The usual short term measures to address rising healthcare costs, such as reducing prices, will not be sufficient to "bend" downward long-term healthcare spending. Instead, President Obama and Congress should use more aggressive reforms that will slow spending growth—while improving quality, a group of 10 national health policy experts is recommending.
The group's effort was convened by the Engelberg Center for Health Care Reform at Brookings, with support from the Robert Wood Johnson Foundation. In their plan, called "Bending the Curve: Effective Steps to Address Long Term Health Care Spending Growth," they call for transitioning to a "system of greater accountability," which will provide greater flexibility for private and public stakeholders "to experiment with programs and measure results—to see what works best."
As a foundation for improving value, all stakeholders in the system need better information and tools to be more effective, they propose. Provider payments then should be "redirected toward rewarding" all improvements in quality and reductions in cost growth.
In addition, they call for health insurance markets to be reformed and government subsidies restructured "to create competition and improve incentives around value improvement rather than risk selection." And they suggest that individual patients be "given greater support for improving their health and lowering overall health care costs."
To get there, they are calling for a series of steps to accomplish those goals:
Building a foundation for cost containment and value based care. Holding spending growth while improving value will require information and tools, such as health information technology (IT) systems, they said. However, providing these tools is not enough—stakeholders will also need better incentives to use them.
- Efforts should be made to ensure that investments in health IT are effective by linking "meaningful use" health IT bonuses to achieve better results; creating interoperability and provider communication; and funding technical support programs to ensure providers adopting health IT have access to comprehensive support for overcoming implementation challenges.
- The best use of comparative effectiveness research (CER) should be sought by creating an entity to allocate CER funding based on the expected value of the evidence to be developed, while protecting providers and insurers from liability when they follow best practices identified by evidence.
- The healthcare workforce should be improved through creating incentives for states to amend the scope of practice laws to allow for greater use of nurse practitioners, pharmacists, physician assistants, and community health workers. Also, graduate medical education payments should be amended to promote the teaching of high value care practices.
Reforming provider payment systems to create accountability for lower cost, high quality care. Reorienting providers' financial incentives and support toward improving value is essential and requires both a short and long term strategy, the experts noted.
- Initially, they call for adjusting the Medicare and Medicaid fee-for-service program, which could include broadening bundled payments (such as hospital and post acute care, hospital and physician services, and high cost episodes of care) and increasing payment rates for primary care—offset by reductions for specialty care.
- New payment systems should be built for provider accountability. Pilot accountable care organizations (ACOs) should be promoted that integrate physician groups, hospitals, and other providers around the ability to receive shared savings bonuses by achieving measured quality targets.
- Pressure should be applied to "non accountable" Medicare payments by, for instance, establishing virtual ACO incentives several years after implementing reforms and by freezing marketbasket updates for two years for providers not participating in accountable payment systems.
Improving health insurance markets. "Governments should ensure proper incentives for non group and small group health insurance markets to focus on competition based on cost and quality rather than selection," they said. Achieving this will require near universal coverage and insurance exchanges, they added. Also, lawmakers should reform Medicare Advantage to improve incentives for lowering costs.
- Non group and small group markets should be restructured around an exchange model that promotes competition on cost reduction and quality improvement.
- Inefficient subsidies for employer-provided health insurance should be reduced, such as through capping existing income tax exclusion for employer provided insurance.
Supporting better individual choices. Individuals need support for "making better choices as patients and consumers," they said, that would enable them to get better care and stay healthier at a lower cost.
- Medicare should be redesigned to "reward high value choices and discourage first dollar coverage."
- Prevention and wellness programs should be promoted that reduce costs, such as by targeting obesity reduction and allowing premium rebates for measurable health and risk factor improvements, provided that all beneficiaries have an opportunity to save money.
- Patient preferences should be supported for palliative care.
The healthcare policy experts who joined together to develop the proposal include: Joseph Antos, PhD, American Enterprise Institute for Public Policy Research; John Bertko, The Brookings Institution; Michael Chernew, PhD, Harvard Medical School; David Cutler, PhD, Harvard University; Dana Goldman, PhD, University of Southern California and RAND Corporation; Mark McClellan, MD, PhD, Engelberg Center for Health Care Reform at the Brookings Institution; Elizabeth McGlynn, PhD, RAND Corporation; Mark Pauly, PhD, University of Pennsylvania; Leonard Schaeffer, University of Southern California; and Stephen Shortell, PhD, University of California, Berkeley.