Want to know the future of Obamacare? Take a look at Fort Dodge, Iowa.

April 17, 2013

Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.


Downtown Fort Dodge, Iowa (Bill Whittaker)

If you want to know what the future of Obamacare looks like, Fort Dodge in north central Iowa might be a great place to start.

The city has a population of 25,136 and a median income of $38,015. It is apparently named after a Wisconsin senator, which seems a bit strange for a city in Iowa. But most pertinent to the Affordable Care Act, Fort Dodge is one of the 32 sites across the nation  testing out the health law's vision for moving Medicare from a program that pays for volume to one that pays for value.

Right now, most Medicare payments are paid on volume; doctors get a set fee for each surgery they complete and patient they see. This can create some messed-up incentives for hospitals, which tend to make more if their patients are sicker and spend more time in treatment.

One study I wrote about yesterday found that a hospital earns nearly twice as much on a patient who has a surgical complication vs. one who has a perfectly routine procedure.

In Fort Dodge, this is changing. UnityPoint Health (which was, until this week, named Iowa Health System) is one of the 32 Pioneer Accountable Care Organizations that volunteered to have part of their Medicare payments tethered to a set of quality metrics.

While UnityPoint has hospitals across the state, it decided to focus its ACO effort on a relatively small segment of its population to limit the health system's exposure to the possibility of losing money on the endeavor.

"If we completely missed the mark, we knew it wouldn't be disastrous from a financial standpoint," UnityPoint President Bill Leaver said. "We knew it wouldn't be overwhelming, but a good size to start with."

The Pioneer ACOs launched Jan. 1, 2012, and for the first year, the program only required them to report quality metrics. Their payments would not yet depend on how well they met 33 measures.

The most difficult part of preparing to move to a system that pays for value rather than volume in Fort Dodge was asking doctors to rethink how they do their jobs. They would be encouraged to delegate relatively routine care, for example, to other advanced practitioners, while focusing their own work on care management.

"That is harder work than we thought," Leaver said. "For physicians, they run the office and they're the captain of the ship. Instead of seeing a strep patient now, you might have other people working for you that you're going to deploy."

Overall, Leaver describes his experience with the ACO Pioneer program as "generally positive." What he likes most about the program is that, when the hospital gets a lump sum for each patient, it has more control over treatment. The health system can prescribe treatments that Medicare would not traditionally reimburse.

In its ACO, UnityPoint has come to use a lot more in-home health care, which Medicare will usually only cover if the patient is home-bound.

"Under the pioneer ACO, we can provide home care when we believe the patient will benefit from home care," Leaver said. "We can keep them at home and not have to wait til something life-threatening happens to start that. The more liberal deployment of home health care has been very helpful."

The health system has also changed its 24-hour nurse hotline, giving the phone operators access to a patient's files. Instead of just dispensing advice, these nurses can look up the patient's physician, even schedule an appointment — and note the phone call in the doctor's file.

"If you're Dr. Jones's patient and you have an emergency, the call center will have your chart right in front of them and have the physician's information as well," Leaver explained. "The nurse can make a note for the doctor about what happened in the call and why the patient is coming in."

At the same time, Leaver does have some frustrations with the program. His health-care system was among dozens that recently sent Medicare a letter asking the federal government to delay plans to move the program from pay-for-reporting to pay-for-performance in 2013. That issue, according to Leaver, is still in negotiations.

Leaver also has concerns about difficulty accessing data on how well his system is performing — whether they're hitting the metrics they need to — in a timely matter.

"We want to be able to know, when we tried that change three months ago, what happened?" Leaver said. "Having data in a timely fashion really drives our change process. Right now, we're hopefully just about to get data on the third quarter of 2012. We need better turn around."

From what data UnityPoint does have, Leaver knows that emergency department visits have declined since the ACO experiment started. Re-admissions have also dropped, mirroring a national trend. Data on whether the this ACO has reached the Holy Grail and reduced costs are "still being evaluated."

Leaver does not, for his part, expect the savings to be giant. "We didn't go into this with the expectation that we'd make a ton of money," he said. This mirrors what other leaders at Pioneer ACOs told me about a year ago — that these models might drive down costs in the long run but not produce an immediate windfall.

Leaver is thinking about the long run, too. In much the same way the Pioneer ACO program is the federal government's experiment to see whether it can move the system from paying for value instead of volume, UnityPoint sees it as a pilot project for his own system. He could see scaling the approach to the private insurance plans he works with, for example.

"We looked at the Pioneer ACO not as diving in the deep end of the pool, but an experiment in an environment that's manageable," he said. "We plan to move much further in this direction over the next couple of years."

KLIFF NOTES: Top health policy reads from around the Web. 

A labor union has reversed its support for Obamacare. "A labor union representing roofers is reversing course and calling for repeal of the federal health law, citing concerns the law will raise its cost for insuring members. Organized labor was instrumental in getting the Affordable Care Act passed in 2010, but more recently has voiced concerns that the law could lead members to lose their existing health plans. The United Union of Roofers, Waterproofers and Allied Workers is believed to be the first union to initially support the law and later call for its repeal." Janet Adamy in the Wall Street Journal. 

After squeaking through the House, Arkansas' Medicaid expansion bill heads to the state Senate. "The Arkansas Senate is expected to take up the appropriation for the "private option" bill this morning, with a super-majority needed to accept the federal money to enact the plan. Sen. Jason Rapert and Sen. Jeremy Hutchinson are expected to vote for it, putting the count one shy of the needed 27 (24 voted for the enabling legislation last week)." David Ramsey in the Arkansas Times.

Boston's top-notch hospitals put their disaster training to the test. "Staff at Boston Children’s Hospital donned masks and yellow gowns meant to protect against biohazards, and, because so little of their faces were exposed, attached colored stickers with their titles: Attending surgeon. Social worker. Respiratory specialist. As first responders loaded patients into ambulances on Boylston Street, four teams gathered around empty beds in the emergency department. Then they waited."  Liz Kowalczyk, Kay Lazar and Chelsea Conaboy in the Boston Globe.

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Brad Plumer · April 17, 2013