It is hard to argue that health systems and physicians contemplating taking on the challenge of moving to value-based reimbursement for Medicare beneficiaries have a lot to swallow in the next few years — eating the proverbial elephant. While the standard advice on how one might eat an elephant is to take one bite at a time, I am suggesting that it matters a great deal where you start this task as well as the order in which you take your bites.
Bite One: Find out who is spending the most Medicare dollars
Medicare beneficiaries can be divided into high cost and low cost with the high cost further divided into the frail elderly and those with four or more chronic conditions. The following table illustrates the distribution of beneficiaries between the categories and the defining characteristics of each segment.
In order to complete this bite, you have to be able to find these individuals and engage them in changing aspects of their care in order to change the likely course of their medical conditions.
The Frail Elderly are the most expensive individuals and easiest of all to find — just walk down the halls of area nursing homes and check who is using area home support services because these individuals either reside in a nursing home or some other form of supportive group residence or they are living with a family care giver and supported with home services and or an adult day center. You can also examine emergency room claims for your elderly frequent fliers to further identify this highest cost group. Also, pharmacy claims data can help to identify this group by finding those individuals that are on five or more medications for chronic conditions associated with frailty. Engaging them is a matter of making primary care readily available to them or their care givers by integrating primary care into their place of residence or the programs that support and service them on a regular basis like adult day services.
The High Cost group can most easily identified by looking at those Medicare beneficiaries who are seeing a primary care physician more than four times a year, seeing more than three physicians a year or have four or more actively treated chronic conditions. All of this information can be collected from primary care medical records. Greater concentrations of these individuals are likely to be found in subsidized housing for the elderly because of the lifelong stresses associated with low income as well as the fact that low income individuals are more likely to not have had preventive care earlier in their life and more undiagnosed chronic conditions because of poor access to primary care and lower levels of adherence to treatment for diagnosed chronic conditions. Patient Centered Medical Homes designed specifically to meet the needs of older adults seem to be the most successful model at engaging this group of elders in improving their self management and treatment adherence.
Low Cost Medicare beneficiaries are the hardest of all to find because in general they are fully functional and at most have two chronic conditions and may have none. The best way to identify this group is to say that it is everyone over 65 that is not identified as
Frail or High Cost.
Bite Two: Change the factors that make frail and high cost individuals expensive
Frail Elderly
Frail elders often experience unplanned medical hospital admissions because of acute infections, destabilization of medical conditions from poor adherence to medications and treatment as well as medication side effects or complications. Many of these admissions can be prevented by having care givers be hyper vigilant about changes in mental and physical condition and having easy and immediate access to primary care to diagnose and treat emerging acute conditions and make adjustments to treatment to stabilize chronic conditions as well as having a pharmacy management program that can rationalize complex treatment plans from multiple physicians.
High Cost
High cost elders also have a significant number of avoidable hospital admissions related to poorly managed chronic conditions as well as significant outpatient diagnostic and treatment expenses. Often these individuals have had their conditions diagnosed but they are not adherent to treatment as well as have low rates of success of healthy lifestyle change. A variety of approaches including patient centered medical homes, nurse-driven chronic condition management programs and patient-to-patient social networking models have been shown to increase treatment adherence and lifestyle change success and subsequently better outcomes at lower costs.
Since yearly mortality rates for the Frail Elderly and High Cost groups are fairly high and over 27 percent of Medicare beneficiaries die in hospitals, end of life management is a significant issue to address in order to produce better outcomes and lower costs. Numerous studies show that informed patients and families will more often than not choose less intensive care at the end of life. One study of an integrated approach to care for the elderly reduced deaths in hospitals to less than 6 percent.
Treatment goals for the Frail Elderly and High Cost group are to slow or prevent progression of chronic conditions. A number of examples show that this can best be accomplished by creating specialized care systems that use a person centered approach with easy access to primary care. Such a system need only involve a small subset of the medical staff and make broad use of nurse practitioners and physician assistants to provide much of the care and access.
Bite Three: Improve preventive care for low cost beneficiaries
The Low Cost group is not only harder to identify but also are harder to engage. Their unplanned hospital admissions are often related to acute onset of serious chronic illness, many times undiagnosed or undertreated or from injury or trauma. These individuals often do not see physicians on a regular basis and when they are diagnosed with a chronic condition may not adhere to treatment or lifestyle change because they are generally feeling fairly well. This group needs a twofold approach – restructure physician care into patient centered medical homes and create integrated systems of care with specialists and hospitals "medical neighborhoods" and use community-based programs to educate and motivate population wide improvements in health habits and treatment adherence.
Both of these are large multi-year projects that will require significant resources and take time to develop. Bite One and Two will produce cost savings and experience in population health management while you take on the longer range task of redesigning care.
While these are pretty ambitious bites for any organization, taking this approach should help you sequence your work and prepare your organization for long term success in managing Medicare risk arrangements as well as lay the ground work for managing medical cost risk for commercial populations. Remember; just take one bit at a time.
Dr. Barber is a lead consultant with Barlow/McCarthy, a consulting firm with expertise in hospital- physician relationship strategy. He can be reached at 513-543-9975 or by email at mbarber@barlowmccarthy.com.
Bite One: Find out who is spending the most Medicare dollars
Medicare beneficiaries can be divided into high cost and low cost with the high cost further divided into the frail elderly and those with four or more chronic conditions. The following table illustrates the distribution of beneficiaries between the categories and the defining characteristics of each segment.
| Category and Percentage of Medicare Beneficiaries | Percentage of Medicare Costs | Characteristics |
| Frail Elderly Beneficiaries 5% |
43% |
Institutional residents or caregiver-dependent in the community Five or more chronic conditions Polypharmacy Very vulnerable to medical errors and fragmented care often leading to a decrease in functional ability Poverty is common and is eligibility for Medicaid Limited lifespan of 2.5 years on average End of life preferences often not recognized or honored |
High Cost Beneficiaries 20% |
42% | Community dwelling One to five significant chronic conditions Fragmented chronic condition management and poor adherence to treatment May be primary care giver to a frail elder family member May have a lifespan >10 years |
| Low Cost Beneficiaries 75% |
15% |
Community dwelling One to three stable or early stage chronic conditions Lack of primary prevention Poor adherence to treatment and lifestyle change Very mobile May have a lifespan >20 years |
In order to complete this bite, you have to be able to find these individuals and engage them in changing aspects of their care in order to change the likely course of their medical conditions.
The Frail Elderly are the most expensive individuals and easiest of all to find — just walk down the halls of area nursing homes and check who is using area home support services because these individuals either reside in a nursing home or some other form of supportive group residence or they are living with a family care giver and supported with home services and or an adult day center. You can also examine emergency room claims for your elderly frequent fliers to further identify this highest cost group. Also, pharmacy claims data can help to identify this group by finding those individuals that are on five or more medications for chronic conditions associated with frailty. Engaging them is a matter of making primary care readily available to them or their care givers by integrating primary care into their place of residence or the programs that support and service them on a regular basis like adult day services.
The High Cost group can most easily identified by looking at those Medicare beneficiaries who are seeing a primary care physician more than four times a year, seeing more than three physicians a year or have four or more actively treated chronic conditions. All of this information can be collected from primary care medical records. Greater concentrations of these individuals are likely to be found in subsidized housing for the elderly because of the lifelong stresses associated with low income as well as the fact that low income individuals are more likely to not have had preventive care earlier in their life and more undiagnosed chronic conditions because of poor access to primary care and lower levels of adherence to treatment for diagnosed chronic conditions. Patient Centered Medical Homes designed specifically to meet the needs of older adults seem to be the most successful model at engaging this group of elders in improving their self management and treatment adherence.
Low Cost Medicare beneficiaries are the hardest of all to find because in general they are fully functional and at most have two chronic conditions and may have none. The best way to identify this group is to say that it is everyone over 65 that is not identified as
Frail or High Cost.
Bite Two: Change the factors that make frail and high cost individuals expensive
Frail Elderly
Frail elders often experience unplanned medical hospital admissions because of acute infections, destabilization of medical conditions from poor adherence to medications and treatment as well as medication side effects or complications. Many of these admissions can be prevented by having care givers be hyper vigilant about changes in mental and physical condition and having easy and immediate access to primary care to diagnose and treat emerging acute conditions and make adjustments to treatment to stabilize chronic conditions as well as having a pharmacy management program that can rationalize complex treatment plans from multiple physicians.
High Cost
High cost elders also have a significant number of avoidable hospital admissions related to poorly managed chronic conditions as well as significant outpatient diagnostic and treatment expenses. Often these individuals have had their conditions diagnosed but they are not adherent to treatment as well as have low rates of success of healthy lifestyle change. A variety of approaches including patient centered medical homes, nurse-driven chronic condition management programs and patient-to-patient social networking models have been shown to increase treatment adherence and lifestyle change success and subsequently better outcomes at lower costs.
Since yearly mortality rates for the Frail Elderly and High Cost groups are fairly high and over 27 percent of Medicare beneficiaries die in hospitals, end of life management is a significant issue to address in order to produce better outcomes and lower costs. Numerous studies show that informed patients and families will more often than not choose less intensive care at the end of life. One study of an integrated approach to care for the elderly reduced deaths in hospitals to less than 6 percent.
Treatment goals for the Frail Elderly and High Cost group are to slow or prevent progression of chronic conditions. A number of examples show that this can best be accomplished by creating specialized care systems that use a person centered approach with easy access to primary care. Such a system need only involve a small subset of the medical staff and make broad use of nurse practitioners and physician assistants to provide much of the care and access.
Bite Three: Improve preventive care for low cost beneficiaries
The Low Cost group is not only harder to identify but also are harder to engage. Their unplanned hospital admissions are often related to acute onset of serious chronic illness, many times undiagnosed or undertreated or from injury or trauma. These individuals often do not see physicians on a regular basis and when they are diagnosed with a chronic condition may not adhere to treatment or lifestyle change because they are generally feeling fairly well. This group needs a twofold approach – restructure physician care into patient centered medical homes and create integrated systems of care with specialists and hospitals "medical neighborhoods" and use community-based programs to educate and motivate population wide improvements in health habits and treatment adherence.
Both of these are large multi-year projects that will require significant resources and take time to develop. Bite One and Two will produce cost savings and experience in population health management while you take on the longer range task of redesigning care.
While these are pretty ambitious bites for any organization, taking this approach should help you sequence your work and prepare your organization for long term success in managing Medicare risk arrangements as well as lay the ground work for managing medical cost risk for commercial populations. Remember; just take one bit at a time.
Dr. Barber is a lead consultant with Barlow/McCarthy, a consulting firm with expertise in hospital- physician relationship strategy. He can be reached at 513-543-9975 or by email at mbarber@barlowmccarthy.com.
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