Payment reform on its own will not cure our high medical costs. We need to make fundamental changes in the way we deliver care - and that won't happen just because some care is no longer paid for via "fee for service."
Changes that we need include:
- Advancing "disruptive innovations," that lower costs dramatically even if they lack some elements of traditional care. (This includes midwifery delivery in birth centers for low risk pregnancy, and lightweight ultrasounds that can be used at the point of care)
- Increased coordination among providers
- Better "hot spotting" to identify the highest risk patients and prevent hospital admissions
- Evidence based use of imaging
- Providers who are sensitive to resource cost of what they order
Right now, health care providers are doing well overall - and changing the underlying business is a threat to that success. Payment reform provides the necessary threat to push integrated delivery networks and other provider organizations to seriously consider making changes that could lower revenue.
So while payment reform alone won't lead to higher value care, lack of the viable threat of payment reform could halt progress on health care delivery redesign. Why should a CFO agree to an expensive program to halt high margin but preventable hospital admissions?
I co-teach a provider payment course in a graduate degree program for mid-career physician executives at the Harvard TH Chan School of Public Health. Watching these talented physicians and learning about the efforts they are making to transform health care in their organizations has made me guardedly optimistic about the chances that the "accountable care" movement could substantially improve health care value.
This weekend, the buzz was around a comment by one of the professors that "MACRA is dead." MACRA, the Medicare Access and CHIP Reauthorization Act, which eliminated the physician "sustainable growth rate (SGR)" regulations which would have cut Medicare professional reimbursement by more than a quarter, defined specific Medicare penalties for providers who were not effectively using electronic medical records, and allowed physicians participating in alternative payment models to avoid these penalties.
MACRA was passed by a bipartisan majority in 2015 (54-45 in the Senate and 392-37 in the House). So some have felt that the payment reform in MACRA is "safe." I'm afraid I disagree.
MACRA had the support of many conservative Republicans who voted for this in part because it eliminated the hated SGR. Many, including now-HHS Secretary Tom Price, have argued that the Obama Administration rulemaking around the bill would create undue demands on physicians. Price argued that payment reform should be voluntary. But voluntary bundled payments don't create the burning platform necessary to drive change in health care delivery.
Some delivery systems that have been deeply committed to transforming themselves will push ahead with efforts to improve quality of care and lower costs. But many systems are likely to put such efforts on the slow track, as they wait to see whether the Trump administration will do the hard work of administrative rulemaking to support payment reform.
As we discussed the prospects for payment reform, I sensed a deep sigh of disappointment among these physician executives who have devoted their professional lives to redesigning health care.
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