Is the SGR so dumb it warrants a gimmick ‘pay for’?

The only thing dumber than the annual SGR/doc fix charade where we lament huge Medicare Part B cuts that we know won’t happen is the debt limit. While I generally favor following paygo, I think the SGR is dumb enough to warrant getting rid of with a gimmick such as counting war savings draw downs.

Lets just start over.

Loren Adler has been consistently saying no, we need to pay for the SGR fix. I respect the position and generally am with him on such matters. However, he has gone even further and said that what I have now termed the second-dumbest thing in Washington (whatever the second dumbest thing is must be pretty dumb) has lead to fiscal restraint in federal health spending, because most of the pay-fors to push out the SGR cuts have come from health care spending. Even further, Loren implies that maybe only the dumbness of the SGR (huge cuts that are politically impossible) has enabled the other changes. If this is true, I just want to take a long nap.

In any event, I asked Loren for an analysis of the degree to which the changes to pay for pushing off the huge cuts that will never happen have been reasonable policy and he said he is working on such a post. I will link it when up.

One worry that I have is that any longer run SGR fix could bring about hospice payment changes that are scored as cost savings because they don’t project a change in behavior, but that might actually change hospice behavior in a manner that actually increases Medicare costs (reduce use in the cost saving range of hospice length of use). I was talking about worries around unintended consequences at yesterday’s Hospice Action Network event on hospice length of stay (I will link the vid when up).[here are my slides PPT_Deck_RCRT_dt3.20.14_shorter]

The difficulty in projecting what might happen to hospice length of use if we adopted a U Shape payment modification of the straight per diem, or perhaps a rebasing a la Home Health from a few years back is that there is no good evidence on changes in use after hospice payment changes. This is because Medicare insures over 8 in 10 decedents each year, and has had a straight per diem payment approach for the entire time. Further, since the hospice benefit is carved out of Medicare Advantage, there is not even proprietary evidence about different payment approaches and hospice. I can find no published study that shows any evaluation of a payment change in hospice in private insurance or in another country. If you know of one let me know.

I think the Medicare hospice benefit needs to be updated. I am worried about unintended consequences, in large part because there is not even clarity about the goals of hospice payment policy change. It needs to be gotten right. I am worried that hospice will get sucked up into a long term SGR pay for, and that the payment change will have behavioral impacts that we have no way to estimate.

Please note, Loren Adler is an excellent analyst. I am not saying he is dumb. His argument makes me reconsider my views of SGR, but as of yet I remain unconvinced.

About Don Taylor
Professor of Public Policy (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute), and Chair of the Academic Council at Duke University . I am one of the founding faculty of the Margolis Center for Health Policy. My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

2 Responses to Is the SGR so dumb it warrants a gimmick ‘pay for’?

  1. Brad F says:

    Tackle question in another way:

    Is it more or less likely a U-shaped payment change will bring about a salutary (or “less bad”) behavior change?

    I am not saying its an ideal change, nor am I saying this should be the end of hospice payment modification or experimentation.

    Status quo terrible–doubtful even half cooked change could make things worse. Outside of demo’s, united payments not going to happen for a few years. U-shaped payment, after usual sausage grinding, tweaks, and lobbying might be a 1/2 step forward.


    • Don Taylor says:

      Fair points. I think a u shape is better than a rebase. An attempt at a disease specific (or at least have one approach for cancer, copd, chf) and then something different from dementia + failure to thrive, etc. Interestingly, no one understands what the structure of the hospice concurrent care demo actually is….meaning what are the policy details?

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