� CMS Acting Administrator Leslie V. Norwalk said.

This helps Medicare beneficiaries maintain their health and avoid further illness and admissions to the hospital at no additional cost and with no reductions in benefits. If these efforts save money for the Medicare program, the physician groups are able to share in a portion of those savings.

As a result, in addition to the quality improvements across all groups, two groups – Marshfield Clinic and University of Michigan Faculty Group Practice – earned performance payments for quality and efficiency of $7.3 million as their share of the $9.5 million in savings to the Medicare program.

University of Michigan Saves Medicare $3.5 Million

The University of Michigan Faculty Group Practice reports saving Medicare $3.5 million, while being able to significantly improve both the quality and efficiency of care that Medicare beneficiaries received at its hospitals and health centers.

The U-M Faculty Group Practice, which includes all the physicians on the U-M Medical School faculty who treat patients at U-M facilities, achieved 95 percent of its targets for providing specific, proven treatments and preventive measures to people with diabetes.

In addition, UMHS improved care for its Medicare patients with many other types of chronic diseases, especially those who may have more than one disease, by redesigning care to enhance coordination and efficiency. Working together, the FGP and the U-M Hospitals and Health Centers developed and implemented programs that not only contributed to better care, but also saved Medicare money.

“Defining the best way to practice medicine for our patients is advancing from theory to a proven reality, as this project demonstrates. Now we have a year of data from CMS to show that doing the right thing for our patients is win-win. I’m looking forward to more validation in coming years for redesigning patient care processes to improve clinical quality,� says David Spahlinger, M.D., FGP executive medical director.

The PGP Medicare Demonstration project provided an opportunity to share in the savings resulting from more efficient and effective care delivery. As a result, UMHS saved Medicare $3.5 million in savings the first performance year, from April 1, 2005 to March 31, 2006, largely from inpatient Medicare expenditures. Under a CMS formula, UMHS will be able to keep $2.7 million of these savings.

“We proved that you don’t have to reduce the quality of care to cut Medicare costs. We actually added services at no cost to patients or payers,� says Caroline Blaum, M.D., the U-M geriatrician who is leading the project. “For our many Medicare patients with diabetes, we have scientific, evidence-based quality indicators that demonstrate the high quality of care provided by the U-M FGP.�

Several programs were redesigned, enhanced, or created for the first year of the project including:

â—? Diabetes Quality Program: This program uses the UMHS electronic medical record system to provide individual physician/provider feedback on the quality of care for their patients with diabetes, often at the point of service. This allows the physician and patient to quickly see where there is a quality problem and correct it.

� Transitional Care Call-back Program: Nurses, dubbed by some as ‘care traffic controllers,’ call patients and caregivers within 24 hours of a patient’s discharge from the emergency department and hospital, helping them to understand post-discharge instructions and to solve problems such as keeping the next appointment, understanding medications, getting a test or procedure, or finding transportation.

â—? Chronic care coordination: Social workers and nurses work with physicians to assist patients who have multiple risks, multiple chronic diseases, and complex health status.

â—? Pharmacy-facilitated discharge: A clinical pharmacist visits patients before discharge from the hospital to coordinate hospital medications with the medications the patient was taking before hospitalization, and to teach about medications and their benefits and side-effects.

â—? Heart failure telemanagement program: Nurses work closely with patients and cardiologists to teach patients to manage their heart failure by modifying life-style and adhering to complex medical regimens.

Other initiatives have been launched since that first year concluded, and their impact will be seen in the data from subsequent years that will be released in future, the Michigan group reports.

While patients with chronic conditions benefited from UMHS’s redesigned care coordination, only data from beneficiaries with diabetes was used in the calculation of quality. In the coming years, heart failure, coronary artery disease, hypertension and preventative services quality measures will be added.

A total of 20,505 Medicare beneficiaries who receive most of their health care at the UMHS were “assigned� to U-M as part of the PGP demonstration project during the first performance year.

Approximately 20 percent of those patients have diabetes. Because U-M is a tertiary referral center, nearly 20,000 other Medicare patients were seen only for referral and were not considered part of the Medicare Demonstration Project.

The UMHS Faculty Group Practice is one of ten participants in the PGP Demonstration Project, and the only one in Michigan. It was chosen for several reasons including demonstrated success in chronic care management, diabetes quality, and organizational structure.

The Faculty Group Practice is the unit within the Medical School through which the faculty provide clinical services to patients within the University of Michigan Health System. There are more than 1,200 physicians within the Faculty Group Practice. The Medicare Demonstration Project will last until March 31, 2008, but may be extended.
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