Accelerating Innovation At The Centers For Medicare And Medicaid Services

Donald Berwick and Richard Gilfillan

Posted 10/21/11 on The Health Affairs Blog

Copyright ©2011 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc. 

Innovation has revolutionized medicine.  Technology enables us to peer into the depths of the human body to diagnose disease, offer life-saving pharmaceutical treatments, and unlock the power of genomics to help predict, diagnose and treat disease.

Innovation is vital to our health care system and has made the American health care the envy of the world in many respects.  Despite this progress, it’s also true that too often—as any health care provider will tell you—we still deliver and pay for health care the same as we did 50 years ago.

Delivering the highest possible quality of care to all Americans, while reducing overall health care costs, will require major innovations in care delivery and payment to create the conditions for the best, most effective, most affordable health care.  This is what the Affordable Care Act does. Thanks to the health reform law, the Obama Administration is moving forward to implement a menu of new options to transform health care delivery and lower costs with higher quality, more coordinated and patient-centered care.

Not all of these options will be right for everyone. Our goal is to give doctors and hospitals the freedom and flexibility to implement innovative new practices that work for them. And we’re pleased to report that we are well on the way to achieving this goal.

CMS has created a broad array of pathways for all sizes and types of health care providers, accelerated with the Affordable Care Act’s creation of the CMS Innovation Center, which opened its doors late last year.  The Innovation Center has already identified new ways to deliver better care and better health at reduced costs for beneficiaries in the Medicare, Medicaid and Children’s Health Insurance Program—which ultimately will benefit all Americans.   Some of these ideas came directly from posts to the Innovation Center’s website and regional listening sessions which drew over 5,000 stakeholders from across the country.

These initiatives include the Partnership for Patients, which the Department of Health and Human Services launched earlier this year.  It is a new public-private partnership devoting up to $1 billion to support physicians, nurses and other clinicians reduce hospital-acquired conditions and improve transitions in care.

To date, over 6,000 organizations—including more than 3,000 hospitals—have joined the Partnership for Patients and pledged to reduce preventable harm in hospitals by 40 percent and readmissions to hospitals within 30-days of discharge by 20 percent in the next three years. This partnership has the potential to save 60,000 lives and reduce millions of preventable injuries and complications in patient care. It could potentially save as much as $50 billion to Medicare over 10 years.

The Bundled Payments for Care Improvement initiative sets out the patient-centered approach to redesign payment so it supports episodes of care in four broadly defined models of care. Three models involve a retrospective bundled payment arrangement; one model would pay providers prospectively.  They offer providers flexibility in choosing the conditions they believe make sense to bundle; creating the structure around these new bundles to deliver high-quality, coordinated care, and determining participating providers’ share of payment.

There is a Federally Qualified Health Center Advanced Primary Care Practice Demonstration managed jointly by the CMS Innovation Center and the Health Resources and Services Administration.  It will test whether advanced primary care practice can improve care, health, and reduce costs for up to 500 of these community health centers, by providing support for them to reorganize as Patient Centered Medical Homes.

Under the new Multi-payer Advance Primary Care and Comprehensive Primary Care initiatives, Medicare will pay primary care practices a monthly fee in addition to fee-for service payments in selected markets, to deliver higher quality, more coordinated, more affordable care.  Clinicians will help their patients with serious or chronic diseases follow personalized care plans.  Patients will get 24-hour access to care and health information.  They, and their families, will be engaged in their care.  And Medicare will work with private and state health insurance plans to offer similar support to primary care practices that coordinate care better for their patients who do not have Medicare.

To strengthen Medicare and Medicaid the Medicare-Medicaid Coordination Office and the CMS Innovation Center are collaborating on two new payment models that will help cut the cost of caring for people eligible for both programs and improve the quality of care these Americans receive.  We hope to test these models across the country in programs that could reach up to two million dual Medicare-Medicaid enrollees.

And to encourage doctors and specialists to work together, we have finalized important guidelines for Accountable Care Organizations.

The Medicare Shared Savings Program help providers offer higher quality, more coordinated and patient-centered care and get rewarded for it. They will be measured using patient experience of care surveys, process and outcome measures.  The higher the quality of care those providers deliver the more shared savings they will keep.

The Advance Payment initiative will test whether pre-paying a portion of future shared savings will increase participation in the Medicare Shared Savings Program.  It will allow ACOs to improve care for beneficiaries and generate Medicare savings more quickly, as well as increase the amount of Medicare savings.

The Pioneer ACO Model is a “Shared Savings Program” for organizations with experience integrating care across settings.  The Pioneer Model tests a rapid transition to a model in which providers are paid according to their ability to improve the health of their patient population, rather than for each, specific service they provide, and requires organizations to engage other payers as they move toward outcomes-based contracts.  We expect the Pioneer ACO sites, which we will announce later this year, to show us what we can achieve with highly coordinated care for Medicare fee-for-service beneficiaries, while saving Medicare up to $430 million over three years.

The Innovation Center initiatives complement the direct changes made by the Affordable Care Act, ranging from broad-based implementation of value-based purchasing to realignment of payments toward primary care and prevention to unprecedented new tools to crack down on fraud and abuse.  They also build on the early investments the Administration made in health information technology, patient-centered outcomes research, and prevention.

These changes are critical because, over the years, we’ve only made modest changes in how we see patients in our clinics and hospitals, how providers communicate with each other and with patients, and how we think about caring for an entire community of patients over time.  This has yielded a health care system of misaligned financial incentives, often siloed, uncoordinated, and unsupportive of patients and doctors – often unaffordable for families, communities, business and our nation as a whole.

Thanks to the Affordable Care Act, CMS is working hard to support physicians, nurses, and other health professionals who would welcome new opportunities to work with engaged patients and to be financially supported for keeping people well.

Together we can innovate our way to a system that provides better care, and better health, and through these improvements, reduce cost.  We look forward to being a trusted partner in our nation’s journey toward patient-centered, coordinated care.

Don Berwick MD is CMS Administrator and was previously the Founder and Executive Director of the Institute for Healthcare Improvement in Boston.

Richard Gilfillan MD is Acting Director of the CMS Innovation Center. Before CMS, Dr. Gilfillan served as president and CEO of Geisinger Health Plan and Executive Vice President for System Insurance Operations at the Geisinger Health System. 

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