Current and former top Medicare officials told an American's Health Insurance Plans conference on Wednesday that new directions for healthcare payment reform could include public and private collaborations, such as Accountable Care Organizations.
"We are going to have to make some real changes to healthcare delivery, and not with short-term fixes," said Mark McClellan, MD, director of the Engelberg Center for Healthcare Reform at the Brookings Institution. McClellan is a former administrator at the Centers for Medicare and Medicaid Services and former commissioner of the Food and Drug Administration.
"We're supporting a learning network of Accountable Care Organizations that in many cases involve public-private collaboration," McClellan said, adding that the goal is "improving quality and lowering cost." McClellan, who has written extensively about ACOs, said the programs have shown promise.
ACOs organize voluntary hospital and physician networks, and reward providers with shared savings in return for better care coordination and other avenues to improve quality while lowering cost, according to the Brookings Institution.
For the past four years, he said ACO programs have shown improvements in quality and many lead to lower costs. While there are some technical issues that must be addressed, he said, "It seems like a promising foundation for future work," McClellan said.
"One of my first experiences at CMS, I started hearing about integrated provider groups and independent practioners trying to do things to improve quality—like having nurse practioners in disease management, and pharmacists [following up] on medication adherence. They showed me the numbers and these things were actually working. Unfortunately they were getting killed on Medicare reimbursement fees." At that point, CMS embarked on ACO pilot programs, he said.
Mark E. Miller, executive director of the Medicare Payment Advisory Commission (MedPAC), also discussed the potential for ACOs.
"Both the private sector and Medicare have to realize there has to be fiscal pressure—restraint on expenditures, payment rates, and utilization—as a move toward redesigning the delivery system," Miller said, adding that ACOs are a "very ripe area for Medicare and the private sector to come together."
Both McClellan and Miller were critical of the existing fee-for-service model. "We think there are some real issues with the traditional fee-for-service programs in terms of the incentive structure—there's very little incentive. You get paid the same whether you have good quality or bad. There's not a lot of focus of coordinating care," Miller said.
"The real problem with fee-for-service isn't the price level, it's the whole pricing structure," McClellan said. "The 21st century is the century of personalized medicine. That's sort of what is exactly the opposite of what the fee-for-service is going to support," he added.
Joe Cantlupe is a senior editor with HealthLeaders Media Online.
