In Modern Healthcare on April 7, Bob Herman reported on the relatively positive treatment afforded to Medicare Advantage insurers by CMS for 2016 (“Medicare Advantage Rates Show Insurers' Lobbying Muscle”). As the article’s title implies, the industry won some key victories, including the highest increase to the base payment rate since the advent of the Affordable Care Act. The article links those victories to the $12-million lobbying budget of payers, but that budget hasn’t changed much in recent years. Why the change in attitude now?
Here’s a novel thought—perhaps CMS was kinder to Medicare Advantage because it works so well. The program isn’t just popular with consumers (who often get the benefits of a high-end Medicare Supplement for zero premium), primary care doctors (who can increase their income significantly in a good Medicare Advantage risk-sharing contract), and payers (who reap substantial profits or surplus for managing chronically ill populations). It also delivers superior results to society versus fee-for-service. Boston Consulting Group’s “Alternative Payment Models Show Improved Health-Care Value” (May 14, 2013) highlights this superiority:
I believe that CMS leadership is focused not only on these results, but on the idea that the work to achieve these results is creating infrastructure and skills that are essential to reform.
Why? Medicare Advantage (MA) is the only national program that engages payers, providers, and consumers in a consistent set of value-based economic incentives and closed-loop information flows that derive from and support all three elements of the Triple Aim—reduced cost, improved quality, and better patient experience.
To succeed in MA, payers must ensure that quality care is delivered through their network, which generally means providing contracts to providers that reward the proactive management of the chronically ill. Typically, successful payers also share significant population health informatics and support functions like Medical Management with providers—especially primary care practices and smaller delivery systems who can’t afford their own population health infrastructure. And, critically, payer success must be earned anew each year by meeting the challenging set of Star Rating metrics—metrics that ratchet up each season to advance the clinical quality agenda.
What is much less appreciated is that the payer must also deliver a superior consumer experience. The Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey process, in which consumers are interviewed directly without the involvement of payers or providers, requires that payers and providers communicate well with members and engage them in real conversations. Bad customer support has a huge impact on CAHPS and on Star ratings.
In addition, success in these MA contracts brings substantial benefits to providers—not only financially, but in the job satisfaction that comes from the ability to spend more time with patients... the reason that most became clinicians in the first place. More importantly, from a national perspective, the tasks required of the providers are increasingly central to the emerging new U.S. healthcare model: prospective health status assessments, care planning, coordination of care, and honest end-of-life dialogue.
Medicare Advantage has always had its critics. While some are ideologically opposed to private insurers being part of Medicare, others are concerned that insurers can game the system, for example by inflating HCC codes illegally. This concern is valid, but CMS has every regulation, incentive, and resource needed to enforce the law vigorously -- and most independent consultants who work with CMS or the insurers will tell you that by and large they are enforced with vigor today.
While Meaningful Use (MU) has been enormously important as a kind of quality check on the process of patient record digitization funded by the HITECH Act, it suffers from several structural shortfalls compared with Medicare Advantage as a tool to drive reform. MU’s power to drive change derives from the government’s desire to see HITECH implemented well; therefore, its power declines as HITECH expires and, in fact, MU is entering its final phase. More importantly, MU’s power does not derive from the inherent economics of accountable care, failing to motivate either payers or consumers who must both be part of sustainable reform.
As Farzad Mostashari has observed, the most potent force of all to drive reform and interoperability is consumer demand. The hospital-based delivery systems and EMR vendors targeted by Meaningful Use are poorly equipped to influence consumer behavior—hospital-based delivery systems do not have a deep history of consumer engagement regarding proactive health, and EMR vendors have little motivation or experience connecting directly with consumers. By contrast, MA payers have the budget and motivation to market directly to consumers and to influence their behavior.
Take one example: the electronic delivery of discharge information to patients. MU attempts to impose, on hospital systems and on EMR vendors, a percentage of patients for whom such delivery is enabled— but most hospitals report zero consumer demand and are thus excluded from the requirement. If this goal were included in the Star Ratings criteria, payers would put the goal into their provider contracts, pay for the technology to deliver it, and market the benefits to MA members and their family caregivers.
Thanks to the brilliant designers at CMS who have improved the Medicare Advantage program incrementally across the Clinton, Bush, and Obama administrations, MA has become the most powerful instrument we have to drive national reform. It connects to and reflects the true economic underpinnings of the Triple Aim and provides in its Star Rating system an uncanny engine to enable the entire industry to become the “learning system” envisioned by the ONC’s Interoperability Roadmap.
All of us—payers, clinicians, vendors as well as the academic, clinical, and policy establishment—need to leverage the power of Medicare Advantage as a reform tool that is sharp, proven, sustainable, and improving continuously. This is the future.