MedPAC Speaks

I once called MedPAC the most influential organization in the medical arena that most Americans have never heard of. That was in a blog post from April, 2009 called “Follow the Money.” I continue to find MedPAC—the non-partisan, independent congressional agency that advises on issues related to the Medicare program—an excellent source of information and analysis. Its 17 members, representing academia, public health, medicine, and industry, make recommendations to Congress for revisions to the Medicare program twice a year. The March report is called “Medicare Payment Policy” and the June report is “Medicare and the Health Care Delivery System.” This month’s report contains more than the average share of interesting material. 

There’s a section specifically mandated by Congress that analyzes the Hospital Readmissions Reduction Program (it found, on average, that the program led to a 3.1 percent decrease in readmissions for five major medical problems, although it couldn’t be sure that the program caused the drop). Another section addresses how to improve Medicare’s approach to paying for medical devices (among other tactics, limit the ability of physician-owned distributors through greater regulation and accountability).  There’s a chapter on Accountable Care Organizations (possibly effective in controlling costs and improving quality, but with various modifications proposed). But what intrigued me most was the final chapter on “Medicare coverage policy and use of low-value care.”

MedPAC defines “low-value care” as services (including treatments, medications, and tests) that are of “little or no benefit” and where the risk of harms exceed the potential benefits. That, of course, is a value-laden definition since it assumes “benefit” can be clearly established and quantified, ditto for “harms,” and that we know the probability of either benefit or harm. Nonetheless, a remarkable number of treatments, medications, and tests are widely agreed to fall into this category. They comprise the list of no-no’s compiled by specialty professional societies for the Choosing Wisely campaign which, in its first five years of operation, came up with 525 recommendations. 

For frail elders, incidentally, the relevant professional organization inventoried by Choosing Wisely inveighed against gastrostomy tubes in people with dementia, obtaining urine cultures for people without urinary symptoms, use of lipid lowering agents in people with a limited life expectancy, screening for breast, colorectal, or prostate cancer in individuals with a life expectancy of less than ten years, hospitalization without taking into account goals of care, and aggressive blood pressure regimens.

The first observation MedPAC makes about low-value care is just how widespread it is among Medicare fee-for-service beneficiaries. Using two measures developed by Aaron Schwartz, Bruce Landon, and colleagues, the commission estimated that between 25 and 42 percent of patients over age 67 received at least one value service per year, costing Medicare between $1.9 and $8.5 billion. Imaging tests, cancer screens, and other diagnostic and preventive tests accounted for the lion’s share by volume, with cardiovascular tests and imaging the major offenders in terms of cost.

MedPAC concludes by considering six “tools” that could improve the situation. The commissioners raise the possibility of expanding the use of pre-authorization, a much-despised approach used by prescription drug plans and hospitals to limit the use of expensive medications. This tactic would create administrative obstacles to the use of various tests and procedures—and would further the bureaucratization of medicine deplored by many physicians. 

They also propose implementing “clinician decision support” programs and provider education, claiming that inappropriate antibiotic prescribing has been reduced in this way. No one could disapprove of trying to make clinicians wiser and more knowledgeable—the question is how to achieve this. Many of the usual “decision support” and “education” programs have been of dubious benefit. 

Another option is increased cost sharing. This is a favorite approach of commercial insurance programs but mercifully has rarely been used by Medicare—it places the burden for deciding whether a test is worthwhile squarely on the shoulders of patients, often without providing them with the information necessary to decide. It encourages wealthy people to squander their resources on low-value tests since the cost-sharing involved is trivial for them, and it may distort the decision-making of the less affluent by leading to their accepting cheap but useless tests and rejecting expensive but useful ones. 

Then there’s the strategy of revisiting Medicare’s “national coverage decisions” periodically—for the small number of tests in which the choice about coverage is made at the national level. The problems with this approach are that it fails to address the vast majority of coverage decisions that are made at the local level and that the reality is that revisiting coverage decisions has historically led to Medicare’s paying for more procedures, not fewer.

That leaves only two options to MedPAC. The first is introducing new payment models in which providers are held accountable for both cost and quality. This is the rationale behind Accountable Care Organizations and it may be working, according to MedPAC. It’s not entirely clear since the organizations that were able to lower the use of low-value care by and large choseto belong to an ACO so there may be something about the organization, not the ACO structure. The second option is to introduce cost effectiveness into determinations of Medicare payment.

MedPAC doesn’t explicitly endorse balancing cost and benefit in determining whether Medicare will pay for a service and if so, how much it will pay. It is at pains to review the long and sad history of attempts to introduce cost into Medicare’s decision-making. In fact, MedPAC includes a 14-page “primer” on Medicare’s decision-making process, with several highlighted sections on the failed efforts in 1989 and again in 2000 to use some form of cost-effectiveness. Both attempts were effectively derailed by the device industry that lobbied heavily against a strategy that they knew would result in restrictions on their ability to sell any device that is “safe and effective” (the FDA standard) at whatever price they wish.

But why, if including cost in coverage decisions is out of the question, does MedPAC go on and on explaining what cost effectiveness analysis is, reviewing the ethical objections to the use of QALYs (Quality-Adjusted Life Years), and detailing the history of efforts to define “reasonable and necessary,” the phrase used in the original 1965 Medicare legislation to describe what Medicare must cover? Why all the verbiage devoted to cost-effectiveness analysis in the commercial sector and by the non-profit Institute for Clinical and Economic Review? 

I have to assume that the reason is that the MedPAC commissioners recognize that while better physician education and new improved ACOs may be of some use, the most effective strategy is for Medicare to refuse to pay for “low-value care” when that is a euphemism for “useless intervention.” It is true, as the report indicates, that there is no explicit statutory provision including cost as a component of Medicare’s coverage decisions. But neither is there any statutory prohibition. It is time to try once again to exploit the loophole, perhaps using the language of “value” that is currently in vogue—after all, who could argue against choosing treatment that is valuable?