JUNE 17, 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

Seema Verma Envisions a US Health System that Shares Data, Is Truly Value-Based
Creating a healthcare system that prioritizes a well-informed consumer and rewards improvements in quality requires overhauling the current system. Through a series of programs and initiatives, CMS, under Administrator Seema Verma's leadership, is trying to fix some of the issues that plague the current US health system and make accessing care challenging for patients. "Our current healthcare system is complex, opaque, and difficult to navigate for patients," Verma told The American Journal of Managed Care® in written responses. "Empowering patients starts with giving them better access to their own personal health data." Data sharing is one area where CMS is making strides. The US healthcare system has done a notoriously poor job of making data in electronic health records (EHRs) usable and easy to share.1-4 Under Verma, CMS launched the Medicare Blue Button 2.0 program and overhauled the CMS EHR Incentive Programs. CMS also recently hired a chief healthcare informatics officer, who will help drive health information technology and data sharing, Verma wrote in a blog post when the role was first announced. These changes are being implemented to create an easier system for patients to navigate, with data that flow seamlessly between patients and providers. In the past, Verma has recounted her own personal experience with the health system when her husband went into cardiac arrest during a layover at an airport. After going through numerous tests, getting a diagnosis, and receiving care, she and her husband had trouble getting the documentation so he could continue receiving care closer to home. Verma noted that patients should be able to access their own health information as easily as they access financial information through mobile banking. Creating a system that allows for this sort of access and the ability to share data will mean not only that patients can be better engaged in their healthcare, but also that providers can deliver more coordinated care without ordering repeat tests, and researchers can access more robust data, which will lead to more personalized healthcare. (American Journal of Managed Care, May 31, 2019}

Differentiating Health Care Costs from Health Care Value
The wrong model, no matter how hard you work it, will never provide the right answer. When it comes to how we pay for health care, the U.S. is using the wrong model. What's worse, these financing inadequacies could threaten the viability of new therapies that will bring hope to patients who formerly had none. The well-being, and sometimes the lives of patients, depend on getting the health care financing model correct. New gene therapies will transform the treatment of devastating diseases. For instance, a gene therapy that will treat spinal muscular atrophy (SMA), Zolgensma, will likely receive FDA approval in May 2019. SMA is a muscle wasting disease. Children with type I SMA will typically die before they turn two; while children with type II or type III SMA can have normal life expectancies, but will be unable to stand, and experience weakness in the muscles of their arms and legs throughout their lives. Zolgensma could revolutionize treatment. Indications are that Zolgensma will dramatically improve patients quality of life and more effectively manage the disease with just one treatment. Revolutions rarely come cheap, and the cost of this new gene therapy will likely resemble the cost of a heart transplant, not traditional medicine. With such an expensive price tag, the value of these therapies must also be high. Trying to determine the value of these therapies is no easy task, which is complicated further by the structural inefficiencies of the current health care system. Organizations, such as the Institute for Clinical and Economic Review (ICER) attempt to answer this question by conducting cost-effectiveness studies. Cost-effectiveness studies are, by definition, a means for rationing care. They employ arbitrary assumptions, such as how much should be spent to enable a person to live one additional quality-adjusted life year. Of course, this requires someone to define what a "quality adjusted life year" is. Ultimately, as the long wait times in the U.K. demonstrate, countries that use cost-effectiveness studies to determine a therapy's value end up rationing care. (Forbes, May 20, 2019)

The Future of Health Care: Embracing Value-Based Health Care
Employers and health insurers are moving quickly away from fee-for-service health care benefits plans and toward value-based network delivery to employees and their families, driven by timely data, cost efficiencies, wellness incentives and better-coordinated care. But don't expect an overnight cultural transformation among employees, according to Jim Patton, area vice president of the Mid-Atlantic region for Arthur Gallagher and Co. Patton was the keynote speaker at the Future of Health Care panel program hosted by the Pittsburgh Business Times in partnership with UPMC Health Plan on May 14 at the Fairmont Pittsburgh. "I wish you could just turn on a switch," Patton said. "If you really want to get great results, it's a three- to five-year education strategy, buy in from leadership, full-court press every day, walking, talking and believing in the message and delivering that message to the employees to where the culture changes. They have to understand the big picture." He said employees have seen dramatic increases in health care costs with traditional health plans and, at the same time, have deemed other benefits such as time off and flexible schedules more important, leading to talent recruitment and turnover challenges for employers. One of the biggest hurdles? Getting employees to change their health care attitudes and behaviors. (Pittsburgh Business Journal, May 16, 2019)

The Importance of Data in Value-Based Care, and How to Maximize It
Value-based care is expected to account for 59 percent of healthcare payments by 2020, up from 34 percent in 2017, according to a recent Accenture analysis. The ongoing shift from fee-for-service to value-based care means hospitals and health systems need to better understand and anticipate the needs of the patients they serve. As they take on more financial risk, reliable data-driven insights surrounding every aspect of care delivery -- quality, cost, utilization, variations in care, patient behaviors and patient outcomes -- are required. But oftentimes providers' primary source of data comes from electronic health records, and EHRs can be an inadequate source for data-driven insights, according to a recent white paper from Geneia, which is the business of providing the technology and services needed for better collaboration and alignment. To get a better handle on value-based care, better data strategies are needed. The problem with EHRs, according to the paper, is that they're designed for fee-for-service, encounter-based medicine. They don't capture enough information to tell the whole story of individual patients or populations. They also don't make it easy to share data with everyone who needs it. (Healthcare Finance, June 12, 2019)

Healthcare Reform: Where's the Push for More Innovation?
A recent NBC/Wall Street Journal poll again demonstrated that health care is the top government priority among voters. So how are our political leaders tackling the question? For Democratic presidential candidates, the debate is mostly about a new "Medicare for All" -- somehow expanding government coverage for every American (alas, with little discussion about how to fund it). Republican leaders have focused primarily on dismantling Obamacare, though President Trump last week called for bi-partisan legislation to reform provider billing practices. Yet such issues are only a fraction of the tangle of healthcare challenges that, as Mr. Trump once noted, "nobody knew could be so complicated." That complexity, besides being mind-numbing, has also blocked more serious strategic thinking in our public debate. Expanding access and reducing costs are important for many voters -- but nobody's talking about a bigger strategic monster: our need to ramp up healthcare innovation. How will we accelerate growth of new knowledge so our overall system can actually perform better long term -- to achieve higher quality and financially sustainable patient care? What are the breakthroughs to turn around today's losing battle: we're spending on healthcare faster than we can afford, even as positive outcomes per dollar keep sinking versus those of other developed nations? (Forbes, May 19, 2019)

GOP Rep Says Taxpayers 'Happy' to Pay for Performance in Improving Infrastructure
Rep. Rob Woodall (R-Ga.) said recently that taxpayers will be willing to pay for performance in infrastructure, citing his home state as an example. "We're a conservative state in the Deep South, and we passed a billion dollars a year transportation tax increase because we want to be the economic singer of the southeastern United States," Woodall told Hill TV's Krystal Ball and Saagar Enjeti on "Rising." "When we had a bridge burn down in Georgia, we came together, Democrats at the local level, Republicans at the state and federal level, produced it in record time, and get this, paid a $3 million performance bonus to the contractor," he continued. "Do you know how many conservatives complained about that performance bonus? Zero. Folks are happy to pay for performance. It's paying for nonperformance that divides this country," he said. (The Hill, May 17, 2019)

How Do Value-Based Programs Work with Other CMS Quality Efforts?

(CMS, accessed 6/13/2019)

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Panel II: Making the Business Case for Value-Based Care: Real-World Provider Case Studies Show Evidence that Focusing on Value is a Better Business Model than Maximizing Volume

Karen Conway
Vice President, Healthcare Value, Global Healthcare Exchange

David B. Muhlestein
Chief Research Officer, Leavitt Partners, LLC

Sanjay Doddamani
Senior Director in Population Health, Geisinger Health System

David Nace
Chief Medical Officer, MarkLogic