ACO, MSSP, BPCI, HIE, CQM, P4P, PCMH, yadda, yadda, yadda … The litany of acronyms describing changing P&D (excuse me, payment and delivery) models can sometimes numb the senses. But it would be unwise to allow the latest healthcare jargon to lull you into an AIC—an acronym-induced coma, for which I believe there is a new ICD-10 code—because the world might look a lot different when you snap out of it.
Little debate exists that the U.S. healthcare system needs to transition from turnstile medicine to value-based care, from a predominantly fee-for-service payment model to one that emphasizes accountability for population health. This, of course, is not a novel concept, so the biggest challenges relate to how we get there. As many skeptics have argued, the same dynamics have existed before – unsustainable healthcare costs and too little value for our money – so the Talmudic question arises: Why is this era different from all other eras?
- EHRs have changed the playing field completely
- Reporting of comparative performance is now embedded into the delivery system
- We understand the centrality of patient engagement
- Today’s incentives reward greater accountability and value
There are some fundamental differences compared to, for example, the environment that existed in the 1990s when some experts believed managed care would change the underlying cost structure of the health care system. A majority of providers now have implemented electronic health records (EHRs) and an increasing number are – or soon will be as a result of Stage 2 “Meaningful Use” – able to exchange clinical data across network and vendor boundaries. The expectation that quality measurement will be used for holding providers accountable has taken root and most health care organizations regularly submit standardized performance data to public and private payers, purchasers and independent accrediting bodies. Providers increasingly recognize that their success in population health management relates to their ability to effectively engage with their patients in collaborative relationships.
Layered on top of that infrastructure, a new set of incentives has emerged that increasingly rewards greater accountability. Even within the fee-for-service system, CMS carrot-and-stick pay-for-performance programs—meaningful use of EHRs, readmissions reductions, value-based payment and hospital acquired conditions penalties—have driven providers to focus on some critical aspects of quality and efficiency. Although each program may only involve a modest penalty, they grow over time and they add up quickly when taken together. In fact, over the next few years, hospitals could lose a portion of Medicare reimbursement for inadequate performance.
This is not say that we’ve come anywhere close to “figuring it out” when it comes to issues like performance measurement and health IT; we still have a long way to go. Although we certainly can’t demonstrate causation, it may not be a coincidence that remarkable reductions in cardiovascular, cerebrovascular and diabetes mortality transpired soon after the introduction and widespread use of standardized, intermediate outcome HEDIS measures for these conditions in the late 1990s. The challenge now is to take performance measurement to the next level.
With measurement infrastructure in place, the new payment and delivery models can be successful in driving the health care system toward true accountability for population health. In addition to widespread private sector experimentation, the myriad demonstration programs underway through the Center for Medicare & Medicaid Innovation (CMMI) offer unique opportunities for improving care coordination and fundamentally shifting payment toward a value-based orientation. What we learn from CMMI demonstration programs will help us to determine whether single bundled payment for episodes of care or population-based accountability through ACOs can really drive a different approach to care management and coordination. It is important to note that the Affordable Care Act gives the HHS Secretary the authority to convert CMMI demonstration programs to national payment policies should the CMS Actuary conclude that they save money (without harming quality), improve quality (without costing more) or both.
It is too early to tell exactly what these eventual models will look like, though it’s a good bet that differences from initial demonstrations will emerge. That makes an already messy middle ground a huge challenge for all stakeholders grappling with their new roles in the healthcare ecosystem. Yogi Berra may have been talking about the U.S. health care system when he said, “You’ve got to be very careful if you don’t know where you are going, because you might not get there.”
However, healthcare organizations that engage their clinicians and patients in helping to figure it out are much more likely to end up heading in the right direction.
Joshua Seidman, PhD, is Vice President at Avalere Health, and is now leading the new Avalere Center for Payment & Delivery Innovation. He also currently serves as President of the Society for Participatory Medicine. He can be reached at email@example.com or found on Twitter @jjseidman