Improve payment models and cut costs

money
There is no silver bullet that will cut costs and improve care. But allowing the Center for Medicare & Medicaid Innovation to keep working on it is key.

Editor's note: This article is part of a multi-page special report, 8 Ways to Fix the Affordable Care Act

If they really want to repair the Affordable Care Act, lawmakers must focus on the transition to value-based care, which has accelerated under healthcare reform. 

The first step? Support the Center for Medicare & Medicaid Innovation (CMMI) as it tests new payment models that will cut costs. There is no silver bullet that will cut costs and improve care. But allowing CMMI to keep working on it is key.

Payment model innovation

Providers that have seen the benefits of CMMI’s initiatives, including bundled payments, say they’re sticking with it regardless of what the White House or Congress decide. Helen Macfie, chief transformation officer for Los Angeles-based MemorialCare Health System, is taking that route: She says her organization is “bullish” on continuing the model voluntarily.

CMS Innovation Center

Bundled payments get specialists together with providers "to do something really cool,” she says.

RELATED: How providers, payers and pharma can work together to drive the transition to value-based care

Providers have seen mixed success in accountable care organizations (ACOs), the most complex advanced payment model (APM) there is. But their longevity requires commitment to reduced regulations.

On that point, the Donald Trump White House and the healthcare industry agree: Less is sometimes more. A reduced regulatory burden can also make it easier for providers to balance multiple APMs at once, which can improve the effectiveness of each.

Providers that have found success with ACOs may not see the benefits immediately, studies suggest, but the savings instead compound over time. ACO programs may require significant startup costs upfront.

However, the evidence is growing that these advanced value-based care models do pay off in both cost reduction and quality improvement, even if there's still much for researchers to learn about what really makes an ACO model succeed.

Cost-cutting measures

Also lost in the debate over insurance reform is the growing cost of healthcare in the U.S., which far outpaces that of other developed nations despite lagging behind in quality. An element of this that is totally untouched in Republican-led reform is drug pricing, which providers argue is one of the major drivers of increased costs.

Donald Trump
President Donald Trump

As part of the party’s updated platform for 2018, Democrats unveiled plans to allow Medicare to negotiate drug prices. The suggestion has been championed both by former President Barack Obama and by President Donald Trump, whose vacillating views on health policy have been known to buck the party line.

RELATED: Democrats revive calls for Medicare to negotiate drug prices

But not everyone is convinced that this is the best solution. Experts at the Kaiser Family Foundation noted that negotiating drug prices could have a limited impact on savings, and even the Congressional Budget Office has been skeptical.

And if you ask pharmaceutical companies, they’re not the problem when it comes to rising healthcare costs, anyway; hospitals are.

Improve payment models and cut costs

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