July is an important month in history, with Bastille Day, on July 14, coming just 10 days after our own 4th of July. So what better time to consider issues of justice and equality?
There are lots of different ways to interpret equality: equality of outcomes, equality of opportunity, or perhaps—as an even more complex relative equality—matching of resources to individuals’ needs.
In the context of improving health care delivery to older adults, there are several important examples of these principles of equality in what is called “risk adjustment.” And I find myself with very different reactions to the different kinds.
For example, in the proposed Chronic Care Management benefit, only those Medicare beneficiaries who have two or more chronic diseases and a risk of decline in well-being would be eligible to trigger the payment for care management to their providers. This is an example of matching resources to the needs of the beneficiaries and I find it very appealing, while technically challenging to do the match correctly.
Another, more familiar, example from well before the Affordable Care Act (ACA) is the system whereby the Center for Medicare and Medicaid Services (CMS) pays its Medicare Advantage managed care plans according to the health status of their members, based on the Hierarchical Condition Categories (HCC) system. (For more background, see this National Health Policy Forum (NHPF) paper.)
Until this modification to the program, Medicare managed care plans had substantial incentives to avoid sicker, older adults who would have higher health care costs and to enroll younger and healthier patients. The joke at the time was that advertisements for Medicare managed care plans were mostly found in upstairs rooms of health clubs, where only the fittest would be found.
After HCC, the same pool of money was reallocated so that more money came with beneficiaries who were sicker, making them more attractive to plans and better aligning the interests of CMS, the plans, and the beneficiaries—and, in principle, matching the available resources to the needs of the people being provided care. Not that all is fixed. There is still a serious concern that, because the system is driven by the diagnoses assigned to patients, plans can upcode the seriousness of their beneficiaries’ health problems, thereby increasing payments improperly.
However, there is another kind of risk adjustment that I find much less attractive, related to the different outcomes achieved in different patient populations. The ACA, for example, contains provisions for increasing penalties for hospitals that have relatively high rates of 30-day readmission. Starting low, but increasing over the years, these penalties might reduce a hospital’s overall payments from Medicare by several percentage points—pretty close to the margin between losing or making money for many hospitals.
Many advocates for hospitals feel that the application of these on-coming penalties need to be “risk adjusted” for the pre-existing readmission risk of the population they care for. For example, hospitals that disproportionately serve lower socio-economic-status patients feel that readmission penalties are fundamentally unfair to them because their patients are harder to keep out of the hospital.
In a common example, I’ve heard people working in hospitals that serve a population of patients with low income, few social resources, and weak community services say that holding the hospital responsible for the fact its patients bounce back to the hospital because they may simply be unable to fill their prescriptions is blaming the hospital for something over which it has no control.
I have even heard the notion that levying penalties on these kinds of hospitals is unfair to the patients—a pernicious example of “the poor get poorer.” And it has even been suggested that under this kind of regime, even well-meaning safety net hospitals would have no choice but to avoid serving exactly these kinds of patients so as to avoid the penalties that would come with trying to care for them. (See information on the 2013 NHPF meeting on this very issue.)
So in response to this still fairly hypothetical concern, the other form of risk adjustment is to adjust the target outcomes based on patient characteristics and just accept that there will be a higher rate of readmission for hospitals that serve low socio-economic-status populations.
In fact, our friends at the Society for Hospital Medicine have recently endorsed just such a legislative proposal to remove patients with hard-to-manage conditions such as substance abuse, psychosis, and end-stage reneal disease from consideration in readmission penalties. The proposal also would adjust readmission targets for hospitals depending upon the economic status of their patients, so that hospitals serving poor people would not have to reduce readmissions as much as those serving wealthier populations.
In America, we often say that equality of outcome is impossible and even undesirable, but that equality of opportunity is our ideal. Still, I find this kind of risk adjustment odious. While it may sound like it makes it easier for poor people to get essential hospital care, it is just as true that it makes it possible for hospitals to deliver care that does not meet the needs of the population they ostensibly serve. It undermines incentives to improve care for those to whom it would matter most. It accepts that hospitals are only responsible for what goes on inside their walls and that they have no responsibility to modify what is convenient and conventional practice for them to better meet the needs of their patients.
I can only shake my head when a hospital provider mentions difficulty in medication access for their patients “on the outside,” as if it were an unalterable reality and someone else’s problem. Why do hospitals, the most sophisticated and well-paid part of the health care system, see their responsibility end so definitively at their doors? What would it take for hospitals to discharge patients with an adequate medication supply?
Perhaps hospitals who know that they serve this population should be willing to take risk through managed care plans so as to get the resources and flexibility to allocate resources to services that will do the most good. What would it take for them to learn more about community needs and perhaps even provide leadership for change in order to keep their discharged patients safe and well at home, rather than waiting helplessly for them to come back?
In my view, this kind of risk adjustment of outcome standards as opposed to resource allocation enshrines an unfair and unjust status quo and is not something that should be considered until all other possibilities have been explored. It certainly isn’t something to consider in July.