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Managing Medicare's Costs

The challenge of coordinating specialty care in Medicare

The average Medicare beneficiary sees seven physicians a year, and probably six of those are specialists. The typical primary care doctor coordinates care with 229 specialists in 117 practices.

Seeing those numbers makes you wonder how much coordination a primary care doctor really has time to do. They also point to a challenge faced by seniors, who may worry that even though they see several doctors, no physician has the time to coordinate their care and nobody has a clear picture of their overall health.

When specialty care isn’t closely coordinated, overtreatment is often the result. In a 2012 New York Times blog post, health care writer Tara Parker-Pope recounted the time her young daughter sprained her ankle at dance camp. In the following months her daughter saw five doctors – a pediatrician, a sports medicine specialist, a pediatric orthopedic surgeon, an eye specialist, and a pediatric rheumatologist. Each of them performed tests, some of them duplicates of other recent tests, before referring her to a different specialist.

Even after her daughter underwent three MRI’s and multiple blood tests, there was still no diagnosis. She then took her daughter back to the sports medicine specialist, who this time recommended that they try pain relief. Within days, the daughter’s ankle stopped throbbing.

Seniors appear to be more susceptible than other age groups to this kind of overtreatment. Last year a Harvard study found that at least one in four people with Medicare underwent an unnecessary medical procedure in 2009. The study indicated that this unneeded care cost $8.5 billion, based on an analysis of 1.3 million Medicare claims.

The rate of unnecessary testing for Medicare patients is highest in popular retirement states like Florida, Arizona, and California — another sign that seniors are a rich target for specialists wanting to order more tests. A recent New York Times article told of a 91-year-old man on a midwinter sojourn to Florida who went to a cardiologist to have his pacemaker adjusted. Even though he had no unusual symptoms, the man was told he needed a series of expensive tests. He called his cardiologist back home, who confirmed the elderly man’s suspicion that he didn’t need the tests.

Studies show that when health care is coordinated by a primary care doctor, there’s rarely overtreatment. Yet the primary care doctor’s job has become more difficult as specialists have proliferated. It’s one thing for a primary care doctor to coordinate care among two or three physicians, but when a patient sees six or seven doctors, it takes a substantial effort.

About 70% of U. S. doctors are specialists, a percentage that has jumped by more than 40% since the 1960s. The United States leads the world in the ratio of specialists to primary care doctors. One reason for that shift has been the rapid expansion of medical knowledge. There are now more than 120 medical specialties and sub-specialties, and the most recent update of the international medical coding system contains 68,000 codes. That is more than five times the number in the previous version that was designed 25 years ago.

Many doctors have responded to increasing complexity by choosing to concentrate in narrower areas. Some of them are also responding to the financial incentive to become a specialist, who earns roughly twice as much as a primary care doctor.

If you have Medicare, there are different ways to manage the task of coordinating your care among specialists. If you do not want to enroll in a managed care plan, you can serve as your own care coordinator and choose the specialists you want to see. Studies show that most people with traditional (or fee-for-service) Medicare coverage use this freelance approach. If that’s you, keep your primary care physician in the loop and make sure he or she gets copies of any test results ordered by specialists. Also, if a specialist wants to do an MRI or other expensive test that you question whether you really need, you can see a different specialist for a Medicare-covered second opinion.

A different option is to hand over coordination to a Medicare Advantage HMO, where a primary care doctor will coordinate your visits to specialists. A third way is to enroll in an Advantage PPO, where you can see any doctor but will pay more when you go outside the PPO network. Warning — if you see an out-of-network specialist in an Advantage PPO plan, you may be asked to fork over between 20% and 50% of the cost of the visit or treatment. And you may be subjecting yourself to a high out-of-pocket limit, which can be as much as $10,000 for combined in and out of network services in some Advantage Regional PPO’s.

Your choice of coverage may depend on your health. If you are in robust condition, a Medicare Advantage HMO plan could be a good fit. Today’s Advantage HMO’s are better than those of a decade ago, and you will also have a better chance of getting all your preventive tests in an HMO. Over time, having regular preventive tests may reduce your need to see specialists.

The reputation of Advantage HMO’s received a boost last month from a study of the rate of preventive care visits among seniors in Northern California from 2007 through 2013. The study’s authors wanted to determine how the rate of these visits changed when Medicare began covering the entire cost of recommended preventive tests in 2011. What they found was that 53% of Advantage HMO enrollees had preventive visits, a much higher percentage than for people with other types of coverage.

If your health is not good, you may want to avoid the restrictions of an Advantage HMO or even a PPO because of the potentially higher cost. That means you would remain in traditional Medicare and buy a supplement – either a Medigap policy or an employer supplement. Then you are free to go to top-notch specialized treatment centers without worrying about whether they’re in a network. But that flexibility may come at a price if you choose a comprehensive supplement like Medigap Plan F and Plan C.

Moreover, the risk of traditional supplements like Medigap policies that they do not require coordinated care. That is one reason Congress created Accountable Care Organizations, or ACO’s, which encourage greater coordination in traditional Medicare.

In an ACO a group of providers – doctors, hospitals, skilled nursing facilities – coordinate the care of people. Your primary care doctor refers you to specialists in the ACO network, which sounds like an HMO. But in an ACO you can disregard referrals and see out-of-network doctors without paying more.

If an ACO meets certain quality standards and also saves Medicare money, it gets a share of the savings. Currently there are more than 400 ACOs serving almost 8 million people, and they have saved the government $417 million since the first of them were introduced in 2012. Last year Medicare reported that the ACO’s that started the program in 2012 had better quality on 17 out of 22 measures than did group medical practices which were not ACO’s.

If you have a chronic disease, another way to get coordinated care is to enroll in an Advantage Special Needs Plan, or SNP. These plans provide specialty care for certain groups such as people in nursing homes or those who have Medicaid. There are also SNP plans for people with one or more of 15 chronic diseases including coronary artery disease, diabetes, asthma and cancer.

A SNP might focus on people with coronary artery disease, for instance, and make sure that their care is focused on that disease and coordinated through a primary care doctor. Nationwide, though, there are only 152 chronic condition SNP’s, and more than one half of those are in Florida and New York. Most SNP’s are organized as HMO’s that coordinate care by having the primary care doctor make referrals to specialists. ◊◊

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