OK to Limit Medicare Provider Choices, but Don't Cut Benefits

Focus Groups Weigh In on Ways to Trim Medicare Costs

September 26, 2014 04:52 pm Michael Laff Washington –

Mindful of the possible political consequences, as a rule, elected officials avoid making difficult decisions about Medicare, so one group of researchers decided to grant participants in a series of focus groups that authority to see what they would decide.

During an event at the American Enterprise Institute, Kavita Patel, M.D., of the Brookings Institution, and Robert Moffit, Ph.D., of the Heritage Foundation, discuss results of a survey that asked participants how to reduce Medicare costs.

The results offer a window into what a cross-section of one state's population views as essential for the program to maintain versus what those residents would be willing to give up.

Program Background and Findings

The Center for Healthcare Decisions (CHCD), in partnership with LeadingAge California and other nonprofit organizations in the state, established the California Medicare CHAT Collaborative (MedCHAT) to promote thoughtful discussion about the future of Medicare. With that goal in mind, MedCHAT created a computer-facilitated discussion tool based on a software program -- Choosing All Together, or CHAT -- developed by the University of Michigan and NIH. The MedCHAT tool is designed to get users to think strategically about rising Medicare costs by challenging them to evaluate the program based on cost and coverage options.

During a recent event at the American Enterprise Institute, CHCD Director Marjorie Ginsburg, M.P.H., shared results(www.aei.org) from 82 group sessions MedCHAT conducted between May 2013 and May 2014. In the sessions, participants were asked to evaluate Medicare costs from a public policy perspective rather than thinking simply about their own individual care. A total of 810 California residents participated in the sessions(chcd.org), two-thirds of whom were younger than 65.

Story highlights
  • A large majority of participants in a recent survey said that Medicare beneficiaries should be subject to more limited networks of provider choices.
  • Survey participants did not want to reduce payments to physicians.
  • Panelists agreed that costs for treatments with a low chance of success for critically ill patients need greater control.

Overall, participants did not choose to cut benefits but opted instead for increased restrictions regarding how and when those benefits would be provided, said Ginsburg. Of those who participated, 82 percent said they would require Medicare enrollees to choose a provider network rather than continue the current carte blanche approach to seeing health care professionals. Most stipulated that referrals outside the network should be covered with consent from a patient's primary care physician.

Regarding complex chronic conditions, 54 percent supported the idea that low-value care should be covered at 50 percent of cost. Ninety-seven percent supported eliminating ICU coverage for dying patients. And looking toward the long-term future, 77 percent would make some changes if doing so would allow Medicare to remain solvent for 50 years.

A wide range of potential solutions were presented during the sessions as part of the discussion to reduce Medicare costs, according to Ginsburg, but one item left untouched was physician pay.

"The public reveres doctors," she explained. "People don't want to muck up what we pay doctors. They are worried that if you lower what you pay doctors, you'll get lousy doctors."

Among the 12 care areas discussed during the focus sessions as possible areas in which changes could be made to Medicare, catastrophic care and preventive care were the only ones participants did not think needed to be changed. The downside of that finding, however, is that by putting such a heavy emphasis on the need to obtain preventive care, the medical community may have campaigned too strongly, said Ginsburg.

"We've drummed it into their heads about the importance of screening and prevention," she said. "We tell them that more is better. Now we're stuck with a messaging problem."

After Ginsburg explained the survey findings, a panel of health policy analysts discussed their implications.

Panel Discusses Results

"The survey shows that Medicare is overwhelmingly popular," said Robert Moffit, Ph.D., a fellow at the Heritage Foundation. But, he added, "people who are enrolled know very little about the program, how it works and what it costs."

Moffit pointed out that regardless of how attractive a health care plan is, when beneficiaries are asked to make sacrifices affecting their coverage, support for the plan drops dramatically. He recalled the extreme hostility the public expressed against HMOs in the 1990s. With public opinion seemingly now shifting to accept a more controlled network, this mindset represents a "huge change" even if health plans take on a different form.

Moffit noted the unique nature of Medicare, which was founded almost 40 years ago, in that it offers flexibility that no insurance plan would replicate today, with a virtually unlimited choice of physicians and locations for all beneficiaries.

Although doctors make treatment decisions intended to optimize care, real-world economics often dictate protocols based on a patient's copayment or the cost of Medicare Part B drugs.

Panelist Kavita Patel, M.D., a primary care physician and managing director of clinical transformation for the Engelberg Center for Health Care Reform at the Brookings Institution, emphasized that neither legislators nor CMS officials want to develop a list that assigns value to different forms of care as being "high" or "low," even though such distinctions already exist to an extent because of payment policies.

"The way our Medicare benefits are set up, doctors are boxed in to do that anyway," she said.

All of the panelists acknowledged that the desire in medicine to provide as much care as possible to a critically or terminally ill patient regardless of cost or likelihood of success is placing an undue burden on Medicare.

"We're not saying that you shouldn't have it," said Ginsburg. "We're saying we shouldn't be using societal resources to pay for it when the treatment is unlikely to be successful."

John Rother, J.D., president and CEO of the National Coalition on Health Care, specifically singled out expensive drugs used for critically or terminally ill patients as a potential source of savings.

"Is it worth it to spend $100,000 a year on a drug that might extend life for six months or two months?" Rother asked. "I don't think we can afford that, nor should we."

Other panelists agreed that the cost of care for these patients needs some kind of financial cap, difficult as that may be for many to stomach.

"It's a behavioral issue," Patel said. "We don't like to talk about death in this country. When you have to tell a family, 'This is it. There's nothing more we can do,' it's a very difficult conversation."

Overall, said Rother, future priorities should not focus on changing benefit plans but should be directed toward seeking changes in physician reimbursement rates, better managing chronic conditions and keeping drugs affordable. He said that in the near future, the fee-for-service model will have to be abandoned because it is cost-prohibitive. In his view, the accountable care organization model will become the standard for care delivery.