Buried in the healthcare reform bill are dozens of pilot and demonstration projects that may become a permanent part of the healthcare landscape. While proponents say the programs can reduce overall costs, skeptics argue that pilot programs hardly ensure success.
A key pilot program plan is proposed expansion and revisions of a national Medicare pilot program for bundled payments. Under bundled payments, doctors and hospitals are paid for all services of a patient in care, thus receiving a fixed amount per month or year for all covered services.
While the idea is to improve quality and control costs, as far as some physicians are concerned, bundling is bungling.
"Bundling is one of those double-edged things," says Patrick Torcson, MD, director of hospital medicine at St. Tammany Parish Hospital in Covington, LA, and chairman of performance and standards for the Society of Hospital Medicine. The concern on the part of physicians is that the partnership between physicians and hospitals in a private practice setting could result in inequities and physicians short changed."
Supporters of the voluntary pilot programs and demonstration projects say the federal proposals can potentially give the healthcare system a chance to evaluate the success or failure of them without needless expense.
"Most of them are pretty small budgets," says Timothy Jost, a law professor at Washington and Lee University, adding the government can spend $5 million on a pilot to get people healthy rather than spending $1 billion on established programs that don't work.
Besides the bundling program, other pilot or demonstration projects in health reform include:
A pilot program for continuing care hospitals, which combine rehabilitation, skilled nursing facility, and long-term services with acute care.
Further extension of the rural community hospital demonstration project.
A study, which would be followed by a demonstration project, that focuses on revising the home health prospective payment system to assure access to care and accommodation of patient severity of illness.
A demonstration project that involves shared savings and independence of home medical practice.
A three-year demonstration profit for 10 states to provide comprehensive care to the uninsured at reduced fees.
According to Torcson, the pilot projects generally are an improvement over a "large scale social experiment." He noted that "part of Medicaid itself was formed as a result of pilot projects—nine years of demonstration projects and tweaking from 1983. Pilot programs and demonstration projects moved things along."
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."
Although the House and Senate negotiators are still hammering out their plans for healthcare reform, lawmakers and healthcare stakeholders are playing a numbers game: carefully eyeing when specific projects are to be implemented and gauging how they can meet the deadlines.
As far as healthcare leaders are concerned, meeting some of the timelines—especially for 2010—may be, in the words of one, "challenging."
Under the proposed healthcare reforms before the House and the Senate, both have differing expectations, as well as differing deadlines, with some to take effect this year and others to continue through at least 2018.
"Changes that take effect in 2010 need to be carefully rolled out to avoid disruption for those with existing coverage," says Tom Epstein, vice president for public affairs, Blue Shield of California.
Epstein says Blue Shield of California, similar to other insurers, are taking steps internally to prepare for the changes.
"Some deadlines may change as a result of the negotiations that are currently underway," Epstein says. "We are forming a broad-based reform implementation group this month to begin planning for transition."
If Congress passes health reform soon, some changes may be implemented in 2010 under the legislative proposals. The plans for relatively quick implementation include:
Provisions to prohibit health insurance rescissions when a person gets sick
New limits on pre-existing condition exclusions
Proposals to prohibit insurance companies from placing lifetime caps on coverage
Creation of new long-term care programs
Creation of a health benefits advisory committee
A $5 billion fund to finance an immediate temporary insurance program for those who are deemed uninsurable because of pre-existing conditions
Proposals for incentive payments to states that enact alternative medical liability laws
The "reforms scheduled for 2010 may be challenging," Epstein said. He adds, however, "we should be able to meet the deadlines for reforms that take place in 2013 or 2014. From an operational perspective, there is little difference between 2013 and 2014."
Diane Boyle, vice president of the National Association of Insurance and Financial Advisors, says NAIFA has concerns about reforms implemented this year because "we have lots of policies in place and no room for adjustments." The NAIFA has actively opposed proposed amendments to repeal long-standing provisions of the McCarran-Ferguson Act related to health and medical malpractice insurance.
Inevitably, as healthcare leaders prepare for changes that may be imposed, "timing will depend on conference and any agreements between the House and Senate on their respective bills," says Matt Fenwick, senior associate director for the American Hospitals Association (AHA). "If/when an agreement is reached, we will work with our members to understand what they need for any transition," he says.
In a Jan. 7 letter to Senate Majority Leader Harry Reid, D-NV, and House Speaker Nancy Pelosi, D-CA, the AHA said it strongly urged conferees to adopt some earlier implementation dates in the House proposal as opposed to the Senate version. Major provisions of the House bill would take effect in 2013, while those in the Senate version would go into effect a year later under the proposals.
For instance, the Senate version of the health plan staggers the implementation of reforms, such as prohibition on coverage of those with pre-existing conditions and lifetime and annual limits—until 2014. "While covering the uninsured is a crucial element of health reform, it also is critical that already insured people are able to keep their coverage," the AHA said in the letter. "Insurance market reform is the area where the greatest consensus lies."
Under the House bill, insurance plans in existence before 2013 would have five years to adopt new requirements to tighten them, while the Senate would exempt such plans from the new rules.
The dates of implementation are among the topics being discussed in the Capitol. "To the extent there are differences between the Senate and House, they are still up for discussion," says Stephanie Lundberg, spokeswoman for House Majority Leader Steny Hoyer, D-MD.
By 2019, there will still be millions of people uninsured in the U.S. regardless of the legislative outcome in Congress, according to the Congressional Budget Office. How many vary by the reform proposal. Under the Senate plan, there will still be 23 million uninsured. The House proposal would cover 5 million additional uninsured people, leaving 18 million uninsured in 2019, according to the CBO.