HCI3 Update from the Field: States are Taking the Reins of Change

Submitted by francois.debrantes@hci3.org on Friday, September 20, 2013 - 12:39

Newtown, CT – September 20, 2013

In the on-going battle between the federalists and the constructionists, we see the balance shifting again to the States – While the ACA and its implementation might have set the tone, the breadth and depth of the transformation of payment and the delivery system driven by the federal government has been underwhelming. In the meantime, States, under increased budget pressure and realizing that affordable health care is necessary to keep a thriving business community and growing companies, have taken the reins of change. From Arkansas to Oregon, Maine to New Mexico, statewide efforts are reshaping the delivery of health care and positively impacting its affordability. They're doing it by aggressively using the State's purchasing power and legislative authority to move away from basic fee-for-service and reduce the negative incentives inherent in that payment model. For example, in Maryland, hospitals are given a global target for each patient in their area. That has encouraged significant improvements in efficiencies and improvement in quality of care. Nurses are dispatched to nursing homes to make sure patients are cared for well and don't risk incurring a readmission. In Arkansas, a statewide bundled payment program has expanded to a number of bundles and is showing encouraging initial results. That model has now spread to Tennessee and Ohio. In these States, the public employee plan, Medicaid and some private sector employers are all piling on together, sending a strong and consistent signal to providers, who are responding. They're also looking for Medicare to participate and help, but that help, to-date, has not been forthcoming.

What this means to you – While we'd likely all want the changes in payment and delivery to be harmonized and organized across the country for consistency, that's not going to happen, and it's not clear it should. Health care is local, and States know and understand the culture and readiness for change at their level. Medicare should simply be supporting what the States are doing, even as it continues its national efforts, and employers have to as well. Yes, it's disruptive to routine operations, and yes it's more complicated than simply doing the same model everywhere, but if it means achieving transformation faster and more effectively, no one should hesitate, least of all Medicare. Changing 20% of our economy to become of far greater societal value than it has been in the last decade requires a different way of thinking, and right now, that difference is at the State level, not the federal level. The Hamiltonians might not be happy about that, but this isn't about them, it's about all of us.