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Francois de Brantes on Medicare Payment Reform

Posted on by CATALYSIS

We sit down with HCI3’s Francois de Brantes, one of the keynotes for June’s Lean Healthcare Transformation Summit, to talk about his take on Medicare payment reform.

His answers below are adapted from thoughts he shared in his organization’s newsletter at the start of the New Year.

What grade would you give CMMI‘s payment reform efforts in Medicare to-date?
A solid C. While CMMI has been busy launching a number of initiatives, the net impact on Medicare spend has been negligible and the office didn‘t produce any significant payment innovation. Nearly 90% of all provider payment funds, especially for professional and ancillary services, are still based on volume, not value. In the CMMI initiatives launched last year, less than 10% of patients‘ care was paid for in a way other than straight fee-for-service (FFS).

You mention several initiatives launched by the CMMI. Can you break those out for us and share your opinions on them?
The ACO expansions simply increase the number of provider organizations in global capitation/trend rate target arrangements, many of whom already had similar arrangements in place with private sector payers. The CPCI is not that different from already existing PCP-based Medical Home initiatives. In fact, quite a few of the sites selected for the CPCI had an on-going PCMH program. Finally, the bundled payment program won’t achieve lift off until later this year, mostly because of design flaws. While it could have been better, it did send a clear signal to the market that we are moving away from FFS. That’s important.

What are your recommendations for making more meaningful, sustainable changes in healthcare payment?
We need far more focus on payment reform from CMMI in 2013 if we hope to get a decent return on the billions spent. For starters, CMMI should move to implement a number of the recommendations outlined in two NEJM Sounding Board papers a couple of months ago.

First, formalize and implement the Acute Care Episode program universally across all of Medicare. Second, deploy full price transparency of standard procedural episodes. The private sector is doing this with a number of tools, and Medicare should as well. Every beneficiary should know the differences in average episode costs for all the providers in their area. Third, institute competitive bidding for all medical devices, lab tests, basic imaging, and other “commodities”.

CMMI should also launch RFPs for the promised second wave of bundled payments, those focusing on chronic conditions. Given the amount of time it has taken to design and get close to launch on the first wave, every day wasted gets us farther away from the goal of having the majority of Medicare dollars flowing through something else than FFS.

For more information about Francois’ role in the 2013 Lean Healthcare Transformation Summit, check out the registration page here.

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