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Pilot Projects Can Show Promise, But Often Come up Short

Joe Cantlupe, for HealthLeaders Media, January 20, 2010

There is much talk—and hope—about pilot and demonstration projects included in both health reform bills. Proponents say the projects can show where to save money while exploring new ideas that affect health plans, hospitals, doctors, and patients.

These projects include plans to provide comprehensive care to insured people at reduced fees and proposals to provide assistance to community hospitals.

Simply put, it's easier to put these projects on Capitol Hill legislative agendas than to carry them out. In fact, the U.S. experience with some of the demonstration and pilot projects has been, to say the least, "challenging," according to the Centers for Medicare & Medicaid Services.

Whether easy or difficult, experts say there are lessons to be learned in implementing demonstration and pilot projects.

Joane H. Goodroe, a senior vice president for innovation for VHA Inc, a Irving, TX-based national network of not-for-profit healthcare organizations, says it is vital that healthleaders review the success of such plans before implementing them.

"The number one thing—these pilots do not do well if the data isn't organized," Goodroe says. "Sometimes the released data look very good, and the results seem to be good, but if you pull back the covers, the data systems were not set up in a detailed enough way in which it should have been—to have all the clinical, utilization and cost data together, right there. … This is definitely hard work."

Goodroe has been involved in putting together a number of what she terms successful "gainsharing" programs, which have been identified by the government as "an arrangement in which the hospital gives physicians a percentage share of certain reductions in the hospital's costs for patient care attributable in part to the physician's efforts."

As Goodroe sees it, under these gainsharing programs, she works to capture data during the course of patient care, measure baseline costs, and identify potential waste areas. Gainsharing is a part of the existing demonstration program landscape in 2010. Under the current Senate health reform bill, expanding"gainsharing demonstration" is proposed, under the title of "Encouraging Development of New Patient Care Models."

While she's excited about the possibility of these projects, Goodroe maintains concern about the process in which some demonstration and pilot projects are conducted. And she isn't the only one with some angst about how projects are put together—so is the Centers for Medicaid & Medicare Services

A year ago, CMS reviewed seven demonstration projects involving 300,000 beneficiaries in 30 programs, related primarily to disease management in fee-for-service Medicare. The programs included provider-based, third-party, and hybrid models. Among them were programs for a coordinated care demonstration; Medicare disease management for the severely chronically ill; disease management for duel eligible beneficiaries; and chronic care improvement.

The demonstrations have been inherently complicated, and therein lies the rub, according to the report prepared by CMS analysts David Bott, Mary Kapp, Lorraine Johnson, and Linda Magnois, who is director of the CMS Medicare Demonstration Group. There are often multiple programs involved with each one, with a different combination of providers, beneficiary populations, geographical areas, and different testing interventions. In addition, most of the program's participants made changes during their period of operations, such as tweaks to outreach and beneficiary assessment.

Noting all these potential obstacles in putting together smooth demonstration projects, the CMS determined that "reducing costs sufficient to cover program fees has proved particularly challenging."

CMS added: "Results from the CMS demonstrations have not shown widespread evidence of improvement in compliance with evidence-based care, satisfaction for providers or beneficiaries, or broad behavioral change."

"Only a few programs have produced financial savings in fees," it added.

Although the CMS carried out the study in 2009, CMS officials say that the work is "still timely today."

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