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Managing Medicare's Costs

The importance of Advantage plans' quality ratings (2 of 2)

How do you know if you’re getting good medical care? You trust the primary care doctor you’ve been seeing for years, but sometimes he seems so busy that you wonder if hes overlooked a test or treatment.

He takes your blood pressure, checks your pulse, and listens to your heart. Occasionally he orders preventive tests and screenings. But you have no way of knowing whether he’s missed something.

It’s almost impossible for people who are not medical professionals to judge the quality of care they are receiving. In March the Commonwealth Fund released a 100-page scorecard that used 43 indicators to evaluate the quality of care in more than 300 local hospital-centered areas around the country.

The study found that in the highest-performing area, just 59% of people age 50 and older received all of their recommended preventive care, and only 69% of those with diabetes received three recommended tests. In the worst performing area, only 26% received all their recommended preventive care, and just 27% of patients with diabetes received the three recommended treatments. “These differences are staggering,” the study’s authors concluded.

Some people consult web sites to see how their doctors are rated by others. But the ratings are based on the opinions of patients who for the most part lack the expertise to assess a doctor’s medical care. A Washington Post article cited one authority who said that more than 50 web sites publish doctor ratings. Most of them use Medicare’s five-star approach (five stars being best). Almost all of them rely on anonymous opinions. And while doctors rating systems based on clinical data are in development, they are being done by large hospitals and won’t be available to consumers.

If your doctor belongs to a health plan or provider group rated by experts as having superior quality, you can be almost certain that you’re getting good care. People go to the Mayo Clinic not because of a particular physician’s rating, but because of the organization’s. If you’re enrolled in one of the nine Medicare Advantage plans that have five-star quality ratings this year, your doctor will almost always comply with those plans’ high standards.

Following the national standards of care is increasingly expected of doctors in Advantage plan networks. That’s because the plans are now being paid bonuses based on their quality ratings. Medicare uses 36 measures to judge the quality of Advantage plans’ medical care and 17 more to assess their prescription drug coverage. The 2012 standards can be downloaded here.

Medicare selects the measures from a longer list of criteria used by more than 90 percent of the country’s health insurance plans and managed by the non-profit National Association for Quality Assurance. The measures are based on clinical data and surveys of beneficiaries.

Even though Medicare selects 36 measures from a much longer list, it does not choose the same ones every year. The measures are specific – for example, the percentage of a plan’s diabetic patients whose blood sugar levels were not checked during the year or who had an HbA1c score higher than 9, which indicates their blood sugar was not being controlled. Or, the difficulty people had in getting timely doctors’ appointments when they were ill.

In its _2012 Report to Congress_, the Medicare Payment Advisory Commission (MedPAC) devoted 13 pages to the quality of Advantage plans and the ratings system. It found, as did a Kaiser Family Foundation study, that Advantage HMO’s and local PPO’s have the highest quality, with Private Fee-for-Service (PFFS) and Regional PPO’s lagging. The number of PFFS plans has dwindled to the point that they are nearly invisible, and MedPAC said that more than one-half of them were not eligible for bonuses because they did not report adequate data.

That means seniors who want the best medical care at the lowest cost are most likely to find it in a solidly rated Advantage HMO plan (four stars or more). Last year Advantage HMO plans averaged 3.6 stars, according a Kaiser Family Foundation report. All told, more than nine million Advantage plan enrollees are in HMO’s, the majority of them in plans with no premiums.

HMO’s have a quality edge over other types of plans because of the control they exert over their provider networks. The MedPAC report says that non-HMO’s may have greater difficulty in getting physicians to comply with a particular requirement such as seeing all plan members at least once a year.

MedPAC also found that HMO’s which have been around longer tend to have higher ratings than plans that began in 2005 or later. Established plans have had years to educate their doctors about the plans’ procedures and expectations. Nationally, Kaiser Permanente has the highest average rating of any Advantage plan sponsor, and Kaiser Senior Advantage plans have been around for more than three decades (although the plans have had various names). Also, they employ their own physicians.

Local PPO’s are not far behind HMO’s in quality, however, and they have more control over physicians than do regional PPO’s, which have the lowest quality scores. Regional PPO’s are typically loose-knit networks of doctors spread across large areas, and MedPAC said that as a group they failed to show any quality improvement between 2010 and 2011. They will need to find ways to improve their quality by beginning of 2015, when four stars will become the minimum level for getting a bonus.

Not everyone is happy with Medicare’s quality ratings approach. Douglas Holtz-Eakin, a former director of the Congressional Budget Office, was the lead author of a recent critique whose main complaint was that Medicare doesn’t decide which measures will be used until after the ratings year is past. If plans knew in advance what the measures were, this argument goes, they could focus on those measures and improve care.

The article adds that by waiting to choose the measures until after it has the performance data in hand, Medicare can (in theory) reduce the bonus amounts. It would do this by assigning lower weights to measures where plans scored well. That would reduce the amounts of the bonuses and the costs of the program (which are about $3 billion this year).

Listing the criteria in advance, though, runs the risk of plans paying less attention to other possibly important measures during the rating year. Still, Medicare should release the criteria before the ratings year is over to address any questions about whether it is manipulating the bonus amounts.

It could become a moot point if Medicare gradually adds measures, going from the current 36 to perhaps 45 or 50. As MedPAC noted, detailed encounter data from plans will become available after 2012. This information will enable Medicare to add new quality measures and determine ratings more accurately. Then questions about which measures are chosen may be less be less important. MedPAC speculated that Medicare now chooses measures that affect the most beneficiaries. If that’s true, Advantage plans can assume that treatments for diabetes, cardiovascular disease, and hypertension will always be key measures.

Meanwhile, the current quality rating system is imperfect, but it does appear to identify the better plans. Beneficiaries have slowly gravitated to the higher rated plans, with 26% currently in plans with four or more stars. Because Advantage plan enrollment, which now exceeds 13 million, continues to expand, there will doubtless be more patients and more doctors in the quality plans.

Finally, the MedPAC report indicated that overall Advantage plan quality is the same as fee-for-service Medicare’s. By choosing an Advantage plan with a rating of four stars or higher (when one is available), retirees can get care that is at least above average. Then they won’t have to worry as much about whether their physician has overlooked a test or vaccination. ◊◊

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