Health Reform Pilot Projects Look to Transform Healthcare

There are more demonstration projects than pilot projects in the healthcare reform bills being considered by the House and Senate. The difference between the two is: Demonstration projects are slated for a limited period of time whereas pilot projects can be "scaled up" without congressional action if deemed successful for a system-wide approach, says Jost.

Generally, the proposed mechanism to streamline projects envisioned in pilot and demonstration programs in Medicare especially are among the actions that can make medical care more efficient, says Karen Davis, president of the Commonwealth Fund.

Jost and Davis, in separate interviews, described the bundling program and others, such as accountable care organizations, as significant triggers for potential savings.

"I know there is skepticism that it will save a bunch of money, but if you have a bundled fee, you wouldn't unnecessarily run through 10 specialists, for example," said Davis. "To me, those are pretty powerful financial incentives."

Another supporter of the pilot programs, Autul Gawande, a surgeon and writer, has noted in The New Yorker that the pilot programs can serve to correct and reform the healthcare system.

"There is a pilot program to increase payments for doctors who deliver high-quality care at lower cost, while reducing payments for those who deliver low-quality care at higher cost," Gawande wrote in The New Yorker. "There's a program that would pay bonuses to hospitals that improve patient results after heart failure, pneumonia and surgery.

"Which of these programs will work? We can't know," Gawande wrote. "But, in the end, it contains a test of almost every approach that leading health-care experts have suggested."

But Joseph White, director of the Case Western University Center for Policy Studies, says he isn't sure about the potential of pilot programs. "Some people will say they will work eventually. I would suggest we've tried many—and many aren't working. It doesn't follow that if there's a pilot that it will automatically work," White says.

Paying for performance, for instance, "is close to hopeless and a dream world," White says, referring to a concept that specifies healthcare providers are rewarded for meeting established delivery targets instead of fees for services.

Pay for performance was evaluated in a series of demonstration projects that began in 2003 and is now being considered under the bills in Congress under a different name: value based purchasing.  In one of the projects—known as the Premier Hospital Quality Incentives Project—250 hospitals in 33 states were evaluated, and it was determined that "transparency plus payment incentives works," says Blair Childs, senior vice president of public affairs for the Premier Health Alliance, a sponsor of the program.

"How can you be against testing ideas?" Childs asked. "That's only way we're going to make healthcare work."