Public debate over the federal Affordable Care Act has centered on the highly politicized efforts to insure all Americans, but its long-term success hinges on two other goals: how to simultaneously lower the cost of medical care and improve its quality.
Which is why it’s disheartening to learn that Park Nicollet Health Services lost money last year in the latest federal experiment to reward doctors and hospitals that provide high-quality, efficient care — and penalize those that don’t.
The St. Louis Park-based health care provider, which operates Methodist Hospital, lost nearly $700,000 participating in the Medicare Next Generation program because its outlays for the care of nearly 14,000 elderly Medicare recipients were higher than predicted. The 2016 results were published last month by the U.S. Centers for Medicare and Medicaid Services.
Leaders at HealthPartners, the parent organization for Park Nicollet, said they were disappointed but expected better results next year based on what they learned.
“We didn’t enter the program to do it for a year,” said Donna Zimmerman, a HealthPartners senior vice president. “We entered the program with a long view of working with Medicare to change the way care is delivered and provide value to seniors.”
Park Nicollet was part of Medicare’s original Pioneer experiment, which operated with a similar risk-reward structure. And the health system made money in three of those four years. (Allina Health and Fairview Health also took part in Pioneer, making Minnesota a leading state in the effort. Both made money on the program last year.)
Next Generation comes with greater risks and rewards, plus incentives to use telemedicine to increase patients’ access to care and home visits to help patients stay healthy and out of the hospital.
Zimmerman said Park Nicollet discovered in the 2016 results that it was spending more than expected on kidney failure patients. Enrolling them in a medication management program has reduced costs and hospitalizations while improving patients’ health, she said. “If we can keep them out of the hospital, that’s a good thing for everybody.”
The first-year results were based only on financial performance. Next year they will be adjusted with quality-of-care measures such as patient satisfaction surveys and cancer screening rates.
More health systems, including Allina and Fairview, are now taking part in the Next Generation experiment. Many expect permanent changes in the way Medicare pays for care, and they want to be prepared.