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Bringing the “Art of the Deal” to Healthcare

Obamacare, at least in its original incarnation, is on its way out. The pressing question now is whether “art of the deal” health care will remain.

“The Art of the Deal” is the title of the 1987 best-seller that catapulted real estate developer Donald Trump to national prominence. Although Trump has denounced Obamacare as a “disaster,” and Republicans have voted for its repeal, their attacks have focused mostly on sections of the Affordable Care Act that expanded access to health insurance.

At least as important, however, are the lesser-known parts of the law that have let Medicare use its financial clout to push for better, safer, and less expensive medical care. In Trump’s terminology, it’s been a “terrific deal” for anyone who’s seen a doctor or gone into the hospital, saving a staggering 125,000 lives and $28 billion in just four years, according to the Department of Health and Human Services.

Unfortunately, Trump’s pick as HHS secretary, orthopedic surgeon and Georgia Republican Representative Tom Price, appears at best a lukewarm supporter of this approach. Will Trump protect Americans’ great health care deal? Or might Price be the first cabinet secretary to hear, “You’re fired!”?

The path that Medicare is following, linking provider payments to patient safety and care quality goals, began in the private sector in the late 1980s as the “buy right” strategy developed by health policy activist Walter McClure. It gained a toehold in government under the George W. Bush administration, and flourished when rebranded as “value-based purchasing” under President Obama.

Value-based care initiatives in the ACA include reducing payments for preventable hospitalizations, establishing mandatory reporting of physician quality, and payment arrangements that emphasize care coordination. Those kinds of initiatives have garnered widespread bipartisan support, albeit more vocally outside Washington.

A few years ago, Price and I were keynote speakers at a conference sponsored by a conservative Florida business group. He was applauded for denouncing the ACA; I was applauded for praising it. Price spoke about government-sponsored health insurance, while I laid out the law’s impact on the cost and quality of care.

Business leaders appreciate that HHS, the largest health care purchaser in the world, exerts leverage the private sector alone can only dream about. Or as Trump put it in his book, “Leverage: don’t make deals without it.”

Value-based purchasing saves lives and money. According to the Institute of Medicine, almost one-third of all health care expenditures are unnecessary. In the private sector, which is seeking to move in the same direction as the ACA, that magnitude of savings on health costs can keep employers from moving jobs to cheaper venues overseas.

Most physician organizations now back value-based purchasing, understanding that accountability for quality and safety is the right path to controlling spending — both morally and clinically. (It doesn’t hurt that one alternative to “buy right” is “buy cheap,” meaning cutting physician payments across the board.) Most physician groups supported the 2015 Medicare Access and CHIP Reauthorization Act (MACRA) that made value-based purchasing Medicare’s mainstream payment methodology, and the law passed Congress with overwhelming bipartisan support.

Although some MACRA provisions went into effect on Jan. 1, 2017, implementing them can be slowed and future requirements diluted without strong support from HHS. Price, though he voted for MACRA, also belongs to a far-right physician group that seems to want to shove third-party purchasers, government or private, out of the picture. Without their support, scared and sick patients will be reluctant to challenge their doctors. Making Americans pay more out-of-pocket to become better “consumers,” as Price and other Republicans advocate, doesn’t change that equation.

Trump trumpets his ability to “think big,” but Trumpcare for health insurance doesn’t go far enough. America spent $3.2 trillion on health care in 2015, with $642 billion of that spent by Medicare. Trump needs to tell Price that the far right isn’t right, and then protect the leverage that’s giving every patient, and every doctor trying to do the right thing, a terrific deal.

Michael L. Millenson is president of Health Quality Advisors LLC in Highland Park, Ill., an adjunct associate professor of medicine at Northwestern University’s Feinberg School of Medicine, and author of “Demanding Medical Excellence: Doctors and Accountability in the Information Age.”

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Steven FindlayroatesAllanNiran Al-AgbaMargalit Gur-Arie Recent comment authors
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Steven Findlay
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Steven Findlay

Nice piece Michael. The THCB doc brigade’s (below) bashing was predicable — at his point on THCB. Hard core group of naysayers on all things P4P, QM, ACO, and MACRA. As is their right. Who knows they could end up being right…because this (VBP writ large) is still an experiment and past ones have indeed failed. I wish, though, that the commenters would at least stipulate the basic economic fact of financial incentives; they do work when designed well and carefully. For that there is indisputable evidence. I do agree with the VBP detractors that the Q&P measures need to… Read more »

roates
Member
roates

The main concern with MACRA and similar P4P initiatives should be patient safety.

http://www.vox.com/the-big-idea/2017/1/25/14375776/pay-for-performance-doctors-bonuses

“Economists argue that such financial incentives motivate physicians to improve their performance and increase their incomes. In theory, that should improve patient outcomes. But in practice, pay-for-performance simply doesn’t work. Even worse, the best evidence reveals that giving doctors extra cash to do what they are trained to do can backfire in ways that harm patients’ health.”

The lack of embrace by docs of MACRA reflects a fatigue of the masses. Imagine if the Emperor repeatedly revealed his new clothes…this time they are simpler-better

roates
Member
roates

Most health professionals actually at the point of care would welcome a shift to paying for greater value vs. volume. I also used to be a believer that external-centralized mandates could play a role in this. The evidence is overwhelming that these are currently creating net harm for the people. Annualized performance metrics can be very useful for internal quality improvement initiatives. Unfortunately, within complex social systems, performance is more related to SoDH and tend to fall apart when applied to unique individuals with multiple diseases. Individual clinicians can affect about 20% of the performance. To be useful, metrics should… Read more »

Niran Al-Agba
Member

MACRA was passed as an “empty shell” without framework. It indeed had bipartisan support, but will never work successfully as those have envisioned. I know most of you health policy, economics, and other non-doctor types are going to have to “kick the tires” before you realize rounding up physicians is not as easy as you think. Saying no to MACRA is about the BEST decision anyone can make right now for the healthcare system. Those in clinical practice who provide actual health care to people are going to know more than the university professors of economics expounding on how wonderful… Read more »

Allan
Member
Allan

“Those in clinical practice who provide actual health care to people are going to know more than the university professors of economics expounding on how wonderful value based care is going to be. ”

Thomas Sowell in his book “Intellectuals and Society” talks about those professors and their theories at length explaining how those professors don’t pay the price when their theories go awry so they can repeat their mistakes over and over again. I think the policy wonks should review that book before suggesting solutions to our healthcare problems. They have done enough damage.

Margalit Gur-Arie
Member

May be useful to remember that if confirmed Rep. Price will no longer be able to write legislation….. That said, and in my opinion unfortunately so, I think there is overwhelming bi-partisan support, including from Dr. Price for the “value-based” thingy, because everybody who contributes big money to campaigns stands to benefit from it.

anish_koka
Editor

1.MACRA had overwhelming support from physician organizations as a replacement for a non working SGR. No one had any idea how MACRA would be realized. After looking at the Byzantine approach To health care delivery, My advice to anyone that can is to say no to MACRA. 2. The gulf between those delivering care and those physician leaders who spend more time in meeting than taking care of patients is very wide at this point. 3. There is no evidence that pay 4 performance works for patients and overall we are spending more money on healthcare now than ever before.… Read more »

meltoots
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meltoots

Not sure where to even start with this article. First, we need less “Quality advisors” as a first savings step. Second, MACRA was passed to stop SGR. Now that the bill is actually being prepped, it hit every buzzword “value” “accountable” “bundle” care arrangement. Value is value based self reporting, its not outcomes. The reduction in readmits is the exact inverse of observation admits. So what was prevented? Just a name of an admit to obs. Way to go. ACO and bundles-play them out- no one will want anyone that “costs” care in their bundle or ACO. Forget complicated patients… Read more »