Tom Price, President-elect’s Trump pick to be the next U.S. secretary of health and human services, is a fierce and long-time critic of the Affordable Care Act (ACA), including initiatives that restructure how some doctors are paid.
Many are interpreting this opposition to mean that he will slow the shift from traditional fee-for-service health care, where doctors are paid per visit, test, or procedure, to value-based care, where doctors are rewarded for quality care and better outcomes. But I hope it means that he recognizes we need to take bold action to correct our health system’s current trajectory. Incremental shifts, the approach to date, simply won’t address the real challenge confronting the U.S. health care system — that is, a disjointed care delivery system that results in inefficiency, overspending, lack of consumer accountability, and a sub-par experience all across health care.
Instead, we need to adopt policies that result in significant discomfort for the laggards and outsized rewards for the leaders. Only then might we achieve what Price has called “the principle of health care that Americans hold dear: accessibility, affordability, choices, innovation, quality, and responsiveness.”
The ACA was touted as a remedy for our broken health system, but its overarching focus was expansion of coverage. It didn’t do enough to address the system’s root-cause cost and quality issues. Experts understood that to transform health care we needed to first shift the focus from transactional fee-for-service medicine to value-based care.
The ACA did launch several value-based initiatives. These were intended to drive change in the market. However, the way they were structured and the cautious approach to implementation has unintentionally handicapped them. There is too little penalty for staying the course in fee for service and not enough upside to take the risk of disruptive change.
Consider the Medicare Shared Savings Program (MSSP), which was created by the ACA. Under MSSP, eligible Medicare providers and hospitals can come together to form accountable care organizations (ACOs). The program provides bonuses for ACOs that reduce health spending and deliver high-quality care. It offers the possibility of even greater financial rewards for those who assume full financial risk for their Medicare patients, but few providers have been willing to take the leap. Consequently, the majority are ACOs in name only, not truly accountable for their performance and continuing down the same path as before.
In fact, the vast majority (95%) of MSSP ACOs are still operating in a largely fee-for-service payment model, working for bonuses for lowering costs, but assuming no downside risk. Few ACOs have done the hard work of changing how health care is delivered — moving from a physician-centric “doctor-knows-all” model to a patient-centric model that relies on a team and collaboration.
Who can blame them? Most realize that remaking their business model to succeed in a value-based care world is the right thing to do. But the push to transform their businesses occurred at exactly the same time the government was cutting reimbursement rates, putting significant pressure on hospital financials. And the reality is the pivot to value can be costly and is sure to be disruptive. By contrast, the consequence of staying in their fee-for-service world is minimal in the short term. This leaves many toe-dipping into the world of value through pilots like MSSP, while still depending on the fee-for-service model for the majority of their revenue.
The problem with this approach is it encourages players to operate completely different models with fundamentally different economic drivers under the same roof at the same time.Read More On hbr.org