Despite looming ACA repeal, key aspects of value charge ahead
While Republicans are taking steps to unwind Obamacare, the basic tenets of value-based care are advancing, and IT will be key for providers, says John Halamka.
The Affordable Care Act didn’t conceive the idea of orienting healthcare delivery and payment around demonstrated value, but it was the midwife that finally brought value-based care into the real world and helped make it the irresistible force it is today.
Like prospective payment for hospitals, relative-value payment formulas for physicians and other past Medicare reimbursement schemes, the ACA’s experimentation with accountable care organizations, shared savings and inclusive payment for bundles of services compelled healthcare providers and payers to take on a new vision for care delivery. Ultimately it called for significantly different, substantial investments in information technology to support new approaches.
The prospect of repealing and replacing the ACA, now being actively pursued by the Republican congressional majority, throws a blanket of doubt over the course of value-based care initiatives. Without the federal resolve to keep pushing for sustainable value-based solutions, private-sector sources championing the transition might not have enough influence on their own, some industry watchers say.
“Large employers have very much appreciated the leadership of the federal initiatives around value purchasing, and the programs [such as] the ACOs and bundled payment and so on,” says David Lansky, president and CEO of the Pacific Business Group on Health.
But “the jury is out,” Lansky says, on whether the new administration’s interest in a consumer-oriented, less regulated model will undermine the drive toward value-based purchasing, given “certainly signals…that they are not committed to some of the elements that were part of the federal value initiative.” A more dramatic shift to account-based plans, consumerism, less bundling and more open products in the insurance marketplace “will reduce the drive toward value-based contracting, and it could take us backwards in terms of the commitment on the part of providers and payers.”
But the importance of curbing the government’s rising healthcare costs, which underpins the ACA’s value initiatives, is the same or even more important for Republicans now in charge, a variety of healthcare watchers say.
“There is, I think, a uniform belief that with 17 percent of our gross domestic product being spent on healthcare, we are not a competitive society and therefore we must move to value-based purchasing and, therefore, the IT supports for that,” says John Halamka, CIO of Beth Israel Deaconess Medical Center, Boston.
The ACA has led healthcare organizations to invest in software and infrastructure to support care management, telemedicine, care in the home and other components of value-based approaches, and “all those things should be equally important to Trump as they were to Obama,” Halamka asserts.
With Republicans focused on cost savings in the federal budget, any evolution of value-based purchasing will emphasize generating those savings, says Eric Cragun, senior director for health policy at the Advisory Board, Washington. “Some form of value-based payment will continue moving forward.”
Regulatory reassessment
The task of building a viable structure around a purely conceptual model for doing healthcare business a whole different way introduced many requirements to comply with regulations, but those were necessary at the start, says Kevin Arner, chief strategy officer of Global Healthcare Alliance, Fort Worth.
The compliance mindset provided leverage to drive value-based payment models and is useful to the next generation of healthcare, whatever it becomes in the next few years, says Arner. “The greatest benefit of some of those regulatory changes was to set a pace of change for the market, and so we had deadlines that the industry could move toward, we had alignment with certain standards and methods. Going forward, I don’t think the industry will change from that.”
What will change, observers predict, is the amount and detail of regulation in value-based initiatives. “I honestly believe that the transition to the Republican market-based philosophy and a lighter regulatory perspective will lead to greater growth in value-based payment, and particularly ACOs,” says Clif Gaus, president and CEO of the National Association of ACOs (NAACOS). Improvements are likely to include “less minute regulation” that will reduce the burden of what he describes as the “fairly significant overhead” caused by complying with current rules.
Lessening regulatory burden is a well-articulated aim of Trump’s choice for HHS secretary, Republican U.S. Rep. Tom Price, MD, an orthopedic surgeon who understands the consequences of decisions about policies implemented in healthcare, says Arner. Price will foster “a dramatic shift toward a much more realistic view of the implications of policy as it affects actual patient care.”
The shift, he predicts, will affect regulatory standards and timelines, deadlines to comply, and the prospects of “a set of financial terms that are more conducive to focusing on quality” while “focusing on outcomes and patient engagement without necessarily penalizing physicians or penalizing payers in the process.”
A more limited use of rules could eventually make room for some latitude on IT initiatives and for the IT vendors now loaded down with regulation-driven functionality projects, says Halamka. “When I talk to other CIOs, they welcome a reduction in regulatory burden,” he relates. Between HIPAA compliance, the second and third stages of meaningful-use requirements and the massive upgrade to ICD-10 coding, government mandates co-opted the entire IT agenda. “They consumed 100 percent of our bandwidth, and also 100 percent of vendor bandwidth,” Halamka says.
Vendors will say that the number of projects in their pipeline for regulatory compliance is still substantial, he notes, and that CIOs can expect a lag between clarification of regulations under the new administration and the burden actually being lifted. But eventually, “customers will once again be able to set priorities as opposed to Congress or regulators.”
Federal programs in limbo
The change in administrations comes just as headliners of the value-based policy lineup were set for a larger and more complex role, especially in adding financial risk to the Medicare market place.
For the few advanced healthcare systems, the demanding performance requirements of the Pioneer ACO Model were winding down, to be replaced by the Next Generation, a model of ACO restructured to be more palatable to providers based on lessons from the first go-around. The Medicare Shared Savings Program, which had dangled upside risk without penalizing providers if they didn’t produce savings to share, was offering several higher tracks of risk and reward for value-based performance and results.
Meanwhile, the Center for Medicare and Medicaid Innovation (CMMI) had just accelerated its regulatory ramp-up of bundled-payment vehicles. A month after the election, it introduced models for one-price episodes of care involving heart attack and coronary bypass treatment, mandatory in nearly 100 randomly selected metropolitan areas, to go with the launch of a bundling program for comprehensive joint replacement in 2015. Two other programs initiated since 2013 are voluntary.
Software and infrastructure planned or already implemented to support those models—from patient and cost tracking to intensive care management and coordination among all the providers touching an episode—could be affected by decisions to change or shut down part of all of the carried-over payment initiatives, experts say.
Price has voiced opposition to mandatory bundled payment programs, suggesting that CMS-run demonstrations be uniformly voluntary, says Cragun. The CMMI itself has come under attack, with calls to curb its power to mandate programs—and even reduce or eliminate its funding. However, some Republicans in Congress have been supportive of the shared-savings programs and of payment bundling as a concept, he adds.
“We feel pretty confident that there will continue to be some sort of demonstrations run by CMS,” Cragun asserts. “Whether they’re through CMMI, continue in their current form or as new programs started by a new administration is the open question.”
Observers at NAACOS are hearing from congressional contacts that ACOs are not part of any repeal, says Gaus. Their value holds up as a market-based alternative to fee-for-service at one extreme and capitation at the other, and with 200,000 physicians participating, Price will recognize that and support an advanced payment model for physicians with the goal of population health management, he says.
“Overall, I think the value-based payment long-term strategy will continue under the new administration, certainly with some tweaking,” Gaus concludes. “I don’t see the likelihood of a wholesale undoing of the strategy.”
The message to CIOs, says Halamka, is that, “We should not slow down our efforts to build infrastructure, to record quality, to manage costs with decision support, and to think of novel ways to improve our best practices in quality, safety and efficiency. Even if pieces and parts of the ACA disappear, like health insurance exchanges, I just don’t believe that there is going to be a wholesale revocation of ACA, nor do I believe there’s really going to be a rollback on the Quality Payment Program or some of these other things that are all slated to take effect in 2018.”
MACRA’s steadying impact
In fact, the passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which sought to push physician payment into the value-based era via inclusion of the Quality Payment Program (QPP), may be a better signal than the commotion over ACA repeal as to the direction that value-oriented approaches and IT supporting infrastructure will be taking.
“It’s safe to say that it was developed by a bipartisan process over the course of two-plus years, so the concept of MACRA as a bipartisan law will [serve to] continue the program,” says Tom Leary, vice president of government relations at the Healthcare Information and Management Systems Society.
Both the Advanced Alternative Payment Model (APM) and the Merit-based Incentive Payment System (MIPS), the two options under which physician payment will be delivered by Medicare, rely on institutions and clinical organization devised to execute value-based care services via ACA programs and rules.
“MACRA is certainly a next-generation method for tying quality to the level and value of reimbursement, with significant complexity as to how providers make the transition,” says Arner. Health systems may see some modification in the next few years to settle on the appropriate amount and types of measured quality that drives overall reimbursement, but the ACA-prompted practices and technology are good to go for the demands of the QPP, he says.
As a payment system and not just a set of program directives, the QPP is subject to yearly rulemaking, and that opens up the opportunity for the new administration to make alterations. “Can they mess with the percentages, the formulas for MIPS, for example?” Leary says. “That is something they can take a look at, but I personally don’t see that as a major shift.” He notes a lot of work went into intermingling the four areas of performance--quality measurement, resource use, improvement activities and advancing care information--including blending previous programs that had operated independently: Medicare EHR Incentive Program (meaningful use}, and Physician Quality Reporting System.
If anything, the practice-improvement category may attract some scrutiny, Leary suggests, given Price’s concern for “getting government bureaucrats out of the practice of medicine and reducing the burden on providers.” But expect the programs to be stable in 2017, he forecasts, and “because Congress has such interest in moving value-based purchasing forward, changes for 2018 and beyond I would anticipate being incremental.”
For big employers and healthcare payers on the commercial side of healthcare delivery, MACRA “is a very valuable program the way it’s defined, and it could turn out to be helpful in this larger movement towards paying for value,” says Lansky. “Implicit in MACRA is that the quality measures to be used to adjust payment are in effect going to penetrate the entire American health system.” As such, it supplies the set of post-ACA signals “as to what we’re measuring, what we’re paying for, and what’s important.”
Big picture won’t change
For CIOs trying to support clinicians—identifying particular quality measures, for example, and getting required data entered at the appropriate place in workflow—they’ve done a lot of work to build an infrastructure to support value-based care. At the very least, changes in how the new administration approaches value-based initiatives represent either lost work or rework.
The main premises of IT strategy won’t be any different, though, says Cragun. “Investments of time and resources in some of the specific details around some of these payment reforms might be lost, but the broader infrastructure, the broader strategy hopefully is oriented toward something that positions the organization to capture the benefits of being more efficient, of higher-quality care.”
“Regardless of how the details of policy change, if an organization has developed the infrastructure that accomplished those aims, then there will be return on those investments in the new world, whatever reforms come out,” Cragun says. “Really focus on reducing cost, on standardizing clinical care, and on improving consumer experience and consumer access. We feel strongly that however payment reform and healthcare reform evolve under the Trump administration, those priorities will be rewarded.”
“It has been an expensive period of investment in infrastructure, and particularly analytics, but it is well worth it,” Gaus says about the development of ACOs. “And I think it positions us well as an industry overall to lead into what is the next generation of healthcare.”
The federal government maintains its central role in pushing the healthcare industry into that next generation, Lansky says. “Whereas CMS can speak with one loud voice what it wants when it does a bundled payment for knee replacement or cancer care, or even primary care . . . the employers are not organized and unified in that way, it’s not their business.” The sentiment about value-based payment may be the same, but the ability to act on the market is much weaker, he explains.
In light of the focus on value that Congress has been pursuing, it has to help healthcare organizations refine their IT systems to give providers ever more understanding of what clinical and business intelligence means and therefore improve quality of care, Leary asserts. “The IT infrastructure is in place, and [government leaders] are going to expect greater advancements in usability and interoperability, so that the average provider can be successful.”
For all the partisan fighting over healthcare’s policy future, health IT issues have to stay out of it, Leary says. “What we’ve been saying for almost a decade now is IT remains a nonpartisan issue, a foundational tool for whatever the end game is, however you define healthcare transformation--greater access, improvement in quality that’s supported by the reporting of quality metrics, which is supported by interoperable systems.”
CIOs have been hard at work on that foundation during the political battle for the federal government’s role, but “whether it’s a mirror image of the ACA or something completely different, it’s still going to need the health IT investments that have been made and the upgrades that will be necessary. The change in administrations isn’t going to change that path.”
Like prospective payment for hospitals, relative-value payment formulas for physicians and other past Medicare reimbursement schemes, the ACA’s experimentation with accountable care organizations, shared savings and inclusive payment for bundles of services compelled healthcare providers and payers to take on a new vision for care delivery. Ultimately it called for significantly different, substantial investments in information technology to support new approaches.
The prospect of repealing and replacing the ACA, now being actively pursued by the Republican congressional majority, throws a blanket of doubt over the course of value-based care initiatives. Without the federal resolve to keep pushing for sustainable value-based solutions, private-sector sources championing the transition might not have enough influence on their own, some industry watchers say.
“Large employers have very much appreciated the leadership of the federal initiatives around value purchasing, and the programs [such as] the ACOs and bundled payment and so on,” says David Lansky, president and CEO of the Pacific Business Group on Health.
But “the jury is out,” Lansky says, on whether the new administration’s interest in a consumer-oriented, less regulated model will undermine the drive toward value-based purchasing, given “certainly signals…that they are not committed to some of the elements that were part of the federal value initiative.” A more dramatic shift to account-based plans, consumerism, less bundling and more open products in the insurance marketplace “will reduce the drive toward value-based contracting, and it could take us backwards in terms of the commitment on the part of providers and payers.”
But the importance of curbing the government’s rising healthcare costs, which underpins the ACA’s value initiatives, is the same or even more important for Republicans now in charge, a variety of healthcare watchers say.
“There is, I think, a uniform belief that with 17 percent of our gross domestic product being spent on healthcare, we are not a competitive society and therefore we must move to value-based purchasing and, therefore, the IT supports for that,” says John Halamka, CIO of Beth Israel Deaconess Medical Center, Boston.
The ACA has led healthcare organizations to invest in software and infrastructure to support care management, telemedicine, care in the home and other components of value-based approaches, and “all those things should be equally important to Trump as they were to Obama,” Halamka asserts.
With Republicans focused on cost savings in the federal budget, any evolution of value-based purchasing will emphasize generating those savings, says Eric Cragun, senior director for health policy at the Advisory Board, Washington. “Some form of value-based payment will continue moving forward.”Regulatory reassessment
The task of building a viable structure around a purely conceptual model for doing healthcare business a whole different way introduced many requirements to comply with regulations, but those were necessary at the start, says Kevin Arner, chief strategy officer of Global Healthcare Alliance, Fort Worth.
The compliance mindset provided leverage to drive value-based payment models and is useful to the next generation of healthcare, whatever it becomes in the next few years, says Arner. “The greatest benefit of some of those regulatory changes was to set a pace of change for the market, and so we had deadlines that the industry could move toward, we had alignment with certain standards and methods. Going forward, I don’t think the industry will change from that.”
What will change, observers predict, is the amount and detail of regulation in value-based initiatives. “I honestly believe that the transition to the Republican market-based philosophy and a lighter regulatory perspective will lead to greater growth in value-based payment, and particularly ACOs,” says Clif Gaus, president and CEO of the National Association of ACOs (NAACOS). Improvements are likely to include “less minute regulation” that will reduce the burden of what he describes as the “fairly significant overhead” caused by complying with current rules.
Lessening regulatory burden is a well-articulated aim of Trump’s choice for HHS secretary, Republican U.S. Rep. Tom Price, MD, an orthopedic surgeon who understands the consequences of decisions about policies implemented in healthcare, says Arner. Price will foster “a dramatic shift toward a much more realistic view of the implications of policy as it affects actual patient care.”
The shift, he predicts, will affect regulatory standards and timelines, deadlines to comply, and the prospects of “a set of financial terms that are more conducive to focusing on quality” while “focusing on outcomes and patient engagement without necessarily penalizing physicians or penalizing payers in the process.”
A more limited use of rules could eventually make room for some latitude on IT initiatives and for the IT vendors now loaded down with regulation-driven functionality projects, says Halamka. “When I talk to other CIOs, they welcome a reduction in regulatory burden,” he relates. Between HIPAA compliance, the second and third stages of meaningful-use requirements and the massive upgrade to ICD-10 coding, government mandates co-opted the entire IT agenda. “They consumed 100 percent of our bandwidth, and also 100 percent of vendor bandwidth,” Halamka says.
Vendors will say that the number of projects in their pipeline for regulatory compliance is still substantial, he notes, and that CIOs can expect a lag between clarification of regulations under the new administration and the burden actually being lifted. But eventually, “customers will once again be able to set priorities as opposed to Congress or regulators.”
Federal programs in limbo
The change in administrations comes just as headliners of the value-based policy lineup were set for a larger and more complex role, especially in adding financial risk to the Medicare market place.
For the few advanced healthcare systems, the demanding performance requirements of the Pioneer ACO Model were winding down, to be replaced by the Next Generation, a model of ACO restructured to be more palatable to providers based on lessons from the first go-around. The Medicare Shared Savings Program, which had dangled upside risk without penalizing providers if they didn’t produce savings to share, was offering several higher tracks of risk and reward for value-based performance and results.
Meanwhile, the Center for Medicare and Medicaid Innovation (CMMI) had just accelerated its regulatory ramp-up of bundled-payment vehicles. A month after the election, it introduced models for one-price episodes of care involving heart attack and coronary bypass treatment, mandatory in nearly 100 randomly selected metropolitan areas, to go with the launch of a bundling program for comprehensive joint replacement in 2015. Two other programs initiated since 2013 are voluntary.
Software and infrastructure planned or already implemented to support those models—from patient and cost tracking to intensive care management and coordination among all the providers touching an episode—could be affected by decisions to change or shut down part of all of the carried-over payment initiatives, experts say.
Price has voiced opposition to mandatory bundled payment programs, suggesting that CMS-run demonstrations be uniformly voluntary, says Cragun. The CMMI itself has come under attack, with calls to curb its power to mandate programs—and even reduce or eliminate its funding. However, some Republicans in Congress have been supportive of the shared-savings programs and of payment bundling as a concept, he adds.
“We feel pretty confident that there will continue to be some sort of demonstrations run by CMS,” Cragun asserts. “Whether they’re through CMMI, continue in their current form or as new programs started by a new administration is the open question.”
Observers at NAACOS are hearing from congressional contacts that ACOs are not part of any repeal, says Gaus. Their value holds up as a market-based alternative to fee-for-service at one extreme and capitation at the other, and with 200,000 physicians participating, Price will recognize that and support an advanced payment model for physicians with the goal of population health management, he says.
“Overall, I think the value-based payment long-term strategy will continue under the new administration, certainly with some tweaking,” Gaus concludes. “I don’t see the likelihood of a wholesale undoing of the strategy.”
The message to CIOs, says Halamka, is that, “We should not slow down our efforts to build infrastructure, to record quality, to manage costs with decision support, and to think of novel ways to improve our best practices in quality, safety and efficiency. Even if pieces and parts of the ACA disappear, like health insurance exchanges, I just don’t believe that there is going to be a wholesale revocation of ACA, nor do I believe there’s really going to be a rollback on the Quality Payment Program or some of these other things that are all slated to take effect in 2018.”
MACRA’s steadying impact
In fact, the passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which sought to push physician payment into the value-based era via inclusion of the Quality Payment Program (QPP), may be a better signal than the commotion over ACA repeal as to the direction that value-oriented approaches and IT supporting infrastructure will be taking.
“It’s safe to say that it was developed by a bipartisan process over the course of two-plus years, so the concept of MACRA as a bipartisan law will [serve to] continue the program,” says Tom Leary, vice president of government relations at the Healthcare Information and Management Systems Society.
Both the Advanced Alternative Payment Model (APM) and the Merit-based Incentive Payment System (MIPS), the two options under which physician payment will be delivered by Medicare, rely on institutions and clinical organization devised to execute value-based care services via ACA programs and rules.
“MACRA is certainly a next-generation method for tying quality to the level and value of reimbursement, with significant complexity as to how providers make the transition,” says Arner. Health systems may see some modification in the next few years to settle on the appropriate amount and types of measured quality that drives overall reimbursement, but the ACA-prompted practices and technology are good to go for the demands of the QPP, he says.
As a payment system and not just a set of program directives, the QPP is subject to yearly rulemaking, and that opens up the opportunity for the new administration to make alterations. “Can they mess with the percentages, the formulas for MIPS, for example?” Leary says. “That is something they can take a look at, but I personally don’t see that as a major shift.” He notes a lot of work went into intermingling the four areas of performance--quality measurement, resource use, improvement activities and advancing care information--including blending previous programs that had operated independently: Medicare EHR Incentive Program (meaningful use}, and Physician Quality Reporting System.
If anything, the practice-improvement category may attract some scrutiny, Leary suggests, given Price’s concern for “getting government bureaucrats out of the practice of medicine and reducing the burden on providers.” But expect the programs to be stable in 2017, he forecasts, and “because Congress has such interest in moving value-based purchasing forward, changes for 2018 and beyond I would anticipate being incremental.”
For big employers and healthcare payers on the commercial side of healthcare delivery, MACRA “is a very valuable program the way it’s defined, and it could turn out to be helpful in this larger movement towards paying for value,” says Lansky. “Implicit in MACRA is that the quality measures to be used to adjust payment are in effect going to penetrate the entire American health system.” As such, it supplies the set of post-ACA signals “as to what we’re measuring, what we’re paying for, and what’s important.”
Big picture won’t change
For CIOs trying to support clinicians—identifying particular quality measures, for example, and getting required data entered at the appropriate place in workflow—they’ve done a lot of work to build an infrastructure to support value-based care. At the very least, changes in how the new administration approaches value-based initiatives represent either lost work or rework.
The main premises of IT strategy won’t be any different, though, says Cragun. “Investments of time and resources in some of the specific details around some of these payment reforms might be lost, but the broader infrastructure, the broader strategy hopefully is oriented toward something that positions the organization to capture the benefits of being more efficient, of higher-quality care.”
“Regardless of how the details of policy change, if an organization has developed the infrastructure that accomplished those aims, then there will be return on those investments in the new world, whatever reforms come out,” Cragun says. “Really focus on reducing cost, on standardizing clinical care, and on improving consumer experience and consumer access. We feel strongly that however payment reform and healthcare reform evolve under the Trump administration, those priorities will be rewarded.”
“It has been an expensive period of investment in infrastructure, and particularly analytics, but it is well worth it,” Gaus says about the development of ACOs. “And I think it positions us well as an industry overall to lead into what is the next generation of healthcare.”
The federal government maintains its central role in pushing the healthcare industry into that next generation, Lansky says. “Whereas CMS can speak with one loud voice what it wants when it does a bundled payment for knee replacement or cancer care, or even primary care . . . the employers are not organized and unified in that way, it’s not their business.” The sentiment about value-based payment may be the same, but the ability to act on the market is much weaker, he explains.
In light of the focus on value that Congress has been pursuing, it has to help healthcare organizations refine their IT systems to give providers ever more understanding of what clinical and business intelligence means and therefore improve quality of care, Leary asserts. “The IT infrastructure is in place, and [government leaders] are going to expect greater advancements in usability and interoperability, so that the average provider can be successful.”
For all the partisan fighting over healthcare’s policy future, health IT issues have to stay out of it, Leary says. “What we’ve been saying for almost a decade now is IT remains a nonpartisan issue, a foundational tool for whatever the end game is, however you define healthcare transformation--greater access, improvement in quality that’s supported by the reporting of quality metrics, which is supported by interoperable systems.”
CIOs have been hard at work on that foundation during the political battle for the federal government’s role, but “whether it’s a mirror image of the ACA or something completely different, it’s still going to need the health IT investments that have been made and the upgrades that will be necessary. The change in administrations isn’t going to change that path.”
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