5 takeaways from the Senate hearing on healthcare costs

The CEOs of New York City-based Montefiore Medicine and Nashville, Tenn.-based Vanderbilt University Medical Center testified July 17 before a Senate committee in the second of a series of hearings on reducing healthcare costs.

In this hearing, the Senate Committee on Health, Education, Labor and Pensions focused on eliminating unnecessary spending and improving quality and value for patients. 

Here are five major takeaways from the hearing:

1. Jeffrey Balser, MD, PhD, president and CEO of VUMC, spoke about reducing the variability and volume of drug and diagnostic test orders and improving the management and coordination for patients who most frequently use healthcare services. He spoke about VUMC's medical home for children with chronic conditions, a model that has reduced inpatient hospital days by 89 percent, early readmissions by 75 percent and emergency department visits by 63 percent in two years. Dr. Balser also highlighted Vanderbilt's Familiar Faces program, which is a similar medical home model for adults.

2. Steven Safyer, MD, president and CEO of Montefiore Medicine, the parent organization of Montefiore Health System, spoke about the safety net's experience in the Pioneer ACO program. Montefiore generated $73 million in savings to Medicare over five years and covered nearly 54,000 lives by the end of the program. Its quality score in the final year of the program was 95.16 percent, and it scored above average for clinician communication. This program helped expand other risk-based programs and allowed the system to create aggregate population health interventions for its Medicare population, he testified. The system is now part of the Next Generation ACO program.

"Over the years, we have learned that to be successful an ACO must promote primary care and efficiently use scarce financial resources," he testified.

3. Dr. Safyer also spoke on the importance of finding a new payment structure for hospitals whose payer mix includes a high proportion of Medicaid, Medicare and low-income patients, particularly with the loss of disproportionate share hospital payments. "We believe that organizations such as Montefiore, who care for a preponderance of Medicaid and Medicare beneficiaries and who are successful in containing costs through value-based programs, should have a different payment structure," he said.

4. David Lansky, PhD, president and CEO of Pacific Business Group on Health, a coalition of public and private employers based in San Francisco, spoke on increasing the deployment of successful value-based care models. "Because private employers and their employees pay for about half of U.S. healthcare, and public programs pay for half, it is imperative that policymakers collaborate with public and private purchasers to deploy value-based purchasing strategies that convey consistent signals to the healthcare industry," his written testimony said.

5. Brent James, MD, a clinical professor in the medicine department at Stanford (Calif.) University School of Medicine, also testified on the primary drivers of waste in healthcare. He defined these as delivering care that relies on personal expertise and memory, the increasing complexity of care and a system that encourages high utilization. His prepared testimony addressed the cycle of waste in healthcare that "vigorously defends itself," as waste in one corner of the industry often feeds another.

The committee did not set a date at the meeting for the next hearing, but will convene July 25 for an executive session.


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