Newtown, CT – January 30, 2015
It's pretty easy to make promises that you don't have to keep – That's what the administration did earlier this week to much hoopla. While we should all aspire that HHS reaches its goal of converting 90% of straight fee-for-service payments to some form of performance-based payment, let's be clear about those goals and what they mean. First, no administration that knows it is leaving office permanently should set goals for a point in time after they leave. It's just an empty promise. So let's focus instead on the goal the administration can be held accountable for (even though they won't be there by the time the goals are checked against actual performance): 30% of payments tied to bundles, total cost targets, or modified Medicaid-Medicare FFS payments. That certainly seems an achievable goal, especially given CPR's recent report that showed the private sector already above the 30% goal. But there are some serious obstacles for HHS to meet its target by end of 2016, not least of which is the growing chorus of voices of discontent with the current CMMI payment innovations.
What this means to you – States and health plans across the country are moving to convert straight FFS-based provider contracts to performance-based contracts. In doing so, they are broadly experimenting with different approaches, learning as they go what works and what could be done better. The flexible approach being taken recognizes the heterogeneity of the underlying health care market, from county to county and certainly from State to State. The formulas for what constitutes high performance, how to measure it and how to reward it, all the while minimizing unintended consequences, are ever-evolving, and might never stop evolving because the delivery system will change as incentives change. As a result, any stated goal to significantly increase the performance-based dollars paid out by Medicare should have been accompanied by several other commitments:
- to broadly delegate innovation to States while holding them accountable for results (we proposed as much in a Brookings report);
- to continuously incorporate feedback on the current programs and modify them accordingly (several organizations have already written letters to HHS pleading for needed changes); and
- to learn from the private sector efforts and adopt what works whenever possible.
Instead, the HHS declaration focused on how they have assembled a group of political hacks to, apparently, push out the CMMI models in an effort to "harmonize payment efforts." That type of hubris – we know what we're doing and the rest should follow – has been emblematic of the administration's approach to payment reform and the growing potential that instead of reaching 30% by end of 2016, they'll be down in the teens. As a reminder, these are voluntary payment programs, and unless this administration (and the next) starts listening to those in the field and embracing flexibility and heterogeneity in approaches, the current volunteers will simply step back, and the goals laid out this week will, in fact, be very much a promise that won't be kept.