Dr. Ashish Jha, K.T. Li Professor of Health Policy at the Harvard T.H. Chan School of Public Health and director of the Harvard Global Health Institute, last week told Healthcare Dive that he views current alternative payment model (APM) efforts – bundled payments and ACOs, for example – as version 1.0 and hospitals should be expecting big changes in that space over the next few years.
APMs were a big component of the Quality Payment Program that CMS released last October. APMs aim to improve beneficiary outcomes and engage patients through patient-centered policies. Providers that receive 25% of Medicare payments or see 20% of their Medicare patients though an Advanced APM in 2017 will earn a 5% incentive payment in 2019, according to the Quality Payment Program website. A lot of activity and benefits around APMs still have yet to be seen though some changes have already occurred since CMS finalized QPP. For example, last December CMS finalized its cardiac and joint bundle payment programs.
Jha – who along with colleagues published a paper last week which found elderly Medicare patients treated by doctors from non-U.S. medical schools had a lower mortality rate than patients treated by doctors from U.S. medical schools – sat down with Healthcare Dive during AcademyHealth's National Health Policy Conference to discuss APMs and what hospitals should consider when looking toward APM participation in the future. Here are some of the main takeaways from the conversation.
While we are still in version 1.0, APMs are here to stay
Jha stated he thinks policymakers have been convinced finding a way to pay for healthcare over a longer period of time via broader bundles or perspective payments for a population will lead to both lower spending and better quality. "I think the evidence on that is still out; I think we’re also still learning how to do this," Jha said. Though we're still in a learning phase, Jha said, "APMs are here to stay. The idea that somehow this is an experiment that we will decide is not working and go back to the old standard is not happening. Not in the next 10 years and probably not ever. I say that because there’s broad support for alternative payment models from the Democrats and Republicans. This is not a partisan issue. Obviously, they have slightly different takes on how to do this but I think alternative payment models are here to stay."
Community relationships, communication matters more than size
Hospitals have misunderstood what it takes to be successful under APMs, according to Jha. Hospitals have focused on buying practices and becoming large and vertically integrated and while Jha understands why hospitals make that decision, he notes there's little evidence such strategies are useful and thinks providers are making a mistake by focusing on size.
"It’s not about physically owning your physician practices," Jha said. "It’s much more about what kind of relationships you have, how you communicate and the reason I bring that up is because if you look at some successful alternative payment model organizations – organizations that are doing well under these new schemes – a lot of them are small physician practices that aren’t part of a hospital. Or they're independent hospitals that don’t have a large physician base."
Jha said there are many ways to be successful without being big. He highlighted good communication, integration of clinical services and being proactive in identifying the right patients to give extra support to as strategies providers will find most helpful. "You can build very good communication interfaces with doctors in your community without owning them," Jha said, adding, "If you’re going to win the game under alternative payment models, it’s going to be focusing on the bread and butter of how to deliver better care much more than it is large organizational changes."
MIPS is a stepping stone
"I think of APMs as the future," Jha said. "MIPS is fine as an alternative but my guess is most organizations are going to end up in some sort of alternative payment model and I can imagine an organization that doesn’t have a good IT system or doesn’t have good clinical practices may want to start with MIPS but overtime, I think most organizations should know they will end up in some version of an alternative payment model. So whether they start working now or whether they’re going to get there in two years, that’s where everything is heading. I think MIPS is at most a step along the path but it is not a destination."
More experimentation will be needed
During his panel on APMs at the conference, Jha stated pay-for-performance (P4P) measures – one of the primary mechanisms to improve quality before experimenting with other models – have mostly been a bust if the goal was to improve the outcomes of patients who get care in those models. Though he noted he's been a fan of P4P measures for a long time, he stated the evidence at this time does not support that such measures have greatly improved patient outcomes.
The standard, classic pay-for-performance model which is essentially fee-for-service with a 1, 2, 3% bonus based on whether certain quality measures are met or not has been mostly a failure, Jha said. He thinks the industry shouldn’t give up on pay-for-performance and instead pick a smaller number of high-value measures while putting more incentives on the table. However, Jha acknowledges others think P4P should be scrapped altogether.
"If you scrap pay-for-performance altogether, what do you do under APMs? Under APMs, my sense is what you need to have is really robust quality measures," Jha said. These should include measurements that matter to patients and clinicians and incorporate them as a fundamental part of the model used for individuals to get paid out. Patient reported outcomes and other information not easily gotten from claims data could be made central to such efforts.
"I think these models need ongoing experimentation and changes," Jha said during his panel. One area that could be experimented with is the timing of bundles. Jha stated there's nothing magical about 30 or 90 days attributed to readmission dates. However, there is a problem if the time period is wrong. For example, if the time period is too long, then incentives to forgo healthcare services for unrelated things could be created. "I think we need more clinical nuance on the time period," Jha said calling for an analysis to look at the empirical evidence to determine more clinically rational time periods. "There are all sorts of interesting questions that we need to actually test out in the real world as opposed to saying we're moving to bundled payments for half the country," Jha said.
Pay attention to policy; there will be many changes
"I think for hospitals the key is to pay attention to the policy world and understand this is going to change rapidly," Jha told Healthcare Dive adding there will be many changes coming down the pike in the next three to five years. "What we’re seeing now in terms of bundled payments and the way we’re doing ACOs is probably not how it will look in five to 10 years," he said. "We’re trying a bunch of stuff. Some of it is working. A lot of it is not. I can imagine there will be constant tweaks and changes to these programs especially under the new administration."
Jha stated hospital executives should be focused on the fundamentals of having strong relationships with doctors in their community, good information flow and streamlining processes to be lean and effective. "That is going to prepare you for whatever model comes down the pike next," Jha said.