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Viewpoints: Transitioning to value-based health care will deliver more effective and efficient treatment

By Michael W. Cropp and Irene S. Snow

President-elect Donald Trump and congressional Republican leaders have pledged to repeal and replace the Affordable Care Act (ACA) when they take control of the federal government in January.

While a total repeal of the ACA is unlikely, many health policy analysts believe the legislation will more likely be shrunk or amended, rather than abolished.

The president-elect has already softened his pre-election position, voicing support for two of the most popular benefits: insurance for those with pre-existing health conditions and allowing parents to cover children under their plan until they reach age 26.

The individual marketplace and Medicaid eligibility expansions created by the ACA are two areas most likely to be prioritized for reform by the new administration. While the future of the ACA, also known as Obamacare, is somewhat uncertain, what is certain is the need for all stakeholders to continue working collaboratively to rein in costs and make our delivery system more efficient and effective as part of the ongoing effort to transform and reshape health care.

More than ever before, health insurance is a critical component of a family’s financial security and our economy, and yet it continues to become less and less affordable.

The U.S. health care system spent $3.2 trillion in 2015, or almost $10,000 for every person, according to the Centers for Medicare and Medicaid Services (CMS). The cost of health care for a typical American family of four covered by an average employer-sponsored health plan in 2016 is $25,826, more than triple the cost in 2001, according to the annual Milliman Medical Index.

The United States spends almost twice as much as other countries on health care in terms of gross domestic product, but consistently performs worse relative to other developed countries in terms of quality.

A major component in the effort to achieve the triple aim of better health, better care and lower costs is the transition from fee-for-service to value-based care.

Implementing provider reimbursement models (known as value-based models) that encourage the efficient use of services, reduce errors, achieve clinical excellence and improve care outcomes have great potential to transform health care.

At the highest level, the movement to value-based care is the recognition of our underperforming health care system – not enough services of proven value are being performed and too many services are done that don’t add value.

The rapid shift to value-based care is being driven in large part by the passage of the bipartisan Medicare Access and Children’s Health Insurance Reauthorization Act of 2015 known as MACRA, which focuses on the development of new Medicare payment and delivery models for physicians and other clinicians.

Because the CMS is the largest health care payer in the United States and at the forefront of the nation’s health care delivery system, this will be the sea change for new alternative care and payment models.

Even with a rollback of the ACA, the push to a more value-based focus won’t stop and MACRA will still charge ahead as employers support high-performing, value-oriented networks to drive efficiency and effectiveness.

MACRA aims to make three important changes to how Medicare pays those who provide care to beneficiaries:

• End the sustainable growth rate formula, originally enacted in 1997, for determining Medicare payments for health care providers’ services.

• Establish a new framework for rewarding health care providers for providing better care, not just more care, along with smarter spending and healthier people.

• Combine existing CMS quality reporting programs into one new system.

MACRA took a major step forward in October when the CMS issued its final rule on the new Medicare reimbursement and delivery model. This complex regulation gives providers two reimbursement tracks for complying – advanced alternative payment models and a merit-based incentive payment system – beginning in 2019.

Here in Western New York, a number of forward-thinking, high-performing physician practices and provider groups have been on the leading edge of moving toward alternative payment models beyond Medicare.

Critical to achieving success in the transition to value-based care is the ability and willingness of providers and payers to share clinical data, insight on practice patterns and other performance metrics, including electronic health records information.

Many doctors do not have a sense of how they are performing relative to their peers or, for that matter, how physicians within their own group are performing. Nor do they realize what the total costs of care are. That’s why data and analytics are so vitally important.

As such, moving to a value-based landscape requires a significant investment in information technology, as all stakeholders in the health care system face an increased need to acquire, aggregate and analyze data. An integrated clinical and financial platform will be required to provide a common view of the patient across various care settings and over periods of time.

While the CMS is moving to reduce the number of quality metrics providers are required to report as part of MACRA, the process won’t be easy and will take time.

A recent survey of providers conducted by the Healthcare Information and Management Systems Society revealed only 3 percent of respondents believe their organization is highly prepared to make the pay-for-value transition.

As a result, significant and necessary investments in technology and infrastructure will be needed to help provider groups prepare for and make the move to value-based reimbursement. Critical to success will be linking payment to meaningful measures and outcomes, involving physicians in the design and implementation of new and alternative models of care, and ensuring quality patient care is the key driver behind all payment innovation.

Through our mutual experience, we have learned that the transition away from traditional volume-based, fee-for-service care must be phased in and linked to other efforts to create a higher degree of trust, integration and collaboration among payers and physicians.

The transition is based in large part on the capacity to incorporate and use data to implement reform successfully, with information on quality, utilization, costs and patient characteristics captured and presented in a manner that is transparent and actionable.

In addition to implementing alternative models of care, we must continue to focus on other efforts to improve health and health care delivery in Western New York. We have made great strides in this area in recent years, currently ranking 62 out of 306 U.S. communities for overall performance in the 2016 Commonwealth Fund Scorecard on Local Health System Performance. This ranking is based on access to care, prevention and treatment, avoidable hospital use and cost, and healthy lives.

The good news is the fact we now rank fourth in the nation for access to care, which in the Commonwealth Fund Scorecard is a measure of the percentage of the population with insurance of some type. This ranking is a testament to efforts to reduce the ranks of the uninsured (aided in part by the ACA), to ensure more people (including at-risk populations) get needed, high-quality care, and recognition that our region is taking steps to advance population health.

A distinguishing feature of our region is a widespread spirit of collaboration, as evidenced by partnerships between health plans and providers, as well as public-private partnerships and community-based coalitions that leverage resources to improve public health.

The long and successful history of collaboration between Independent Health and the region’s physician community resulted in the introduction of the Primary Connection, a pioneering group representing more than 30 primary care practices – including Buffalo Medical Group – and more than 200 internal medicine, family practice and pediatric physicians.

Another prime example of the cooperative spirit among key stakeholders is the continued success of the P2 Collaborative of Western New York, which was established in 2002 by the three regional health plans and local physicians.

Recognizing health is impacted by personal decisions, social and economic factors, and the physical environment, P2 Collaborative takes a broad perspective to improve overall health  by providing facilitation services, data support and leveraging partnerships.

Through support from the New York State Department of Health, P2 Collaborative supports all eight counties with community health assessments, community health improvement plans and hospital community service plans. As a neutral convener, it has also been able to support unprecedented levels of collaboration and resource-sharing.

The not-so-good news resulting from the most recent Commonwealth Fund Scorecard is the fact our region ranks a disappointing 162, a little below the middle of the pack, for living healthy lives.

This ranking reflects the need to continue focusing on lowering rates of preventable illness and encouraging individuals to take greater personal responsibility for their health. It’s estimated up to 75 percent of medical costs in the United States are due to chronic disease, and lifestyle drives a large percentage of these diseases.

The benefits of exercise are well documented. People who maintain an active lifestyle and watch what they eat have a much lower risk of developing diabetes, heart and lung disease, and cancer, all of which increase health care spending by billions of dollars. They also live longer.

The budget for all chronic disease prevention at the U.S. Centers for Disease Control and Prevention is about $1.2 billion, roughly $4 per person per year. However, the amount spent on treating illness is estimated at nearly $8,000 per person per year.

Hopefully, a continued focus on healthy initiatives such as GObike Buffalo and Reddy bikeshare will pay dividends in helping to create a culture of health throughout our region. These efforts create healthy, environmentally sustainable and community friendly transportation options. They also provide residents with an efficient and fun way to exercise.

Year-round recreational activities along the waterfront, Inner and Outer Harbors, on our biking and walking trails, and in our parks and neighborhoods will hopefully lead to future improvements in this ranking.

The monumental task of transforming the health of a community is a collective responsibility, and our two organizations are committed to identifying and implementing sustainable solutions to improve the quality and effectiveness of health care through partnership and collaboration.

If we get this right and better manage the health care cost trend, we can ensure Western New York moves forward as a high-performing, lower-cost health care community, which will positively impact our economy and our ability to attract new business.
While the voting public has sent a strong message to Washington that business as usual is no longer acceptable, the challenge of transforming the health of, and health care in, our community will be a vital part of sustaining our economic revitalization.

There may be changes in legislation that impact our industry in ways we didn’t anticipate, but we view those changes as potential opportunities to accelerate our pace of change as we continue to be two local leaders in this time of transformation.

Michael W. Cropp, M.D., is president and CEO of Independent Health and a board-certified family physician. Irene S. Snow, M.D., is medical director of Buffalo Medical Group and a board-certified internal medicine physician.

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