The Biden administration’s CMS Innovation Center 5-year vision conspicuously lacks mention of what I consider to be necessary course corrections to reverse a disappointing first decade.
Leaders of CMS, including Administrator Chiquita Brooks-LaSure and three Deputy Administrators in charge of the Innovation Center (Elizabeth Fowler), Medicare (Meena Seshamani) and Medicaid (Daniel Tsai) have completed a five year visioning process for the Center for Medicare and Medicaid Innovation (known as “CMMI” or the “Innovation Center”), and recently published a summary of the results in Health Affairs. As with most documents prepared by government agencies, the article uses upbeat and vague language, presumably intended to avoid generating controversy. They explicitly said they considered the recommendations provided by Don Berwick (former CMS Administrator) and Rick Gilfillan (founding director of CMMI), which I have described in a previous blog post.
Acknowledging Disappointing History
The article started by noting that of the more than 50 alternative payment models launched by the Innovation Center, only 6 have achieved “statistically significant” savings and only 4 have met the criteria for expansion of the duration and scope of the model.
Elements Included in Five Year Vision
The following is my attempt at summarizing the five year vision in more direct language.
|Health Equity||Want to make health equity “the centerpiece of every model”, including (a) increasing focus on Medicaid rather than Medicare and (b) lowering standards for provider organization participants so the Innovation Center does not continue to work with the same set of sophisticated organizations.|
|Out of Pocket Cost||Rather than just focusing on reducing government cost (as mandated by the CMMI enabling legislation), the Innovation Center will also try to reduce out-of-pocket cost such as by waiving cost-sharing for “high value services.”|
|Behavioral Health||More models that promote focus on behavioral health services.|
|Drug Prices||Note that the Innovation Center vision is focused on drug prices, NOT the utilization, appropriateness or cost-effectiveness of drug therapies. This is telling and unfortunate.|
|Mandatory Models||More models that force participation on providers, rather than making participation voluntary, in an attempt to reduce selective opt-out by providers that prefer not to change.|
|Transformation||Increase focus on “overall lasting transformation” rather than just achieving model-specific cost and quality improvements, such as by launching fewer models and focusing more on the transition of successful models to core Medicare/Medicaid. This is an important element of the Innovation Center vision, and is a direct response to the recommendations by Drs. Berwick and Gilfillan. However, the vision statement lacked any specifics, making me wonder whether they really understood Berwick/Gilfillan’s perspective.|
|Data and Methods||The vision included unspecified improvements to the risk adjustment methodology, increased use of measures of patient-reported functional status and “standardized social needs data” into models, and a promise to provide greater transparency by sharing the underlying data used to evaluate models.|
|Multi-Payer Alignment||The vision promises that the Innovation Center will work more closely with the policy teams within CMS overseeing Medicare and Medicaid (reducing the turf-wars that have taken place during the first decade) and will attempt to align both government and commercial payers on “clinical tools,” “outcome measures,” “payment,” and “policy approaches”).|
What they left out
|Missing Elements||Description and Rationale|
|Specialists||Substantial health care cost and health outcomes are driven by the care provided by specialists during episodes of severe illness. The Innovation Center has recognized this by dabbling in episode-based payment for some surgical procedures and oncology. Although transforming primary care models remains important, the Innovation Center vision should take specialty care far more seriously in the future and expand programs beyond discrete episodes to include longer-term specialist-led care processes, such as the medical management of autoimmune conditions by rheumatologists, gastroenterologists and neurologists, among others.|
|Part D||The pharmaceutical industry lobbying effort has been truly impressive in keeping both the legislative and executive branches from meddling with their ability to sell their products for whatever price they want, for use in any clinical scenario. In particular, CMS has been prevented from negotiating drug prices and establishing value-driven formularies, as is done in virtually all other advanced economies, leading to obnoxiously inflated prices being paid by US taxpayers. The Innovation Center vision mentions drug prices, but they need to explicitly include ambulatory pharmacy “Part D” benefits, which have so far remained out of scope for Innovation Center models.|
|Critical Mass||As I have described in a previous post, providers will not pursue transformative changes to clinical practice and care delivery processes and they will not make transformation-enabling investments in clinical information technology, research and development and operational staffing if the incentives they face fail to justify the disruptive changes and the costly investments. Incentives must achieve critical mass to drive change. Even if CMS progressed all of Medicare and Medicaid to total cost of care capitation (as boldly proposed by Drs. Berwick and Gilfillan), that might still not achieve critical mass to motivate real transformation of the health care delivery system. My estimate is that the threshold all-payer level of capitation (or capitation-equivalent level of risk) is likely to be 75-80% to achieve “mind-share” of individual clinicians, economies of scale for clinic-level health care delivery processes and IT infrastructure and R&D investments, and actuarial stability for the relevant metrics.|
|Conflicts of Interest||The mainstay programs of the Innovation Center, such as MSSP, Pioneer and NextGen, have focused on the creation of new accountable care organizations (ACOs) to take responsibility and share some economic risk for populations of Medicare beneficiaries. Many of the ACOs (and their cousins, Clinically-Integrated Networks) have been established by health care systems that are dominated by hospitals and procedurally-oriented specialists. In that context, the ACO “deal” proposal comes down to: “if you reduce your own enterprise revenue by 10%, the government will pay you 5% back.” Not surprisingly, the health-system-controlled ACOs were never really that committed to ACO-style transformation, and the savings achieved by CMS ACO models has ranged from negative to economically insignificant (which is different than “statistically significant”). I am convinced that value-based payment models based on populations defined by primary care relationships will never achieve outcomes that could be considered “transformational” while they face such conflicts of interest. The Innovation Center needs to notice this elephant in the room and take responsibility for addressing it honestly and directly.|
|Market Consolidation||As with the structural issue of health system control of ACOs and CINs, the transformation of the US health care system to value-based care faces another structural barrier: the continuing reduction of market competition through consolidation of hospitals and medical groups in most US markets. Health system CFOs continue to see their main priority as gaining market power by becoming an indispensable participant in the regional networks of the major payers and using that market power to negotiate fee-for-service rate increases. Indispensable participant status is still, after all these years, based more on having the shiniest and tallest flagship hospital, the most advanced equipment for robotic surgery, imaging and radiation therapy, and the most famous specialty department chairpersons. As long as this priority dominates, health system leaders will never take care process transformation, population health and value-based contracting seriously. It is the responsibility of the US Treasury (FTC) and the US Department of Justice to address anti-trust and restraint of trade concerns. But HHS, and more specifically the CMS Innovation Center should nevertheless take market consolidation into consideration when thinking about how to actually transform the US health care system to value-based payment and when designing new models to test.|
|Enabling Technology||CMS and its cousin, the ONC, have been pushing health information technology vendors to add capabilities to electronic health records systems necessary for value-based care, and pushing health care organizations to “meaningfully use” those capabilities for more than a decade. I’ve expressed my negative opinion of these efforts before (examples: 03/05/13 and 05/25/13). They crowd out real innovation in IT vendors’ development roadmaps and in health care IT organizations implementation plans. So, I’m actually partly pleased to see that the incoming CMS leadership team are not trying to earn “cool kid” points by saying they will focus on EHRs and interoperability (nor AI, ML, blockchain, etc.). But, if the CMS Innovation Center is to be focusing on how to achieve critical mass and overcome the structural barriers described above, there must be some attention paid to how health care entities are going to be able to finance the technology investments needed, particularly if they are not owned by hospitals, their traditional source of capital. In other words, I’d like to see CMS stay in its health care financing lane, but the financing should include both capital and operating accounts. That being said, I don’t want to end up with a federally-owned health care delivery system, so there is a need for balancing competing objectives here.|
|Cost-Effectiveness Analysis||For years, across both Republican and Democratic administrations, CMS has generally tried to avoid being guilty of “micro-managing” the clinical protocols and care delivery processes of health care organizations. They have incorporated quality of care metrics into payment models, and of course those metrics are based on practice guidelines. In some models, they have proposed government-dictated “tools” that have been subject to push-back by provider organizations and professional societies. I’m definitely not in favor of government-dictated clinical protocols and processes, and have always advocated for clinical protocol innovation by competing private health care organizations (as we were doing at Henry Ford in the 1990s). However, I do think that CMS Innovation Center models should be designed to assume that health care organizations participating in the model should accept the principles of health economics and in particular use cost-effectiveness analysis to evaluate clinical protocol alternatives. The US federal government has been allergic to cost-effectiveness analysis over the last two decades, going as far as to ban the use of quality-adjusted life year metrics by AHRQ (originally in response to urologists outraged that a federal guideline could dare to point out the cost-ineffectiveness of their most profitable procedures). It is time for the US government to move beyond its medieval mentality and join the rest of the advanced countries that accept health economic principles. More work is needed to figure out exactly how this should fit into the CMS Innovation Center vision. I don’t think we want to see “meaningful use of CEA” specifications.|
|Population Simulation||As I described in a previous blog post, if the Innovation Center is to seriously address the issues of critical mass, they will need to employ suitable analytic methods. In particular, they need to use simulation modeling of the proposed models in the larger organization and community context to establish the plausibility that proposed models can succeed. The Innovation Center should refrain from pursing tests of payment models and care delivery models if the plausibility of achieving critical mass has not been established, and should refrain from drawing conclusions regarding the effectiveness of models unless critical mass has been achieved.|