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It's wonky stuff, health care payment reform, but if you care about your spiraling medical costs, you have to care about attempts to change the $3 trillion health care system to bring them down while still improving your care.
Among the dozens of other pieces of the sprawling Affordable Care Act, the law funneled hundreds of millions of dollars in support for such attempts through a federal agency called the Center for Medicare and Medicaid Innovation.
It particularly buttressed "Accountable Care Organizations" or ACOs, a central payment reform idea that boils down to paying doctors for how well you do rather than just for each thing they do for you.
So given the overwhelming likelihood that Obamacare is about to be repealed under President Trump and the Republican-led Congress, what happens to these experiments now?
Like much else, that remains unclear until the replacement for Obamacare is decided upon. But for possible scenarios, I turned to Dr. Tim Ferris. He has senior vice president titles at Massachusetts General Hospital and Partners Healthcare, but I think of him as payment-reformer-in-chief at the biggest health care system in the most health-care-reform-minded state.
He says the experiments have cost hundreds of millions of dollars nationwide, but also shown that they can save hundreds of millions of dollars, and there's no going back. Our conversation, edited:
So you have shown that by doing this sort of payment reform, you can in fact get better care at lower cost?
We have shown that, and the evidence that we can do that is gaining ground. We have increasing confidence that we are able to do that, because the data suggests that we are.
It is important to point out that this takes a long time. It's really, really hard to change the fundamental workflow processes in the delivery of care. Because, importantly, those changes have to be careful not to hurt the patients, and also the people who are delivering care.
This is a long-term journey. And that long-term journey requires a steady investment — a pretty significant investment. And as we go down this path, I'd say we are 20 to 30 percent implemented. Which means that a big change in federal policy right now has significant potential to undermine what we believe is a really productive path for health care to go down.
What could be the repercussions for your work of an Obamacare repeal?
Like everyone else, I don't have a crystal ball of what's going to happen. But I could use the approach of bookends, of worst-case scenario or best-case scenario.
Worst case: If the Center for Medicare and Medicaid Innovation were eliminated, and the experimental payment programs went away with it, then it would be difficult to justify the effort and expense that we've been putting into our ACO programs at Mass. General, Brigham and Women's Hospital and all the members of the Partners system. And that would be a pretty big deal.
How much has been invested in them so far?
Over the last five years, we've been investing approximately $50 million dollars a year in these programs.
Are you saying that might not continue?
What I'm saying is, if they eliminated the Center for Medicare and Medicaid Innovation and the payment programs it's running, that would remove a significant justification for the expenditures, the very high expenditures on infrastructure within our organization and which all ACOs have to spend.
We still live in the state of Massachusetts, and the state has its own laws and regulations, so we would still be under some pressure on the commercial side, and most recently on the Medicaid side. So it wouldn't completely eliminate the incentive for ACOs.
But if you think of health care payment being a three-legged stool — with Medicare being one leg, commercial insurance being a second leg and Medicaid being a third leg — changes in the Center for Medicare and Medicaid Innovation and other federal policies could affect two of those three legs, both Medicare and Medicaid.
And the state could make up for some of those but not by much?
The largest expense in health care, and from my perspective the greatest opportunity for improvement, is in the Medicare population. And so it would remove not just the Medicare leg but also probably the largest opportunity to make health care better.
Are ACO's a partisan thing, or is there consensus that medicine needs to get away from 'fee-for-service,' paying doctors per piece of care?
ACOs have their detractors and their supporters. In general, I don't see change to the payment system as a partisan, Republican/Democrat issue. In fact, last year's MACRA legislation, which reinforced the idea that we need more changes to the payment system, was passed in a fully bipartisan way.
And so that's one of the things that makes this difficult to predict. Because the signals have not been consistently clear, positive or negative.
So what's the best-case scenario?
The best-case scenario, from my perspective, is that we press the pause button, meaning we don't eliminate anything that currently exists. But I will say, from the health care provider perspective, we're getting a bit weary of constant new regulations and constant new payment penalties and constant new measurement systems.
And so I would say: 'Great effort so far, really productive. Let's see how this plays out over the next four years.' So don't touch it, basically, leave it in place, let us tweak. There are little problems, some of the adjustments, in-the-weeds kind of things. There are definitely improvements we can make. I think these new payment mechanisms are directionally correct but they have some flaws.
We need some time to work on those flaws, and we need some time to let this stuff play out. Because as I've said, I think it's moving in a really positive direction overall, and I think the facts will bear that out. I think we're going to see, in the next two or three years, significantly more evidence of bending the cost curve.
So is there a champion in Washington who's carrying this ball? Do we know how the health secretary nominee, Rep. Tom Price, feels about all this?
It's difficult to answer that question because I've heard contradictory statements. But I will say that the testimony that he gave to date suggests that he may be open to leaving the Center for Medicare and Medicaid Innovation in place, and he may be open to allowing the current payment policy experiments to continue.
Some of the new payment policy changes have been mandated rather than voluntary. My understanding of his position is he would prefer that they be voluntary. I think that's fine. If that were to be the outcome of this, I think: terrific.
In the very worst-case scenario, if the federal government no longer supports payment reform, what happens to all the work you've been doing?
I think because we live in Massachusetts, and we have chapter 224 and the Health Policy Commission, I think we will largely continue along the same road. Because our greatest advances have been in the Medicare program, it will be more challenging not to have the opportunity to identify a population of Medicare beneficiaries and put programs in place that we believe are benefiting them — like home hospitalization, like e-consults, like our home-based palliative care program, our care management program for our sickest patients. Without Medicare participation, it will be more difficult to demonstrate our effectiveness and therefore more difficult to justify the investment.
If and when Obamacare is repealed, will it mean that a lot of money that could have been spent on care has been wasted, because it had to be spent on complying with federal rules — rules that now will change?
There are two answers to that question: one is the big-picture answer, and then the more narrow question about the rules associated with the ACA legislation.
In the bigger picture, health care is one of the most regulated industries. And the percent of our total costs that is spent on compliance with regulations is sort of stunning — some have estimated it at 10%.
A lot of that is good and important, protecting safety. I would say most people in health care believe that a significant fraction is excessive. And as we pursue this changing reimbursement system and the changing incentives, there's been a lot of attention on reducing health-care costs through the management of the delivery of care.
But unfortunately, both in the Obama administration and previous administrations, there has been almost no attempt to examine the value of the regulatory burden in health care. And I think in the future, it is going to be really important to take a serious look at the regulatory burden in health care.
It's possible that the new administration may well focus on the regulatory burden, and that could be a real win for health care, and a win for the patients and a win for the total cost problem. All three. The Republicans are often in the position of criticizing regulatory burden. They have an opportunity here.
But in the smaller picture, do you think that there will be things that the hospital has had to do over the six years of Obamacare that will in fact end up being jettisoned, things that cost a lot of time and money?
Most of the impact of the ACA legislation has been on insurance coverage. The regulatory apparatus was there before the ACA legislation and continues through it.
Ultimately, do you think that whatever happens politically, what you've shown cannot be fully undone?
We are committed to the path that we're on, because we've demonstrated — at least to ourselves, maybe not to everyone else yet — that we're taking better care of our patients and we're doing it in a more responsible way by lowering the total medical costs of the patients that we care for. Just speaking for ourselves, we're not going to back away from that path.
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