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Keep Quality in the American Healthcare System Front and Center

Keep Quality In The American Healthcare System Front And Center

Notwithstanding the failure of the recent American Health Care Act (AHCA) in the House, with Republicans in firm control of Congress and the White House, we are sure to see many proposals on the future of healthcare over the next two years. Not only will repeal and replacement of the Affordable Care Act (ACA or Obamacare) be on the agenda again at some point but a radical transformation of the Medicaid and Medicare programs could be in the mix as well.

Whether the programs remain entitlements or not will certainly dominate discussions on the programs’ futures. All three programs grant a legal right to each individual who qualifies (e.g., via age, work history, income, disability, coverage category, or illness/disease state) to enroll for as long as they meet criteria, sometimes for life. With that comes access to far-reaching benefits and subsidies largely at the cost of government.

Debating the entitlement nature of the programs is not a bad thing. As economic forecasts show, America’s ability to afford far-reaching entitlements in the future is in doubt. Working now to overhaul these programs that more than 130 million Americans rely on would preserve them for future generations. And the debate is not only a healthcare one, but an economic imperative, too. As more and more of our gross domestic product (GDP) is consumed by our health system, less is available for investment to sustain and promote economic growth.

But in our minds, there is a much more important focus for lawmakers and policymakers as the healthcare debate heats up: preserving the vital steps we have taken in transforming our healthcare system from one reliant on fragmentation and transaction payments to one based on quality outcomes, prevention and care coordination. Indeed, done right, over time healthcare transformation promises to save far more money than even entitlement reform.

The United States spends more on healthcare than any other developed country. America is fast approaching 20 percent of GDP while others spend between 10 and 12 percent. Yet, consider the following:

  • America ranks at the bottom on most health indices: appropriate access to care, quality outcomes, and efficiency.
  • Those with means certainly can get the very best care in the world, but the American delivery system overall is dysfunctional in many respects, in part because many Americans do not have consistent access to affordable health insurance.
  • The system has been fundamentally unhinged for some time, with a utilization-based payment system and few incentives to emphasize care coordination and management.
  • Our rates of primary care visits, health education and prevention are abysmal. The lack of focus on prevention, care coordination and management means that many Americans tend to access the system too late and at high-cost settings, often whether or not they have affordable access to health insurance.
  • Hospital costs are an outlier because many stays result from preventable admissions for common chronic conditions. Our readmission rates are high due to a lack of focus on care transitions post hospitalization.
  • Waste, fraud and abuse are rampant.
  • The reimbursement system has doctors and other providers more focused on getting paid for a given procedure than on the patient’s outcomes and coordinating follow-up care or managing chronic conditions.

The country has made some meaningful progress in moving from our fragmented, transaction-based system to one centered on quality reimbursement.

  • The Centers for Medicare and Medicaid Services (CMS) has developed a robust Star quality rating system for the Medicare Advantage program, where high-performing plans receive added revenue to pass on to members for additional benefits and lower cost-sharing. About one-third of all seniors and disabled served by Medicare are in these private plans. Quality scores (based on clinical indicators, member satisfaction and other process outcomes) have leapt dramatically and beneficiaries are flocking to plans with the highest ratings. Almost 70 percent of enrollees are now in plans with 4 Stars or greater on a 5-Star scale. This should pay long-term dividends both on the quality and cost front.
  • CMS has put a great deal of effort into reducing dual eligibles’ expenditures and improving outcomes for this group that qualifies for both Medicare and Medicaid. Traditionally, these funding streams have not been coordinated in any way. Dual eligibles number between 15 and 20 percent of each program but account for almost 40 percent of combined expenditures. As such, CMS has emphasized quality and care management in dual-eligible dominant Medicare Advantage Special Needs Plans (SNPs) and introduced Medicare-Medicaid Plan (MMP) experiments (where one plan manages acute and sometimes long-term care across the programs).
  • CMS is also worried about the chronic co-morbidities in other Medicare populations. Those with two or more co-morbidities are about 70 percent of the overall population (including the duals noted above) but account for over 90 percent of all Medicare spending. Value-Based Insurance Designs (VBIDs) have been introduced in Medicare Advantage to better coordinate care and emphasize prevention and care management.
  • In addition, through the ACA, various quality-focused and alternative payment model initiatives have begun in the traditional Medicare and Medicaid fee-for-service environments. While new, these hospital- and provider-based programs are showing some savings and quality outcomes.
  • CMS has begun overhauling Medicaid through its far-reaching transformational regulation that was just finalized last year. The coming regime looks and feels like what has been done in Medicare Advantage as long as it is not watered down or scaled back under the new administration. CMS, too, had begun to slowly roll out a similar quality regime in the Obamacare Exchanges.

Whatever the merits of changing the face of Medicaid, Medicare and Obamacare, lawmakers and policymakers should not lose sight of the importance of continuing the quality transformation. The progress we have made could get lost with a remake of all three programs.

A reasonable regulatory scheme that puts quality, prevention and care coordination front and center should be adopted in any reform effort. This goes for any Medicaid per capita cap or block grant proposal that is likely to pass. If repeal and replace of Obamacare does happen, it should also apply to a devolution of the ACA to individual states or a Health Savings Account program supported by refundable tax credits. If a premium-support model is adopted for Medicare (likely a long shot), private plans should be working under a similar Star program as they do now in Medicare Advantage.

Admittedly, this represents a regulatory burden on the insurers and the system but without it, we remain mired in old ways of thinking. Resulting cost controls from entitlement and other reforms will be fleeting. Adopting a quality-focused system of care centered on prevention and management is the only way to truly change the healthcare paradigm, lower costs permanently and maintain affordability and efficiency.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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