Promise and peril for the Affordable Care Act

In December 2009, Atul Gawande expressed hope that a "hodgepodge" of cost control measures stuffed into the Senate healthcare reform bill, most of which later made it into the Affordable Care Act, might have a transformative effective over time:

Where we crave sweeping transformation, however, all the current bill offers is those pilot programs, a battery of small-scale experiments. The strategy seems hopelessly inadequate to solve a problem of this magnitude. And yet—here’s the interesting thing—history suggests otherwise.

Gawande goes on to review the history of Federal government intervention in the agriculture sector in the early 20th century gradually but radically transofrmed farming methods andled to massive increases in productivity.  For healthcare too, he argues, there is no master switch. Trial and error, orchestrated by carrot and stick, is the model:

The history of American agriculture suggests that you can have transformation without a master plan, without knowing all the answers up front. Government has a crucial role to play here—not running the system but guiding it, by looking for the best strategies and practices and finding ways to get them adopted, county by county. Transforming health care everywhere starts with transforming it somewhere. But how?...

Pick up the Senate health-care bill—yes, all 2,074 pages—and leaf through it. Almost half of it is devoted to programs that would test various ways to curb costs and increase quality. The bill is a hodgepodge. And it should be.

Some elements of that hodgepodge may already be having an effect, as hospitals anticipate the demands of provisions not yet in effect.  A couple of weeks ago, I noted, courtesy of Maggie Mahar, that Medicare spending increases have slowed dramatically over the past year and a half, according to the CBO. Peter Orzag, seeking to account for this early bend in the healthcare cost curve, cites one example of the law's effect on Mount Sinai Medical Center in New York, where he is a member of the Board:

The Mount Sinai experience may be instructive. From September 2010 to May 2011, the hospital’s Medicare revenue rose only 2 percent over the previous year -- in part because the number of inpatient cases fell. Why was that? One important reason was that the number of patients readmitted to the hospital within 30 days of discharge was 5 percent less than what it had been the previous year.

Reducing readmissions is one of the objectives of the federal health-care-reform law enacted last year. Historically, nearly 20 percent of Medicare patients have been readmitted to a hospital within 30 days of being discharged, in part because their doctors and other health-care providers have not managed patient handoffs very effectively. The Affordable Care Act included, among other remedies, a modest penalty for hospitals with high readmission rates.

At Mount Sinai, patients at risk of rehospitalization are now identified when they first come in and assigned to a special team of doctors and nurses that works to minimize that risk. Apparently, the effort is working. And as more hospital systems begin to use information-technology systems to measure and manage value, we could see progress in other areas of patient care as well.

Orzag goes on, however, to issue a warning about existing perverse payment incentives in Medicare -- and Republican attempts to undermine efforts in the ACA to reshape those incentives:

Reimbursement from Medicare is still primarily based on how many services hospitals perform rather than on how well they care for patients, so hospitals are often financially penalized for improving value and quality. The Mount Sinai program to reduce readmissions, for example, is costly for the hospital both because of the extra expense of running it and because fewer readmissions means less revenue. Ken Davis, the president and chief executive officer of Mount Sinai, says the hospital won’t be able to afford continuing the successful program if the financial incentives remain so skewed against it.

The health-care law includes a variety of provisions meant to shift Medicare’s payment system toward a focus on quality. Yet many of these aspects of the law are under attack in Congress. It is therefore important for the new supercommittee - - created by the recent debt-limit deal to find $1.5 trillion in further savings in the federal budget -- to protect and even strengthen the effort to base the Medicare payment system on value.

Therein lies the pattern of our present moment. Well-designed if partial measures enacted by the previous Congress, slow to work and poorly defended.  All-out assault by the current Congress seeking to undermine those measures -- feebly resisted.  An extremist GOP seeking to  maximize its power by sabotaging the economy, thereby winning carte blanche to blow it all away.

Will Obama ever start calling out Republicans in Congress -- not "Congress" full stop -- as the saboteurs they are? I'm not holding my breath.