A doctor’s view on payments: Cherry-picking and lemon-dropping

mary-oconnor

Guest post summary: “The dirty little secret of current medical payment changes is doctors and hospitals now have a financial incentive to not provide care for some patients, those who put the providers at higher risk of financial penalties. We call this phenomenon cherry-picking and lemon dropping,” writes Mary O’Connor, M.D., Yale School of Medicine and Yale-New Haven Hospital, in a guest post.

 


In my world of orthopedic surgery, hip and knee replacements transform the lives of my patients with severe arthritis by allowing them to walk again without disabling pain and to return to many activities they enjoy. Many of us have family and friends who have benefited from this incredible surgical advance. Furthermore, from a health policy perspective, these are cost-effective surgeries as calculated by quality of life improvement.

But joint replacement surgery costs money. And the overall health system expense for these operations has significantly increased as more and more patients need the surgery, driven by an aging population and the obesity epidemic (every 10 pounds of extra weight puts an additional 30-60 pounds of pressure on a knee joint).

In fact hip and knee replacement is the most common inpatient surgery for Medicare patients. And the numbers are staggering: More than 400,000 procedures in 2014 costing  more than $7 billion for the hospitalization alone.

Recognizing the need to control such costs, and with the goal of supporting better and more efficient and coordinated care for patients, the federal government created bundled payment programs in which hospitals are given a fixed payment for all the care that joint replacement patients receive from admission for surgery to 90 days after. This bundled payment program is now mandated in 67 geographic regions in the United States.

So, how well is it working? And it is working to the benefit of all patients? Or are certain types of patients disadvantaged by this payment approach?

We now have early positive data showing Medicare payments to hospitals both in and out of the bundle for such surgeries have decreased. But the data also shows hospitals in the bundled program are shifting toward healthier patients who are less likely to require more expensive care during the 90-day episode. Another study of the behavior of doctors in the New Jersey Gainsharing Demonstration pilot supports this finding: Doctors admitted healthier patients to hospitals where they could receive a bonus if total costs were lowered.

Who’s a cherry? Who’s a lemon?

Some would say that is a good trend. We should more carefully select patients who are less likely to develop expensive complications or require more intensive rehabilitation center stays after surgery. But a closer look at this process of “cherry picking” more favorable patients for surgery and “lemon dropping” those less favorable patients raises concerns that existing (and morally affronting) health care disparities will increase.

So who are the patients who are “lemons”? They are our neighbors, colleagues, family members, and maybe even us. Two primary characteristics of “lemons” are obesity and diabetes, conditions that are much more common in women and patients of color. A frightening 56.6 percent of African-American women are obese compared with a (still unacceptable) 32.8 percent of white women.

Compared with non-Hispanic whites, African-American adults are 80 percent more likely to have diabetes.  These conditions increase the risk of serious complications after joint replacement surgery. For example, one study showed infection rates following hip replacement to be 2.6 percent in obese patients and a staggering 9.1 percent in morbidly obese patients compared with 1 percent or less in normal weight or overweight patients.

As a surgeon, I dread my patient developing an infection in their joint replacement. But despite the best efforts of my team and myself, infections can occur. What would have been a dramatic life-improving operation becomes a dreaded complication compromising quality of life, with additional surgeries required to treat the infection.

The health care costs of treating an infected joint replacement are three  to four times greater than the costs of performing the first surgery. The hospital doesn’t like me, my patients don’t like me, and my public profile takes a hit.

We need financial incentives to improve the quality of care in medicine. But we cannot sacrifice the care we must provide to all patients in the process. While we absolutely must promote healthier lifestyles to decrease obesity and diabetes, part of the immediate solution is to apply risk-stratification to those high-risk patients so doctors are not penalized for caring for these populations.

The Centers for Medicare and Medicaid Services acknowledges this situation but has delayed implementation of risk stratification measures.  We cannot permit this trend of “cherry picking” and “lemon dropping” to, at best, continue, and at worse, increase.

So when that obese, diabetic patient of color with severe knee pain from end-stage arthritis hobbles into my office seeking my surgical consultation, whom do I see? A lemon or a cherry?

Mary O’Connor, M.D., a public voices fellow, is director of the Musculoskeletal Center at Yale School of Medicine and Yale-New Haven Hospital. This guest post is published with permission, as part of our efforts to improve communications among actors in the health care system, and to make disparate voices heard.