How Trumpcare Could Win Big
By E. Todd Bennett
Government involvement in the healthcare industry has increased under HITECH, the Affordable Care Act (ACA), and now MACRA. The phrase, “large-scale change happens when customers demand it, suppliers agree on it, or the government mandates it,” certainly applies to healthcare and has played out in these legislative acts. These federal government initiatives, except MACRA (since the quasi-final rule was only recently published), have failed to improve quality and bend the cost curve in a broad and dramatic way to put the United States healthcare system unequivocally in a worldwide leadership position.
On the cusp of a new administration, it’s important to understand why these legislative acts aren’t dramatically improving healthcare quality and reducing costs.
Overall, incentives seem misdirected with the healthcare industry goals related to cost and quality. In fact, the definitions of the goals seem too fuzzy or missing altogether. For instance, we do not know the specific cost and quality goals to target for a total knee replacement or the defined cost and quality outcomes related to lifestyle-related chronic disease.
Instead of incenting attainment of specific cost and quality outcomes, existing regulation has incented the intermediate activities, behaviors, and organizational structures that some legislators and industry leaders believe will aid in reaching the outcomes. Even when the intermediate actions seem productive, the lack of compelling results leads to a conclusion that the actions are, at best, incomplete. The right combination of processes to achieve the desired cost and quality outcomes is not always clear, and in the absence of evidence-based clarity, practitioners need maximum flexibility to act in accordance with their training and experience.
By shifting to incentives based on optimal quality and cost outcomes, the Trump administration has an opportunity to reduce administrative burden from government agencies, reduce the compliance burden from healthcare organizations and practitioners, and create a competitive and innovative environment that is truly driven to achieve world-leading healthcare quality and cost-of-care goals.
Let me explain with some examples.
While a digitized and connected ecosystem and at least aspects of electronic health records (EHRs) are surely part of the long-term solution to higher quality and lower costs, incenting adoption of EHRs and telling providers what stepwise features constitute Meaningfully Use is an industry-wide micro-management mandate. This movement to automate so many processes may be ineffective, inefficient, or both. The EHR is a tool— a complicated and expensive one – and like other tools available to providers, it has the potential to enhance certain clinical and administrative activities and/or become a source of frustration and waste.
Shifting incentives from Meaningful Use of EHRs to attainment of a desired combination of higher quality outcomes for care and lower cost gives providers the option to select and de-select the technologies that impact cost and outcomes the most. Providers who use EHRs or certain features may have a clear advantage, and if so, competition among providers would spur increased adoption of those features. In this scenario, the government defines the optimal quality/cost outcome at population and/or episode levels along with incentives for attainment and foregoes defining which EHR functionality is most important; the market will decide which technological features should be meaningfully used to help them achieve the goal.
Take the ACA’s formulation of Accountable Care Organizations (ACOs). ACOs use incentives and penalties to drive a more coordinated care delivery environment with the potential to reduce unnecessary care, increase patient safety, and lead to higher quality outcomes. An ACO has the best opportunity to impact quality and cost when patients get their care within the ACO network, but when patients go outside the ACO network of practitioners, care coordination wanes, reducing the opportunity to optimize quality and cost.
Unless incentives to coordinate care extend to every doctor who cares for a given member and not only to doctors who participate in the constrained provider organization, ACOs will continue to have blind spots that prevent their impact to the degree desired. The structure of the ACO and the incentives to coordinate care are not the ultimate goals, and even brilliantly coordinated care in the absence of other behaviors will fail to produce higher quality and lower cost. If healthcare providers are convinced of the benefits of coordinating care, they will facilitate care coordination regardless of whether the patient sees an in- or out-of-network provider and using whatever technology they deem appropriate. Once again, this reduces government involvement in managing care, reduces administrative and technical complexity for providers to what the provider deems appropriate, and creates a competitive and innovative environment where reaching the ultimate goal is rewarded.
Incenting practitioners who treat Medicare patients with a potential bonus valued at less than a tenth of their total reimbursement from Medicare, using quality metrics reported two years prior to the incentive payment, and thinking that it will change practitioner behavior seems aspirational. Incentivizing process metrics and clinical practice improvement activities seems to have merit, but clinicians seem better positioned to define the process metrics and improvement activities themselves and incent their care delivery teams to operationalize them. Meanwhile, the federal government seems best suited to craft a measurement system for an optimal combination of quality and cost outcomes and a timely incentive program to reinforce those behaviors.
Resetting legislation and the associated rules to motivate our nationwide healthcare system to be the world-recognized leader requires understanding of granular outcome goals, prescribing fewer actions around how provider organizations function to give room for innovation, and aligning incentives that facilitate competition and reward successful attainment of the ultimate cost and quality goals.
If Trumpcare — whether a revision of Obamacare or something wholly different — can shift the role of the federal government to defining targets and driving the healthcare industry with incentives to reach them, American ingenuity, resourcefulness, and competitiveness will take over like never before and attainment of quality and cost containment goals will follow.
E. Todd Bennett is healthcare market leader for LexisNexis Risk Solutions.