On the Season One finale of the Fixing Healthcare podcast, renowned futurist Ian Morrison earned the distinction of being the first guest to utter these four words: “Medicare Advantage for all.”
After five episodes, we thought we’d heard it all. Month after month, we challenged nationally respected healthcare leaders like Eric Topol, David Feinberg and Don Berwick to present a bold plan to fix the medical system. They didn’t disappoint. Their solutions proved distinct, innovative and disruptive.
But for Morrison, whose eyes are always on the future, I expected his solutions to play up new technologies, perhaps AI-enabled robots in place of doctors or drones to courier medications to patients’ homes. Instead, he presented what seemed like a baby step.
“I know you don't want incremental solutions,” Morrison prefaced, “but I would argue that the biggest challenge we have in American Healthcare is getting from where we are to a better future. That migratory path is important.”
Morrison is referring to the “Fixing Healthcare rules” forth at the beginning of each episode.
“We’re not interested in small incremental fixes or simply tradeoffs among cost, quality and service,” guests are warned.
Interestingly, however, as we dug deeper into Morrison’s migratory plan, his solution proved as bold as it was practical. In fact, it might be the most radical idea of the podcast’s entire first season.
An expert on global healthcare systems, Morrison understands the importance of aligning a nation’s healthcare approach with its cultural values and beliefs.
“Medicare Advantage for all reconciles different values with regard to competition and the role of government, but mandates that everybody is in the system and covered,” Morrison said. “I think it is potentially politically sellable.”
Indeed, Medicare Advantage in its current form is that rare platform on which both political parties can stand, although for very different reasons. Were the program to be scaled up – as a national model for care delivery – hospitals would likely find his vision of “Medicare Advantage for all” both appealing and frightening.
Why Hospitals Would Love Medicare Advantage For All
Not to be confused with traditional Medicare, which is a predominantly fee-for-service approach (although the total hospital dollars reimbursed are Diagnosis Related Grouping or “DRG” driven), “Medicare Advantage” is prospectively paid (capitated) with participating health systems receiving an annual fee based on the age and health risk of the patients enrolled.
Under traditional Medicare, doctors or hospitals doing twice as many procedures on the same patient often receive double the revenue. Try that same tactic under a Medicare Advantage approach and the consequences will be quite different: When interventions add little value, its the healthcare system that pays the price. In this way, these two governmentally-funded programs could not be more different.
Yet another notable distinction of Medicare Advantage is the five-star rating program. Hospitals and providers that receive four- or five-star ratings for quality and patient satisfaction are paid more by the government. This creates powerful incentives to provide comprehensive preventive care, screening services and chronic disease management. As a consequence, individuals enrolled in Medicare Advantage tend to obtain better care coordination and superior clinical outcomes.
Were Morrison’s plan broadened in scope to cover the entire American population of 330 million, one could make the case that hospitals would benefit greatly. Rather than being reimbursed retroactively for care, they could negotiate prospectively with health plans for annual payments or event multiyear agreements for a population of patients.
And instead of worrying how to code an admission versus an observation day, or fearing they might violate the “two consecutive midnight rule” or affect their readmission rates, hospitals can simply focus on providing the highest quality care in the most efficient ways. And of course, there’d be no reason under Medicare Advantage for hospitals to swoop in and buy up community physician practices as a means to steer well-insured patients to their facilities.
Why Hospitals Might Hate Medicare Advantage For All
Intrinsic to a Medicare Advantage approach is that integrated care delivery systems have less need for inpatient care. Healthcare organizations that focus on preventive services and achieve superior quality outcomes decrease their utilization by as much as 50%. Theoretically, this would increase available capacity for patients and add revenue. In practice, it would mean that our nation would need fewer inpatient beds and lead to many hospital closures.
And if insurers were paid entirely through Medicare Advantage, they would have major incentives to contract for the most expensive and complex care with only a few “centers of excellence,” thereby negatively impacting specialists in many of today’s community hospitals.
Ultimately, that which would (a) benefit patients, (b) improve quality and (c) lower costs might be a death knoll for many of our nation’s existing inpatient facilities.
During our interview, Morrison addressed that fear by pointing out, “If you change the payment system over time, people can redesign and redeploy assets incrementally to come in line with a system that is more akin to dominance of primary care over specialty care.”
That’s true for the nation’s healthcare system overall, but it’s not how the process looks to the hospital CEO and staff when Medicare Advantage makes their local facility redundant.
Morrison admits the transition will be challenging for many and downright painful for some, but he believes such disruptive changes are inevitable.
In the short run, Morrison’s plan could face still legislative opposition from Democrats who oppose privatizing Medicare and from Republicans who see decreasing entitlements as central to addressing the government’s growing debt.
So, is “Medicare Advantage for all” a viable solution for American healthcare?
We at Fixing Healthcare want to know what you think. We’re asking listeners to vote on the best and boldest healthcare solutions from season one, including whether Ian’s “Medicare Advantage for all” idea should make the list. On the polling page, listeners can share their own ideas for fixing healthcare. Jeremy and I will read the best ones during Season Two, which kicks off in February 2019.
Although each of the guests on our podcast might disagree with the recommendations of the others, all would concur with Morrison’s closing sentiment: America deserves a better healthcare system than it has today.
Fixing Healthcare is a part of the New Books Network (NBN) and a co-production of Dr. Robert Pearl and Jeremy Corr. Join the conversation or refer a potential candidate for “Leader of American Healthcare” by following the show on Twitter @fixingHCpodcast, liking the show on Facebook or visiting the LinkedIn page.
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