APRIL 30, 2019

Welcome to the Pay for Performance Update eNewsletter
Editor: Philip L. Ronning
This issue is sponsored by the National ACO Summit, the National Bundled Payment Summit,
and the National MACRA MIPS/APM Summit

HHS to Deliver Value-Based Transformation in Primary Care
The CMS Primary Cares Initiative to Empower Patients and Providers to Drive Better Value and Results
The U.S. Department of Health and Human Services (HHS) Secretary Alex Azar and Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma are announcing the CMS Primary Cares Initiative, a new set of payment models that will transform primary care to deliver better value for patients throughout the healthcare system. Building on the lessons learned from and experiences of the previous models, the CMS Primary Cares Initiative will reduce administrative burdens and empower primary care providers to spend more time caring for patients while reducing overall health care costs. The models were developed by the Innovation Center under the leadership of Adam Boehler and are part of Secretary Azar's value-based transformation initiative. "For years, policymakers have talked about building an American healthcare system that focuses on primary care, pays for value, and places the patient at the center. These new models represent the biggest step ever taken toward that vision," said HHS Secretary Alex Azar. "Building on the experience of previous models and ideas of past administrations, these models will test out paying for health and outcomes rather than procedures on a much larger scale than ever before. These models can serve as an inflection point for value-based transformation of our healthcare system, and American patients and providers will be the first ones to benefit." Empirical evidence shows that strengthening primary care is associated with higher quality, better outcomes, and lower costs within and across major population subgroups. Despite this evidence, primary care spending accounts for a small portion of total cost of care, and is even lower for patients with complex, chronic conditions. Primary care clinicians serve on the front lines of the healthcare delivery system, furnishing services across a wide range of specialties, from family medicine to behavioral health to gerontology. For many patients, the primary care clinician is the first point of contact with the healthcare delivery system. CMS's experience with innovative models, programs and demonstrations to date have shown that when incentives for primary care clinicians are aligned to reward the provision of high value care, the quality and cost effectiveness of patient care improves. "As we seek to unleash innovation in our health care system, we recognize that the road to value must have as many lanes as possible," said CMS Administrator Seema Verma. "Our Primary Cares Initiative is designed to give clinicians different options that advance our goal to deliver better care at a lower cost while allowing clinicians to focus on what they do best: treating patients." (CMS, April 22, 2019)

Global Oncology Market Observing Growth from Pay-for-Performance Contract

The oncology market is undergoing drastic changes in recent times. With rising cancer rates and numerous advances in medical technology, the field offers tremendous opportunities for practice and research, and the oncology market is flourishing. This can be conceived from the latest business intelligence publications by IndustryARC titled Oncology Market. The companies have started to invest in the capabilities that match the market evolution, and the companies in the United States have doubled their expenditure on cancer drugs. The market analysts from the IndustryARC have valued the global oncology market at $120 billion as of 2018, and the demand is projected to grow superlatively at a compound annual growth rate (CAGR) of 12.6% during the forecast period of 2019 to 2025. The treatment of cancer depends on the type of cancer such as radiation, chemotherapy, anti-androgens, and immunotherapy. Cancer treatments are being continually developed and are becoming more efficient day-by-day.

(Market Watch, April 17, 2019)

Is Pay for Performance as Bad as the Critics Contend?
A recent column, "If Performance Governs Pay, More Workers Take Antidepressants" reminded me why I stayed out of the academic world. Its author took a 43-page article from a research journal (that ended with a five-page listing of previously published books and articles and 16 pages of statistics and graphs) and summarized it in 650 words. The point of the original research was made in the first sentence of the abstract, where the authors claimed they had "the first evidence linking pay-for-performance (P4P) adoption by employers to long-term and serious mental health problems in employees." Everything that followed supported the authors' argument that pay for performance is bad for employees. In fairness, there has been an ongoing argument in academic circles that pay for performance is a bad idea, especially in government. Finally, here was the "proof." The research was based on experience at Danish companies that introduced some version of pay for performance between 1995 and 2006. The statistics show that after pay programs were changed, there was "a 4 to 6 percent increase in the usage of anti-depressant and anti-anxiety medication." The authors acknowledge they had no idea what version of pay for performance was introduced in those companies. The author of the Government Executive column, which was originally published on Futurity, added his own list: "bonuses, commissions, piece rates, profit sharing, individual and team goal achievements, and so on." He missed the more important change linking salary increases to performance, but his listing highlights a key point -- the phrase "pay for performance" encompasses different practices. It would be important to know if the companies, for example, simply added profit sharing or team incentives. (Route Fifty, April 2, 2019)

AstraZeneca Strikes Pay-for-Performance Deal with UPMC Health Plan
AstraZeneca has agreed to a pay-for-performance deal with UPMC Health Plan, according to STAT. Under the deal, UPMC Health plan will pay for AstraZeneca's blood thinner Brilinta based on how well patients respond. If Brilinta, used in patients who have suffered a heart attack, fails to prevent another attack within 12 months, UMPC will pay less for the drug . If Brilinta prevents a heart attack in the 12-month period, the health plan will pay more for the drug. The deal also reduces patient copay to $10 per month, down from about $45 for a one-month supply, bringing the cost closer to generic versions of blood-thinning medications. The agreement marks the first time an outcomes-based contract has been coupled with a mechanism that also lowers out-of-pocket costs for consumers. "There are many patients today who are not taking their [blood thinners] because they say their out-of-pocket costs are too high," Rick Suarez, senior vice president of market access at AstraZeneca, told STAT. "This is a way to move the conversation away from list price, and, in turn, for the government to see there can be cost savings in the overall health care system." (Becker's Hospital Review, January 29, 209)

Industry Voices -- 5 Things the Government Should Do to Clear the Path for Value-Based Rebate Arrangements
In January 2019, the U.S. Department of Health and Human Services (HHS) published a proposed rule that would make sweeping reforms to the safe harbor regulations under the Anti-Kickback Statute (AKS), the federal law that prohibits most payments for referrals of items or services reimbursed by Medicare, Medicaid and other federal healthcare programs. HHS' proposed reforms are expressly targeting Medicare Part D "drug rebate arrangements" between pharmaceutical manufacturers and pharmacy benefit managers (PBMs), whereby pharmaceutical manufacturers provide utilization-based retrospective discounts to PBMs in exchange for formulary placement or position. Regulators and members of Congress have repeatedly expressed concern regarding the potential role of drug rebates in the maintenance of prices for drugs that are perceived to be excessive. They have taken aim specifically at the role of PBMs in pocketing large portions of such discounts that are paid several months after the time of sale rather than sharing larger portions of savings with beneficiaries at the point-of-sale. (Fierce Healthcare, April 24, 2019)

Global Coalition for Value in Healthcare
Global healthcare has seen tremendous advancements in medical knowledge and innovation, yet many informed observers doubt that society is getting the full value of the annual USD 8 trillion spent worldwide on healthcare. Addressing these challenges and fully harnessing the potential of value-based health systems requires multi-stakeholder collaboration between all stakeholders in the health sector. Formed as a partnership between the World Economic Forum and several leading healthcare stakeholders, the Global Coalition for Value in Healthcare is on a mission to support global health systems transformation, ultimately improving outcomes for patients and reducing overall costs for health systems. This Coalition builds on three years of work led by the World Economic Forum as part of our Value in Healthcare project.

(The World Economic Forum, accessed April 24, 2019)

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Medicare Advantage Holds the Key to Reforming the ACO Program

Farzad Mostashari, MD, ScM
Chief Executive Officer and Co-Founder, Aledade, Inc.; Former National Coordinator for Health Information Technology, US Department of Health and Human Services; Former Assistant Commissioner, New York City Department of Health and Mental Hygiene, Washington, DC