Early Test Of An Obamacare Experiment Posts Little Progress

Obama administration officials have warned that ambitious experiments run by the health law's $10 billion innovation lab wouldn't always be successful. Now there is evidence their caution was well placed.

Only a small minority of community groups getting federal reimbursement to reduce expensive hospital readmissions produced significant results compared with sites that weren't part of the $300 million program, according to partial, early results.

The closely watched program is one of many efforts to control costs and improve care being run by the Center for Medicare and Medicaid Innovation, which was created by the Affordable Care Act.

Dozens of community agencies on aging, from Ventura County, Calif., to southern Maine, were offered money to try to ensure that older people leaving the hospital received care that reduced their chances of being readmitted within a month.

Preventable hospital readmissions are estimated to cost Medicare $17 billion a year.

But an early evaluation found that only four of the 48 groups studied in the Community-based Care Transition Program significantly cut readmissions compared with those in a control group.

At the same time, 29 groups have either withdrawn from the program or have been terminated by the Department of Health and Human Services for failing to achieve targets, agency officials said. The CCTP project, which has grown since this evaluation was done, now has 72 participating sites that administration officials hope will reduce readmissions and lessons in improving post-hospital care.

The evaluation, produced under contract with HHS by the consulting firm Econometrica, is one of the first independent analyses of an innovation-lab project to be made public. It is dated May 30, 2014, but was posted on HHS' website Jan. 2.

But analysis said it's too soon to pronounce substantial judgment on CCTP.

"It's really too early to tell," said Ellen Lukens, who leads the practice on hospital and post-hospital care at Avalere Health, a consulting firm. "Can you really evaluate this when it's been such a short period of time?"

A five-year experiment, the program signed its first round of deals with community agencies in late 2011, and its fifth and last round in March 2013. Econometrica's report covered partial results from groups participating in the early rounds, including some for which only a few months of data were available. Congress required the lab to closely monitor all projects, which explains the early evaluation.

With less than one site in 10 significantly reducing readmissions, the result "seems kind of wimpy," said Eric Coleman, a professor at the University of Colorado whose previous work on care for discharged patients influenced the CCTP program. He said he remains optimistic about the project, however, also noting that the results are early. He also praised HHS for cutting off nonperforming groups.

"This is really the first glance of the first two waves of the program," said HHS spokesman Raymond Thorn. "It's too early to determine whether this model is failing or not. We will have successes."

CCTP is one of dozens of experiments being run by HHS' innovation lab, which has a 10-year, $10 billion budget.

Paying community agencies to work with hospitals was thought to be one potential way of reducing readmissions. But rather than getting grants, the agencies are paid according to the number of cases they handle.

The program faces several challenges. In awarding funding, HHS favored groups working with hospitals with high readmission rates, perhaps making success more difficult.

Plus numerous groups and hospitals are working to cut readmissions through other means. That increases competition for aging agencies trying to make their mark, and makes it more difficult to measure the impact of each program.

Readmissions have been dropping nationally since Medicare began penalizing hospitals in late 2012 for having too many. Some CCTP groups did reduce readmissions — but so did hospitals that didn't get help. That means the system improved overall in those areas and money was saved, but statistically the aging agencies did not show up as the critical factor.

Coleman faulted HHS for requiring agencies to file detailed reports on care models and administration rather than letting them focus on the main job.

"If it doesn't reduce readmissions it's game over, so why do you want all these process measures?" he said. "If we want these sites to succeed, we need to get out of their way."

Originally more than 100 agencies agreed to participate. But 29, including New York Methodist Hospital and Pennsylvania's Delaware County Office of Services for the Aging, have withdrawn or didn't have contracts renewed because they missed readmission-reduction or enrollment targets, HHS said.

A complete list of agencies that have left the program is here.

The health-law innovation program also includes projects using accountable care organizations to cut costs and improve care quality; giving more resources to primary-care doctors to coordinate care; and awards to make Medicare more efficient.

Administration officials like to compare the lab to a venture capital fund, in which many investments are expected to fail but a few succeed spectacularly. Many Republicans think it's a waste.