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ObamaCare Clusterfuck: How ObamaCare's Medicare financial incentives make you you worse off if you're not already well off

ObamaCare apologists keep saying that ObamaCare -- or, as they like to call it when they don't want to talk about the website debacle, "the health care law" -- is "more than just a website." And it is! It is! For example, it affects Medicare as well, as this article in the New England Journal of Medicine explains. Andrew M. Ryan, Ph.D, "Will Value-Based Purchasing Increase Disparities in Care?", NEJM, December 26, 2013:

Financial incentives for improving quality and efficiency have gone mainstream in U.S. health care. After years of small-scale pilot projects, demonstrations, and experiments, the Affordable Care Act mandated that Medicare payment to hospitals and physicians must depend, in part, on metrics of quality and efficiency. The first program to do so is Hospital Value-Based Purchasing (HVBP), which began affecting Medicare payments to acute care hospitals in October 2012. ...

Lower-performing providers tend to care for poorer patients and have a larger share of patients from racial or ethnic minority groups than do higher- performing providers. If these providers receive lower incentive payments or face payment penalties, they may be less able to fund quality-improvement initiatives — an effect that could, in turn, increase race- and income-related disparities in care.

And -- Hold on to your hats, folks, because this will come as a shock -- that's exactly what happened. I'll skip the program details and cut to the bottom line:

These results show that hospitals caring for more disadvantaged patients did in fact fare worse in the first year of HVBP. Thus, the program has not eliminated disparities in payments by rewarding both quality improvement and quality achievement. Because the financial incentives in the program’s first year were relatively small — equal to the net revenue for a handful of high-margin admissions for most hospitals — payment disparities are unlikely to affect hospital resources and disparities in care in the short term. However, the magnitude of the incentives in HVBP will double from 1.0% of Medicare payments for DRGs in fiscal year 2013 to 2.0% by fiscal year 2017. During this time, the criteria for incentive payments will also shift toward performance on outcome measures, which may further hurt hospitals that care for more disadvantaged patients. Such hospitals are also more likely to face penalties from Medicare’s Hospital Readmissions Reduction Program. Over time, resource reductions from the additive effects of these programs may cause quality of care to deteriorate among hospitals caring for more disadvantaged patients.

The conclusion:

However, a redistribution of resources away from hospitals serving high numbers of disadvantaged patients could increase disparities in care. Going forward, these programs must be carefully monitored and, if necessary, modified to avoid such unintended consequences.

Oh ha ha ha. Since when is fucking over the poor an "unintended consequence"? If you measure everything by the market, as neo-liberalism does, then people who have money should live, and people who have money should die.

The Dartmouth Study weasels have the same attitude. Hipparchia will correct me on this, but I would summarize the Dartmouth mentality this way: There is a box called a hospital, with inputs and outputs. The hospital boxes have outputs that vary greatly. Hence, they reason, the approach to take is to look inside the boxes with the best outputs, and then make all the boxes do what the "best" boxes do. Unfortunately for everybody but the people who extract profits and rents from the boxes, the inputs to all boxes are not the same, and so what they are really doing is optimizing the inputs, too; only the round pegs in round holes will get treatment, and the square pegs will be thrown away. And indeed, the measured outputs will improve, allowing the Dartmouth dudes to claim success!

To change metaphors, think of hospitals as meatgrinders. There are a variety of meatgrinders that make hamburg, some good for sirloin, others good for stew meat. The Dartmouth guy comes along, notes that the sirloin meatgrinder makes really great hamburg, and mandates that henceforth all meat be ground using the sirloin meatgrinder. So, forcing the the stew meat through the sirloin meatgrinder does indeed produce great hamburg -- Success!! -- but a lot the bones and tougher meat can't be force fit through the grinder at all, and so gets tossed on the floor (leading to a financial penalty, next quarter for waste....). Of course, in the real world, the meat and bone that gets tossed on the floor comprised human beings, but never mind that.

Sorry, gotta run, or this post would be more polished...

NOTE Thank for the study. You know who you are!

Average: 5 (1 vote)


quixote's picture
Submitted by quixote on

I don't think shortchanging the people who can't fight back is an intended consequence. I think it's worse than that.

If there's an evil genius cackling and rubbing his hands and saying, "And then we'll get them," it's fairly easy to analyze the situation and see where the problem lies.

I think all this crap happens in that oh-so-conveniently-accidentally-on-purpose way that allows the perps -- the bureaucrats requiring the studies, the scientists doing them, the taxpayers who'd rather not pay for them -- to feel innocent, virtuous, I'm-trying-to-do-my-best-here. And nobody in polite society (which obviously doesn't include Corrente) is allowed to point out that the dog didn't bark.

That seems to be a much harder situation to fix than the intentional one.

Anyway, what I really got into comments to say was that the screweroo is very obviously not really unintentional. There are well-established methods in epidemiology to control for disparities in populations. If they really wanted to do the statistics on outcomes right, they know how to do that. Or at least how to do it better than by ignoring inequality. They don't, so they don't want to.

Submitted by Hugh on

Anyone who lives in or near a community with more than one hospital knows that Hospital A tends to cater to an upscale, well insured population and some Hospital B or further down the alphabet tends to get the poor and minorities. So this is not some case of no one could have foreseen. It's a case of everybody knows, certainly everybody who wrote Obamacare into law. So I agree this is no mistake or oversight.

We've seen this approach before. No Child Left Behind took much this same approach to education. Gross disparities in wealth were simply ignored there too. What both the ACA and NCLB have in common is that our elites refuse to address the underlying issues of wealth because this would eventually lead back to their looting of the 99%. So they put impossible demands and conditions on programs the result of which is degradation of those programs and indeed opportunities for privatizing and looting them.

Submitted by lambert on

I keep thinking of all these neoliberal programs as sorting devices (happyville or pain city). Like cracking towers for whatever personal characteristics they wish to encourage.

Not sure where to go with it; perhaps its a consequence of eing thrown under the bus...

Submitted by flora on

It's terrible to think neoliberal metrics are infecting Medicare.
I think neoliberal metrics are neither objective nor sound,
they are the opening move in a con to enable looting in some form. Example: changing pension accounting standards and then declaring the Post Office near bankruptcy because the PO doesn't have retirement funds in hand for the next 70 years of payouts. 70 years isn't required of any other business or entity. Its not objective accounting. But by getting that metric accepted by Congress the PO has to start closing offices and selling off properties in the heart of cities. There have been reports of sweetheart deals.

A famous recent skewed metric is the R&R study that neoliberals use to justifie austerity.

"Influential research by U.S. economists Carmen Reinhart and Ken Rogoff, touted by policymakers pushing government austerity in the United States and Europe, is riddled with errors, a bombshell new academic study claims.
The findings may not have much impact on the debate over government debt, and it probably won't cause those who have spent the past several decades panicking over government debt to stop their panicking. But it seriously erodes the intellectual underpinnings of the pro-austerity argument -- and makes the damage done by austerity in Europe and the U.S. in recent years all the more poignant.
The problem is that other economists have been unable to recreate Reinhart and Rogoff's findings. Herndon, Ash and Pollin now say they were able to do so -- but only by leaving out big, important pieces of data. "