12.08.09

Piloting Delivery Reforms: An Interview with Kenneth E. Thorpe

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Kenneth E. Thorpe is chair of the Department of Health Policy and Management at Emory University’s Rollins School of Public Health. The O’Neill Institute’s Lester Feder spoke with him on November 17th about delivery system reforms.

Lester Feder: Let me get your general take on the reform process and where we’re headed.

Kenneth Thorpe: I think despite a lot of obvious roadblocks and contention, it continues to push ahead. It’s like any piece of legislation—it has its pluses and minuses. It has nobody’s first choices—including mine—in it. But I think the major pieces, in terms of moving towards universal coverage and getting a substantial share of the population covered, are good. I think that we’re going in the right way in some of the delivery system reforms in particular and payment reforms. They may be moving too slow, but they certainly have given the secretary of Health and Human Services a lot of new authority to change the delivery system model. I would rather not have done that as pilot programs, but just implement it nationally within three or four years.

Lester Feder: Can you describe what the delivery system reforms are and what’s good about them?

Kenneth Thorpe: One-third of the growth in all health care spending is due to obesity and the explosion of diabetes and other things related to chronic disease.

Seventy-five percent of spending goes to chronically ill patients. Delivery system reforms are trying to do a better job of preventing these diseases in the first place, and working with patients to keep them out of the hospital. The main proposal is to have the federal government work with states to build community health teams, including nurses, nurse practitioners, primary care providers, clinics, and transitional care services to make sure patients aren’t readmitted unnecessarily. This would really change the whole style of care so that it’s much more proactive rather than the reactive style we have today.

Lester Feder: What’s the path for taking that from a pilot program to changing the system as a whole?

Kenneth Thorpe: You’re going to have to make some national changes to Medicare on how we pay providers, moving towards targeting high-readmission-rate hospitals and bundling payments for all care within a 60-day period post-discharge. If we do those two things, combined with having the community health teams available nationally, which we could easily do within three year, we could make big savings. But we’re moving in the right direction, and it’s certainly better than nothing.

Lester Feder: Is the authority to do that in the drafts of the bill as they currently stand?

Kenneth Thorpe: It is, yes. They give the secretary of Health and Human Services a lot of additional authority, in part through the Center for Medicare and Medicaid Services Innovation Center. There’s also an expectation that if the secretary sees promising models, the secretary can move expeditiously in expanding them more broadly.

Lester Feder: Is that a new kind of authority for the secretary to have, or are their precedents in Medicare and Medicaid?

Kenneth Thorpe: No, that’s a new authority.

Lester Feder: Do you think that the bills are giving the amount of authority to the secretary that she would need, or do you think there’s going to have to be additional legislation down the road?

Kenneth Thorpe: There’s always going to need to be more. But it looks to me like they’ve given her enough authority to proceed expeditiously so I think that’s all good news.

Lester Feder: Assuming that something like what Congress is working on passes, what would you say are areas that Congress should be revisiting in the near future?

Kenneth Thorpe: Next year they’ll be back to do delivery system reform quicker nationally. And there will be a quite a bit to do on entitlement reform. The irony is that 80 percent of people enrolled in traditional, fee-for-service Medicare are patients with multiple chronic health conditions and have high rates of preventable hospital admissions and readmissions. The Medicare program is the only payer that does absolutely nothing in coordination and prevention.

Lester Feder: What do you think of the insurance regulations for private insurance?

Kenneth Thorpe: I think they’re all positive. I think you want to make them widely available nationally, not just in the exchange. I think eliminating medical underwriting, and recessions, and getting rid of the annual and lifetime caps, moving over time towards more restrictive rating bands, are all really positive steps.

Lester Feder: Do you have any take on the wellness incentives?

Kenneth Thorpe: I think that the House has stronger language in terms of providing up to $35 billion over ten years. Again, that’s an opportunity to get started on community based primary prevention programs. YMCA adopted a diabetes prevention program and saved money within two years.

Lester Feder: Any general thoughts for the legal community as health reform moves forward?

Kenneth Thorpe: To me one of the areas where we need better ideas is reducing the frequency of claims in the medical malpractice world. We’re not going to solve the problem by simply capping damages.

Lester Feder: Do you think malpractice claims are contributing to premium increases?

Kenneth Thorpe: In a minor way. It’s very small, but it’s a major problem for physicians. It’s part of their gross revenue. In the physician community, it’s a real problem that we need to do a better job of fixing.

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