Since the election, there has been no shortage of speculation as to what the incoming administration will keep, scrap, and propose as replacement for the ACA. Here, Oliver Wyman’s Dr. Bruce Hamory and Dan Shellenbarger make the case that as we consider what comes next, it is important to revisit the root-cause issues that led to healthcare reform. And there are lessons to be gained, they say, by studying the value-based reform solutions that are beginning to take root. Bottom line: No matter what happens with the ACA, now is not the time for providers to ease off their transformation efforts.
Whether you are red or blue or none of the above, there is unanimous agreement that our healthcare system is subpar on quality, frustrating to experience, and far too expensive. These are the underlying pressures that fueled the passage of the ACA, and they absolutely still exist today. While the access and insurance provisions of the ACA (coverage mandates, subsidies, rating rules) have direct and profound impact on consumers and, therefore, are hotly contested, they distract from the critical need for our healthcare system to reconfigure care delivery, integrate information flows, and realign payment.
Without question, solutions for access and insurance coverage are essential; however, without fundamental delivery system reform, access provisions will not be sustainable. Reining in health spending, empowering consumers with information and tools to make informed decisions, and driving outcomes and quality must remain THE priority. For this reason, it is essential that the shift to value-based payment models continues.
Value-based pilots not going anywhere
Providers must not interpret a rollback of some ACA insurance provisions as a signal to ease off their preparations for value-based payment. In fact, value-based initiatives appear to be the least likely elements of the ACA to be repealed. Studies over the past two years demonstrated that value-based pilot projects such as Patient Centered Medical Homes and the Medicare Shared Savings Program have reduced costs, and either maintained or improved quality. HR Bill 3762 – the bill passed repeatedly by the US House of Representatives to repeal the ACA, and the likely roadmap for an ACA rollback – does not include any mention of repealing these initiatives.
MACRA will roll on
Further, it would appear that the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the broadest push to value to date, is not going anywhere. The Act, which establishes new provider payment rules, is budget neutral, and rewards quality and reduced costs. It was enacted to repeal and replace the Sustainable Growth Rate Formula (SGR) for the Medicare Physician Fee Schedule – a perennial thorn in the side of Congress since its enactment. Notably, MACRA was passed by the Republican-controlled majorities in both the House and Senate, and a principle element is heightened payments for providers taking on risk-based reimbursement across a majority of funding segments. For these reasons, it appears unlikely that MACRA would warrant opposition from the next Republican-controlled Congress.
In time of tightened budgets, value will be differentiator
In the near term, pressure to control healthcare costs will only increase as healthcare budgets continue to tighten across federal, state, and private employer funding segments. Cost shifting will continue to drive expansion, and use of tax-free Health Savings Accounts will likely increase consumers’ awareness of cost and fuel their expectations for service and experience.
The path to value remains necessary to offset the high-cost/low-quality formula – no matter who is sitting in the White House.
As these factors play forward, delivery systems that distinguish themselves on cost, quality, outcomes, and experience stand to separate themselves from those that operate in the legacy model – regardless of what happens with an ACA rollback.
Providers should stay the course
Bottom line: The path to value remains necessary to offset the high-cost/low-quality formula – no matter who is sitting in the White House. Providers should continue to chart their course to value and rapidly implement the changes needed to improve the quality and safety of the care rendered.
While the tactics will vary by market, the following key principles should be resident in all systems’ plans for the coming year:
- Position the organization to win by delivering care more efficiently in lower cost settings
- Develop and advance the organization’s strategy to implement the provisions of MACRA
- Anticipate that changes to the ACA and MACRA (if any) will be relatively slow and that there will be no changes to the financial penalties for poor performance
- Focus on improving the consumer experience – before, during, and after care – to meet and surpass rising expectations for ease of access, predictability of costs, and levels of service
- Quantify and communicate your organization’s differentiated value – to patients, families and purchasers of care – especially given an increased energy around price transparency