Solutions to the problems of our healthcare system and the Affordable Care Act (ACA) may be difficult to come by, in particular given evidence showing our country’s system has issues with quality, cost, accessibility and other problems.
Yet the recently enacted Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) may provide a roadmap and policy vehicle to help address some of these challenges.
MACRA is a recent bi-partisan legislative action. It implemented the so-called “doc-fix” to eliminate a nearly 20 year old problem with how Medicare set payments to physicians. By fixing the problem, MACRA eliminated substantial uncertainty related to physician departures from serving as participating providers to Medicare beneficiaries.
MACRA went beyond fixing a flawed payment formula, to articulate a vision, structure and timeline to change how providers are paid and how they furnish services. MACRA further instituted the use of “alternative payment models” (APMs) using “value-based” incentives and care delivery strategies intended to improve quality, promote innovation and move to some level of “shared” financial risk among payers and healthcare providers.
MACRA APMs seek to achieve higher quality, more coordinated care at reduced cost. Under an APM, for example, a clinician has incentives to more closely coordinate care with providers, keep patients healthy and ensure that the care that is provided is both high quality and efficient.
Notably, the MACRA legislation moves beyond Medicare to encourage the adoption and use of value-based arrangements. Beginning in 2019, an APM’s participating providers will be allowed to focus entirely on Medicare, or alternatively, they can count patients and payments from Medicare, along with Medicaid, commercial and other payers. By permitting such “all-payer” combination APMs, policy makers have acknowledged that value-based care should be “payer agnostic” and more likely to be successful if deployed to broad patient populations.
MACRA provides a policy framework that, if refined in the areas outlined below, might help address some of our healthcare system’s problems.
First, MACRA created a timeline and glide path to transition from unbridled fee-for-service to value-based systems focusing on quality, cost and shared risk. But the current timelines requiring providers to ensure substantial portions of their patients receive care through an APM and to move to fully “mature” APM arrangements are too aggressive. Experience shows it takes considerable time for provider communities to organize, develop and learn to succeed in new systems, so the glide path for full migration to mature APMs should be lengthened.
Second, MACRA seeks to eliminate waste and create incentives to furnish the most appropriate and effective care by requiring providers to bear financial risk. Yet, the level of provider-borne risk will need to be softened in the near term to promote adoption of APMs. Moreover, the migration to expected “end-stage” risk levels will need to be extended to provide providers with time to experiment, learn and succeed in transforming the delivery system without going broke.
Third, payment for prevention and healthcare when its required remains the crux of the problem. Americans who are uninsured or under-insured still seek and obtain care when it’s needed -- but much of that care is acquired in expensive emergency room settings. Stable financing and access to coverage can allow individual patients to focus on prevention and maintaining health, while also allowing them to address illness earlier in time, in an appropriate setting, and at a more reasonable cost.
The core concepts of insurance involving collective financing and spreading of risk remain essential to any long-term financing strategy. Any solution will necessarily require an appropriate timeframe to permit payment structures, delivery systems, and the expectations of key stakeholders (including patients and their families) to transition to new practices.
Fourth, MACRA currently requires only modest cooperation by the health insurance industry. Policy changes should require insurers to provide needed information on insurer-sponsored alternative payment arrangements to facilitate the transition to value-based care and shared risk. Solutions will also likely require policies that bar discriminatory coverage, introduce competition, market forces and accountability into insurance industry practices to drive down premium prices. Those insurers that seek to participate in (and profit from) our nation’s healthcare system should be required to do their part to provide coverage on a sustained basis in multiple jurisdictions, rather than selecting markets and patients that yield the strongest bottom line.
Finally, it’s fair for our nation to expect something from all of us as consumers of healthcare services. The dislike of the ACAs “individual mandate” is largely due to the lack of affordable, useful coverage and care. Yet increasing the number of people who pay into the system (i.e., spreading financial risk) remains the only sensible way to expand access while making coverage more affordable. The consuming public needs to contribute its fair share, and the nation will also likely need to help defray the costs as the systems transform over a defined timeline. Ensuring access to affordable care for all is a wise investment to our nation’s collective financial future, and strategies that don’t provide wide access to coverage will be more expensive in the long-run.
MACRA provides many of the core elements of a means to fix our current healthcare challenges. With some modest “tweaks” (aka amendments), MACRA provides a policy vehicle to address many of the needs outlined above. Importantly, MACRA may also provide a much needed reminder and boost to policy-maker confidence that bi-partisanship in healthcare is appropriate, possible and the right thing to do.
Bruce Johnson is an attorney with Polsinelli’s Healthcare Practice in Denver, CO
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