My previous post outlined some of the key findings of the Brookings Institution case study of the acute care processes in the largest integrated system of care in the United States — eight million members of Kaiser Permanente (KP) in California. Key findings include:
- Unlike other primary care missions, effective population health management for more complex or costly episodes of illness and injury are best managed by teams that are hospital-centric, with resources and strategies designed to improve transitions of care back to community settings.
- Well-aligned strategies and incentives for acute care providers require capital investments — and are not well served by separate, fee-for-service reimbursement for individual physicians and facilities.
- Patient engagement is more effective than punitive co-pays and deductibles to direct younger, healthier members to points of care other than the emergency department (ED) for minor episodes of care.
What are the barriers to implementing better transitions of acute care in the rest of the U.S. system? Despite the many provisions in the Affordable Care Act (ACA) intended to promote accountability, the U.S. healthcare system remains fragmented and poorly aligned. To focus, let’s “disintegrate” three major industries spanning KP to understand their competitors.
Healthcare Organizations and Networks
Historically, the insurance industry approached healthcare like other forms of liability coverage. Major competitors to KP were unlikely to provide healthcare services, just as auto insurers didn’t do body repairs for holders of their collision coverage products. Most America’s Health Insurance Plans (AHIP) members protect their own profitability by making contracted providers bear the burden of delivering healthcare.
On the margins, this is beginning to change as AHIP members like United Healthcare begin to acquire physician groups to more exclusively manage covered services. AHIP members also agree with the findings of a recent Yale study that shows their costs for hospital services in some regions are higher due to facilities consolidating into a handful of systems with significant market share.
Unlike scheduled care, where facilities have better prospects of matching resources, services and payments, emergency care under the Emergency Medical Treatment and Active Labor Act (EMTALA) still resembles a mandate more than a marketplace.
Rather than eliminating EMTALA, the ACA actually strengthened safeguards to prevent patient dumping as reforms unfold. Any local resident can refer themselves for care in EDs without prior authorization, and hospitals participating in Medicare have little choice but to provide services within their capability, including hospitalization. In nearly two dozen states that have chosen not to expand Medicaid as the ACA allows, this burden can amount to 25 percent of the patients in their service area. Medicaid payments for hospital care are structurally inadequate. Medicare payments for hospital care are challenging for those beneficiaries with the multiple medical conditions most likely to result in admission from the ED. And private plans try to pit hospitals against each other for more favorable contracted rates.
Regardless of specialty, most physicians in most provider groups remain incentivized to be productive under fee-for-service systems. Most primary care providers balance professional lifestyle and payment by seeing patients in fully scheduled blocks, while increasingly deferring to hospital-based providers for inpatient and after-hours care.
Studies have confirmed the common refrain of patients: primary care providers are seldom available for unscheduled care for new episodes or injuries. The last few years have seen rapid growth in urgent care clinics, mostly targeting episodic conditions that require limited ancillary resources — and ambulatory patients focused on convenience and price.
What Does It All Mean?
The usual blame game between stakeholders in healthcare reform won’t speed the way to better acute care beyond KP. In an era of increasing accountability, stakeholders who don’t call "the pit" home need to acknowledge that most EDs provide several essential community services. Regional staging areas for life-threatening conditions also provide safety net care for vulnerable populations. EDs providing ambulatory, episodic care for insured patients also serve as public health outposts, expected to provide surge capacity in major disasters. Patients with behavioral health emergencies are boarded alongside elderly patients with chronic diseases deemed too complex for community settings.
None of this should come as a surprise. Access to emergency care and hospitalization was protected in federal law (EMTALA) 24 years before enactment of the ACA. Subpopulations frequently using the ED for “non-emergencies” are reflections of special needs going unmet elsewhere in our system. Each subpopulation will require its own solution. Providers and payers will need to develop patient-centered formulas for adding value to the broader system, rather than attributing them all to “inappropriate” ED care.