Most of the healthcare industry has been collectively holding its breath as President Donald Trump and his administration settle in to their new roles. The biggest worry has so far not come to pass, as Republicans in Congress failed in their efforts to repeal the Affordable Care Act (ACA).
But changes don’t have to be so dramatic to have a large effect. Policy observers are closely watching how the administration can more subtly undermine the objectives of the ACA through death by a thousand cuts rather than a showdown in the Capitol.
HHS made one of the biggest changes a few weeks ago when it proposed ending three mandatory bundled payment programs — a move numerous health policy experts called shortsighted. Bundled payment models are meant to improve care by encouraging coordination among providers during the various stages of a patient's treatment and to reduce costs by eliminating redundant services and administrative tasks.
Anecdotes are currently more prevalent than statistics, but some early results of bundled payment models are encouraging. Cleveland Clinic said it’s total joint replacement model was successful and prompted plans to expand the program to nine more hospitals. While a few studies have shown no improvement over fee-for-service methods, the numbers behind bundled payments — and the provider experiences — are mostly trending positive.
The overall shift toward value-based care maintains bipartisan support, but the sticking point is whether to make such programs mandatory. Physicians have expressed frustration with the mandatory nature of the CMS models as regulatory burdens can strain budgets at smaller provider groups in particular. But some worry there is more concern at HHS for politics than quality healthcare — and that the changes could set back the broader movement toward value-based care.
The Trump effect
The change to end three bundled payment programs didn't come as a big surprise to those watching healthcare policy coming out of Washington, D.C.
Both HHS Secretary Tom Price and CMS Administrator Seema Verma have stated opposition to mandatory provider participation in bundled payment models. During her confirmation hearing, Verma said bundled payment model expansion should be slow and gradual, and Congress should be involved in the process. Price said during his confirmation hearing he believes HHS should incentivize innovation in the industry, but has generally balked at government intervention and said federal regulations are more of a hindrance than a help for providers.
However, an industry notoriously averse to change may need more than a gentle push before payment reform can become a reality. CMS officials from President Barack Obama’s tenure were mindful of the difficulties providers — particularly at small and rural facilities — face in implementing new payment models, but they also saw CMS as having an important role in guiding commercial healthcare organizations.
Former CMS Administrator Andy Slavitt said recently on Twitter the CMS needs to lead the movement toward value-based care and signal to payers and providers that the industry is heading toward a tipping point. “Value-based care won’t happen automatically,” he pointed out. “Change is too hard. People would rather stay in the current system than learn new things.”
Former CMS Communications Adviser Aisling McDonough, who served during the Obama administration, agrees. “With Medicare being such a large payer, it pushes other payers to promote bundled payments as well,” she told Healthcare Dive. “Together, that kind of aligned progress is what truly makes the change.”
Slavitt said he saw how the bundled payment model was succeeding when doctors told him they stopped using rehabilitation centers with poor outcomes only after being paid in a bundle. Before that, they never had a reason to compare the centers. “Believe me, at CMS, with all that comes at you, when people complain about change, it’s easiest to give in and not do something,” he said.
HHS did not respond to a request for comment on this story.
In an op-ed in the Wall Street Journal, Jason Furman, former chairman of the White House Council of Economic Advisers under Obama and Bob Kocher, who was special assistant to Obama for healthcare and economic policy, wrote that bundled payment models have received bipartisan support. The models boost competition and consumer choice and put “doctors, not Medicare, in charge of how best to provide care,” they wrote. In addition to promoting those historically conservative values, bundled models have already produced promising results.
“The Trump administration is making healthcare complicated again,” they wrote. “This will result in longer bills and potentially shorter lives. Rather than reversing the progress that has been made with bipartisan support, the administration should aggressively pursue advanced payment models. America’s health — both medical and fiscal — depends on it.”
In fact, it's difficult to find anyone in healthcare who doesn’t support the shift toward value-based payments. The ACA replacement bills that failed in Congress still promoted the practice. Democratic and Republican lawmakers both supported MACRA, which has a value-based philosophy at its heart.
But while the concept at least is bipartisan, different groups have different ideas for how to carry out reform. The GOP wants less enforcement from the federal government and more control in the hands of states. The sticking point for bundled payments is whether they are mandatory. Republicans like Price and Verma have pointed to this as their biggest concern with the model by far, saying it can interfere with provider-patient relationships.
Analysts who support mandatory participation in bundled payments point to a few reasons. It allows the CMS to have more control over what mix of providers are trying the model. Along with the assurance there will be enough participants with results, this ensures the data can be used to properly assess the success of the programs.
It's also another way to keep the march toward value-based payments from stalling — and to avoid pushing meaningful reform further down the road.
Many hospitals support bundled payments but are averse to mandatory models because of the disruption they can cause. The industry is currently facing lower patient volumes, reduced reimbursements and increasing labor costs. Provider groups aren't looking to have another challenge on their plate.
Resolving the question of whether bundled payment models should be mandatory will be key to their future. Hospitals can either agree the negatives in mandatory models are outweighed by the positive, if delayed, results — or policy analysts can work to find a way the models can be tested and improved without mandatory participation.
McDonough said she doesn't think the bundled payment cancellations will cause many hospitals to reverse their programs because they’ve already committed resources to those efforts. “I think that they’re too far down the path to turn around, and what they need to figure out now is how they are going to continue,” she said.
Hospitals also have other options for pursuing value-based care, like accountable care organizations, population health programs and direct primary care payment models. Providers need to look to themselves to find the drive to continue on the path of payment reform, she said.
“I don’t think that value-based care is going away,” she said. “I think we’ve gone too far in that track, but it’s going to require new champions.”
The CMS rule proposing to cancel some bundled payment programs will be open for public comment until the middle of October. Major changes are unlikely, but officials could respond and make alterations after hearing industry concerns.
Providers have plenty of other options for pursuing value-based payments, and many of them are also CMS initiatives. The Comprehensive Primary Care Plus (CPC+) initiative is a public-private partnership that gives practices a few tracks to choose from in advancing new payment models. Second round results showed 95% of practices meeting quality of care requirements and four of seven regions producing results that garnered a share of the savings pool.
Accountable Care Organizations are another popular option. The first quarter of 2017 saw an 11% growth in ACOs, according to a recent report by Leavitt Partners. More evidence is needed for this model, but several provider groups have shown improved care quality and stable or reduced care costs.
Value-based care remains the clear path forward for providers — and bundled payment programs will be part of it for many. The changes from CMS may hinder the broader movement and set back bundled models because of less reliable results from the government programs, but they aren't going to put an end to reform efforts.