NJOM shows sick patients cost more to treat...... Who knew?

In the least surprising conclusion of recent articles in the New England Journal of Medicine (N. Engl. J. Med. 2011;365:1704-12,) it was proven that older, sicker patients cost more money to take care of!

from the summary in Internal Medicine News, 

"Eight commercial disease-management companies using nurse-based telephone care programs failed to improve quality of care, reduce hospital admissions, decrease emergency department visits, or cut health care costs in a pilot project of fee-for-service Medicare patients.

 Companies were required to meet preset targets for clinical quality and patient satisfaction, and to hold health care costs under a preset limit. An independent group, RTI International, won a competitive bid to evaluate the programs.

However, before the evaluation could be completed, five of the eight companies incurred such "substantial financial liability" that they terminated their programs, according to Nancy McCall, Sc.D., and Jerry Cromwell, Ph.D., of RTI International in Washington.

  

These findings show "it is unlikely that simply managing the care of elderly patients through telephone contact or an occasional visit will achieve the level of savings Congress had hoped for when it mandated the Medicare Health Support Pilot Program," Dr. McCall and Dr. Cromwell said."

So a majority of participating companies with extremely sophisticated resources to manage these patients could not make the numbers work, and Medicare is trying to capitate costs and financial risk of these patients onto providers in the future via "Accountable care Organizations" (ACO)?

This is the same thinking that led the geniuses who run Wall Street to put together a bunch of high risk,crappy mortgages together into a new vehicle, the synthetic  Collateralized Debt Obligation (CDO), and expect it to perform better then the underlying parts.  These products later nuked our economy by hyper accelerating speculative housing market bets.


Just as it took a physician running a hedge fund, Dr. Michael Burry (hero of the excellent book by Michael Lewis "The Big Short"), to point out that the emperor had no clothes in the housing bubble, major medical centers like the Mayo Clinic and Cleavland Clinic  have already told the government "no thanks!" on assuming open-ended risk on capitated care contracts for medicare patients.


Rob