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Former HHS Secretary Leavitt Weighs in for Alternative Payment Models


In a commentary, Leavitt argues that the fee-for-service system that built up around Medicare was centered on providers, not patients.

The last Republican to serve as HHS secretary has made a public pitch to keep the nation’s healthcare system moving toward value-based payment, as his party works to repeal and replace the Affordable Care Act (ACA).

Former secretary and Utah Governor Mike Leavitt, now the chairman of Leavitt Partners, writes in The Hill Wednesday that alternative payment models (APMs) are “a must,” describing them as “one of the few broadly supported ideas for moving healthcare forward.”

APMs, which include bundled payments, have been touted by conservative healthcare experts as an idea that deserves to survive the ACA’s demise. A panel convened by the American Enterprise Institute on January 13, 2017 saw bipartisan support for the “value agenda,” as evidenced by the lopsided majorities when Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA).

Leavitt writes that the fee-for-service system that evolved around Medicare 50 years ago put healthcare providers, not patients, at the center, “rewarding the volume rather than the value of services, and focusing on sickness rather than preventative care.”

APMs, he argues, “are the clear antidote to today’s cost and quality conundrum in healthcare.” In contrast with claims by House Speaker Paul Ryan that the ACA has weakened the financial health of Medicare, Leavitt points out that early efforts with accountable care organizations (ACOs) in Medicare have generated $1.29 billion in savings and improved quality in 84% of indicators.

Leavitt argues that bundled payments have great potential, but it is unclear what President Donald J. Trump’s executive order will mean for 2 recent efforts: the cardiac care bundles and the expansion of the program for hip and knee replacements. While CMS enacted a final rule for these in December, it is not set to take effect until next month, and a Congressional Research Service memo suggests that this rule could be shelved for 60 days while the incoming administration reviews it.

In his commentary, Leavitt recommends the following to speed the movement to value-based care:

· Better incentives to motivate the entire continuum of care, from primary care, to hospitals, to postacute care.

· Ongoing funding for “evidence-based demonstrations,” which is the work of CMS’ Centers for Medicare and Medicaid Innovation (CMMI). However, the nominee for HHS Secretary, US Rep. Tom Price, R-Georgia, has been a critic of CMMI and some bundled payment programs in particular.

· Quality measures must be transparent to the public, especially patient-reported outcomes.

Michael Abrams, principal and managing partner of Numerof Associates, said even if a rule is delayed for a few weeks, no one should assume any policy decisions have been made. "It's too soon to make any judgments," he said. That said, he noted Price's past statements about CMMI and said that if he is confirmed, it would be important for him to approach alternate payment models not as an orthopedic surgeon, but as the leader of HHS. It''s important, Abrams said, "to do what's right for the country."

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