HHS Pledges To Quicken Pace Toward Quality-Based Medicare Payments | Kaiser Health News
The Obama administration Monday announced a goal of accelerating changes to Medicare so that within four years, half of the program’s traditional spending will go to doctors, hospitals and other providers that coordinate their patient care, stressing quality and frugality.
by Health and Human Services Secretary Sylvia Burwell is intended to spur efforts to supplant Medicare’s traditional fee-for-service medicine, in which doctors, hospitals and other medical providers are paid for each case or service without regard to how the patient fares. Since the passage of the federal health law in 2010, the administration has been designing new programs and underwriting experiments to come up with alternate payment models.
Last year, 20 percent of traditional Medicare spending, about $72 billion, went to models such as accountable care organizations, or , where doctors and others band together to care for patients with the promise of getting a piece of any savings they bring to Medicare, administration officials said. There are now 424 ACOs, and 105 hospitals and other health care groups that accept bundled payments, where Medicare gives them a fixed sum for each patient, which is supposed to cover not only their initial treatment for a specific ailment but also all the follow-up care. Other Medicare-funded pilot projects give doctors extra money to coordinate patient care among specialists and seek to get Medicare to work more in harmony with Medicaid, the state-federal health insurer for low-income people.
Burwell’s targets are for 30 percent, or about $113 billion, of Medicare’s traditional spending to go to these kind of endeavors by the end of President Barack Obama’s term in 2016, and 50 percent — about $215 billion — to be spent by the end of 2018.
The administration also wants Medicare spending with any quality component, such as bonuses and penalties on top of traditional fee-for-service payments, to increase, so that by the end of 2018, 90 percent of Medicare spending has some sort of link to quality. These figures do not include the money that now goes to private insurers in the Medicare Advantage program, .
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Monday’s announcement did not include any new policies or funding to encourage providers, but Burwell said setting a concrete goal alone would prompt changes not only in Medicare but also by private insurers, which are also trying some of these alternative models. Leavitt Partners, a consulting firm, counts 317 commercial ACOs and 40 in the Medicaid program.
“For the first time we’re actually going to set clear goals and establish a clear timeline for moving from volume to value in the Medicare system,” Burwell said at an announcement at the department’s headquarters, where she was joined by leaders from insurance, hospitals and doctors groups. “So today what we want to do is measure our progress and we want to hold ourselves in the federal government accountable.”
Some providers have eagerly embraced the new payment models, some with success. Roughly a quarter of ACOs saved Medicare enough money to . Others are wary, particularly since they could lose money if they fall short on either saving Medicare money or achieving the dozens of quality benchmarks the government has established.
“ACOs are quite expensive to set up,” said Andrea Ducas, a program officer at the Robert Wood Johnson Foundation, a New Jersey philanthropy that is funding research into ACO performance. “There’s a significant upfront investment and if you’re not sure you’re going to make it back, there’s a pause.”
In the largest ACO experiment, the Medicare Shared Savings Program, 53 ACOs saved enough money in 2013 to get bonuses from the government, but 41 spent more than the government estimated they should have. Those ACOs did not have to repay any money, but in future years Medicare intends to require reimbursements from those who fall short. Providers have been pushing Medicare to increase the cut they get from these programs and lessen the financial risks in ACOs and the other programs.
“Government needs to do more to make sure there’s more shared savings going back to the providers,” said Blair Childs, an executive with Premier, a company that assists hospitals and providers in establishing ACOs and other models.
It is still too early to know whether these alternate payment models actually improve the health of patients and whether the savings that have been achieved so far — often by focusing on the most expensive patients — will plateau. Studies on the success of these programs have shown mixed results.
“We still have very little evidence about which payment methods are going to be successful in getting the results we want, which are better quality care and more affordable care,” said Suzanne Delbanco, executive director of Catalyst For Payment Reform, a California-based nonprofit that has been
in the private sector.
“We’re just wanting to avoid a situation where a few years from now, where we’ve completely gotten rid of fee-for-service, we don’t want to wake up and say, ‘Oh my gosh, we did it and we’re no better off.’”
This article was produced by Kaiser Health News with support from .
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Savings | The American SpectatorUPDATE 1-U.S. govt unveils goal to move Medicare away from fee-for-service
(Adds details on employers, Wall Street,
stakeholders,
background)
By David MorganWASHINGTON Jan 26 (Reuters) - The Obama administration on
Monday unveiled an ambitious plan to control health costs by
moving the $2.9 trillion U.S. health systems away from costly
fee-for-service medicine, beginning with the Medicare program
for the elderly and disabled.By the end of 2018, Health and Human Services Secretary
Sylvia Burwell told reporters that 50 percent of traditional
Medicare's $362 billion in annual payments would go to doctors,
hospitals and other providers that participate in alternative
payment models which emphasize cost containment and quality of
care.Officials, who hope to see the initiative matched by private
insurers, employers and state Medicaid programs for the poor,
said the move was intended to head off a resurgence in
healthcare cost growth from an historically low 3.6 percent in
2013 to a projected 6.6 percent in 2020.The administration announced its goals after Burwell met
with private and public sector stakeholders including insurers,
consumer and provider groups and employers Boeing Co and
Verizon Communications Inc.Wall Street analysts said for-profit hospitals and private
insurers would be well positioned to benefit from a new shift
toward lower-cost care delivery.Groups representing doctors and hospitals said the move
could mean greater flexibility for their members in determining
care delivery, while consumer representatives said the
unprecedented goals could boost the quality of care.About 20 percent of traditional Medicare payments, a sum
worth $72 billion, currently go to providers with cost-saving
business models. The remainder are based on fee-for-service
payments that reward providers for the volume of care they
provide. Fee-for-service has been blamed by policymakers for
promoting higher costs, mediocre care and unnecessary
procedures.The administration's goals would be phased in by first
increasing the participation of alternative care models to 30
percent of Medicare payments by the end of 2016.Officials described the 50 percent goal for 2018 as a
"tipping point" that could help make payment reform mainstream
across the U.S. health system.Within four years, the administration expects all but 10
percent of traditional Medicare to be linked to new quality and
efficiency standards, including most of the remaining fee-for-
service providers.The government has also been experimenting with payment
models that officials say have generated $417 million in savings
to Medicare. But the effort could face long odds. New care
models have shown limited progress in controlling costs and
little evidence of being able to sustain cost savings.
(Reporting by David M Editing by James Dalgleish and
Cynthia Osterman)
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