Statement for the Record Submitted to the Ways and Means Health Subcommittee Concerning "New Frontiers in Quality Initiatives"

This statement is submitted for the record to the Ways and Means Health Subcommittee hearing entitled, "New Frontiers in Quality Initiatives" on behalf of the American Academy of Family Physicians representing more than 93,700 members throughout the United States.

This testimony includes an overview of the ongoing quality initiatives that the Academy has undertaken. In addition, it introduces as a necessary feature of Medicare quality improvement, a method of supporting the primary care infrastructure required to care for the 80 percent of Medicare beneficiaries with chronic conditions. Family physicians are integral to Medicare quality improvement efforts since the majority of Medicare beneficiaries who identify a physician as their usual source of care report that they have chosen a family physician.

Quality improvement efforts and medical errors research reveal the importance of navigating complex interactions across multiple care settings. Again, family physicians logically perform the role of integrating care for Medicare beneficiaries since they function as patients' usual, ongoing source of health care. Unless financing mechanisms specifically support the role of primary care in integrating care for beneficiaries with chronic diseases, patients' experiences in the current fragmented healthcare system are likely to grow worse. This is particularly true for the two-thirds of Medicare beneficiaries with multiple chronic conditions.

The incidence and prevalence of chronic disease among Medicare beneficiaries, as well as the multiple challenges of treating and managing these diseases and the cost associated with doing so, are well documented. Medicare funds are increasingly directed toward beneficiaries with chronic illness. The Robert Wood Johnson Foundation’s initiative entitled, Partnership for Solutions, estimates that about two-thirds of Medicare dollars go to participants with 5 or more longstanding conditions. This is a startling figure for a program that not only costs taxpayers billions of dollars, but also fosters fragmented care. Additional information from Partnership for Solutions reveals that 66 percent of Americans over the age of 65 currently have at least one chronic condition, and the majority go on to be afflicted with a number of illnesses. Data from the Medicare Standard Analytic File (1999) shows that beneficiaries without chronic conditions saw an average of 1.3 physicians in 1999. Beneficiaries with a single chronic illness saw an average of 3.5 physicians while those with two saw an average of 4.5 physicians. Seniors with six chronic conditions saw an average of 9.2 physicians in 1999. These figures argue for a single primary care physician who can provide cost-effective, integrated care for Medicare beneficiaries who have chosen to have a "personal physician" oversee their care.

The Institute of Medicine (IOM) report, Crossing the Quality Chasm, has documented the performance gap between high quality health care and what is actually delivered in our current fragmented and costly system. The report is clear: "The current care systems cannot do the job. Trying harder will not work. Changing systems of care will." The report urges health payers, including Medicare, to create an infrastructure for evidence-based medicine; facilitate the use of information technology; and align payment incentives around six priorities for care (i.e., safe, effective, patient-centered, timely, efficient, and equitable care). The current system of fragmented, costly and often substandard care is unacceptable for Medicare beneficiaries and financially unsustainable for the Medicare program.

America's family physicians are taking bold steps to change this inadequate system of care. These include major Academy initiatives to:
improve chronic illness care within offices of family physicians by building on the Chronic Care Model that Edward Wagner, M.D. has developed,
reinvent and redesign family physician practices to implement the IOM report, Crossing the Quality Chasm, which set out six aims and 10 simple rules for the 21st century health care system and to ensure that every American has a personal physician (Future of Family Medicine initiative), accelerate family physicians' adoption and utilization of electronic health records (EHRs) and other information technologies in the Partners for Patients initiative, and promote standards that improve the quality of care and patient safety, such as the Continuity of Care Record, a portable electronic format record of clinically relevant health care data.

Family physicians are trained to manage multiple chronic diseases using evidence-based guidelines, patient management tools and information technologies while engaging other specialists and community resources as appropriate. However, the current financing mechanism that supports office-based ambulatory care, including Medicare Part B, is outdated and does not foster optimal care for seniors beset by multiple chronic diseases. The current visit-based reimbursement system has compromised the ability of primary care physicians to serve in the role that they are trained and prepared to deliver. Rather than rewarding care that is more cost-effective, it rewards physicians for ordering tests and performing procedures. Family physicians are not currently reimbursed for the considerable time that they spend with patients in coordinating care and in behavioral counseling to improve patient self-care. There is no direct compensation to physicians nor any systemic incentive for assuring care is organized correctly and integrated in a way that makes sense to patients.

The IOM report, Crossing the Quality Chasm, stresses the need to realign incentives in health care delivery to the promotion of these functions. Providing a funding mechanism that encourages primary care physicians to build ongoing medical relationships with their patients also allows them to promote behavioral changes (i.e., eating right, exercising, quitting smoking and initiating other self-management behaviors). In this way, the earliest and best chronic care is based on sound behavior and lifestyle changes that primary care physicians can encourage.

Effective chronic care management involves:

Performing these functions requires additional time and resources not currently recognized in the existing office-based reimbursement system. However, organizing care in this manner has proven worthwhile. For instance, thirty-nine studies have validated the Chronic Care Model developed by Ed Wagner, M.D., Director of Improving Chronic Illness Care (ICIC) at the MacColl Institute for Healthcare Innovation. Implementation of this model reduces unnecessary subspecialty referrals, contains costs, reduces duplicative care, improves patient satisfaction and results in better health outcomes. The six components of this model are:

In fact, Bodenheimer et al. found that 18 of 27 studies concerning just three chronic conditions (congestive heart failure, asthma, and diabetes) demonstrated reduced costs or lower use of health care services when this Chronic Care Model was fully implemented, almost exclusively in primary care settings.

The AAFP is recommending the use of a chronic care management fee for primary care physicians that would support the implementation of this Chronic Care Model within the Medicare program.

The Academy recognizes the significance of Chairman Johnson's efforts to improve chronic care management through the development of the Section 721 chronic disease management pilot program. The Academy appreciates the Chairman's inclusion of primary care physicians as eligible providers under Section 721.

Sections 649 and 721 of the Medicare Prescription Drug, Improvement and Modernization Act are designed to develop and test innovative and transformative models for chronic disease management. Section 721 is designed to test systems of care that improve health outcomes for Medicare beneficiaries with chronic illnesses. The more limited Section 649 provides the opportunity for CMS to work with physicians more directly through state-based Quality Improvement Organizations (QIO). The Doctors' Office Quality-Information Technology (DOQ-IT) project is an example of such collaboration.

The AAFP is working with CMS officials to ensure that implementation of the pilot project under Section 721 proactively enrolls primary care physicians and provides appropriate financial support to the creation of an integrated system of care based on the Chronic Care Model. In fact, the attendant benefits of the Chronic Care Model cannot be delivered without the inclusion of physician practices. The system of care that Section 721 seeks to create must establish primary care physician offices as the basis for creating systems of care for Medicare beneficiaries with chronic conditions.

The Academy supports a per-beneficiary chronic care management fee that is paid directly to the physician in addition to fee-for-service payments. This fee would be paid to whichever patient-selected physician, who is willing to perform the performing the following activities or functions as well as provide technology support:

The implementation of a chronic care management fee, added to the regular Medicare fee-for-service reimbursement, would encourage the acquisition of medical information technology since the cost of this technology is the single biggest barrier to its implementation. This new reimbursement stream would also ensure that beneficiaries received coordinated, evidence-based medical care while the Medicare program would reap the resulting cost savings.

The Institute of Medicine has identified the improvements in a patient's health associated with a "usual source of care" also described as "a medical home." Care management models using this concept as a way to ensure the six quality characteristics have been successfully employed. For example, Medicaid primary care case management programs that pay primary care physician practices a monthly fee for care coordination responsibilities are meeting with success. Testing a similar model adapted to the needs of Medicare patients who characteristically possess several chronic conditions is a timely and appropriate innovation within the existing Medicare pilot and demonstration projects.