The U.S. Department of Health and Human Services' announcement yesterday that it plans to more aggressively sync provider payments with the quality of care they provide is a bold and overdue move.
We spend twice as much as any other industrialized country on healthcare. That means Americans should all live to be 125 in relatively good health. Instead, we live fewer years than those in other industrialized countries and the care we receive is often uncoordinated and maddeningly duplicative. Therefore any initiative to reverse this trend or even slow it down should be widely welcome.
Unfortunately, whether the Medicare program can move 30 percent of its fee-for-service payments to a value-based system by next year and 50 percent by 2018 is not entirely up to the agencies that oversee that program.
Government officials took the kumbaya approach to the rollout of its announcement, staging a Monday press conference in the District of Columbia that included a who's who of the healthcare providers, payers and lobbyists. The lobby list, according to the HHS announcement, included the Blue Cross Blue Shield Association, the American Academy of Family Physicians, America's Health Insurance Plans, the American Hospital Association and the American Medical Association. That's on top of the reps from Boeing Corp., Aetna, UnitedHealth, Ascension Health and Montefiore Medical Center, among others.
I can't remark on the body language of the participants, since I wasn't there. But the language of their statements tells quite a story.
American Medical Association (AMA) President Robert Wah, M.D.: "We look forward to hearing more details behind the percentages HHS put forward as well has their plans to reach these percentage targets."
American Hospital Association (AHA) Executive Vice President Rick Pollack: "We look forward to learning more from HHS on how these new goals will be phased in."
Federation of American Hospitals Executive Director Chip Kahn: "As we proceed, it is important that Medicare take the time to test new approaches and ensure that only reforms proven to be efficient and effective are put in place."
In other words, we may be willing to play ball--if you don't pressure us too much and it's not at the expense of too much of our revenue.
If there is any doubt about how these organizations can stall or even eviscerate a government-backed plan to cut costs, look no farther than the sustainable growth rate formula (SGR). It reaches college age this year, but the AMA actually schooled it more than a decade ago. That was the last time the SGR was actually used to calculate fee-for-service Medicare payments to physicians. Instead, Congress merely issues one-year fixes that bump payments up every year instead. There appears no end in sight to the now zombie SGR, or the annual patches intended to paper over its presence.
If you're not a fan of the SGR, how about the fate of recovery audit contractors (RACs), private auditors that review hospital claims? The AHA and its membership have all but brought the RAC program to a standstill due to litigation and a massive avalanche of appeals that have overwhelmed the administrative law courts.
There's also the Pioneer accountable care organization (ACO) program, where a large number of participants have dropped out because they couldn't make their desired numbers. This was not discussed at the press conference Monday afternoon where the Centers for Medicare & Medicaid Services held up such ACOs as a path toward achieving HHS' goals.
And there's a less visible battle taking place in the laboratory sector, where the Food and Drug Administration issued draft regulations last year to govern what are known as laboratory developed tests. In response, the American Clinical Laboratory Association (ACLA) announced it hired attorneys Laurence Tribe and Paul Clement. The announcement all but broadcast that the lobbying group would soon sue the FDA.
I asked an HHS spokesperson about any concerns the agency might have about lobbying or litigation regarding the new initiative. I have not heard back as of yet.
But rest assured, if the providers or payers have any objections to this latest initiative, you will hear about it very soon. -- Ron(@FierceHealth)