As reported from our associates at Thorn Run Partners:
A bipartisan group of governors comprised of Govs. John Kasich (R-OH), Brian Sandoval (R-NV), Tom Wolf (D-PA), John Hickenlooper (D-CO), and Bill Walker (I-AK), released a proposal which they suggest could serve as a blueprint to reform the nation's health care system. The plan - released ahead of a national meeting of governors in Washington, D.C. - aims to lower health care costs and improve affordability within the health care system. In a joint statement in regards to the proposal, Gov. Kasich and Gov. Hickenlooper drew attention to the sharp contrast in health care spending "where costs have steadily increased, but outcomes have not improved" compared to other sectors of the economy, and outlined how the plan would stabilize insurance markets and lower health care costs while improving health outcomes.
The plan centers around the idea of transitioning to a health care system that pays providers based on quality, as opposed to quantity of service. Gov. Kasich said it was critical to curb rising health care costs to avoid moving toward a single-payer system or a "two-tier-system" which prohibits access to health care for low income beneficiaries. The proposal urges Congress to work with states to expand Medicaid innovations like value-based health care models and reduce restrictions that prohibit states from innovating their health care programs.
• What it Means. As talk of health care reform remains politically divisive in Washington, D.C, it is unclear to what degree the governors' proposal will influence the Trump Administration or whether Congress has the bandwidth to take on major statutory reforms. Individual states may have some success in pursuing these concepts through tailored state proposals. Additionally, some may view the effort as laying the groundwork for future campaign platforms for potential presidential candidates.
The strategies listed in the proposal to increase health care system performance include:
• Reorient the System on Value
Key components –
o Measure the value delivered by all health care providers and payers in a way that is fair, technically credible, and relevant to patients and purchasers; and make this information broadly transparent to all policymakers, consumers, and stakeholders.
o Use information and incentives to drive an evolution of primary care, from being reactive, focused on individual encounters, and fragmented, to holistic care delivered by coordinated teams of clinicians empowered and accountable for the health and cost of populations over time.
o Use information and incentives to empower and hold providers accountable for the end-to-end costs and outcomes for episodes of care.
o States "lead by example" using Medicaid and state employee benefits (and to a lesser extent, individual and small group markets) as a catalyst for change, to overcome inertia, and achieve critical mass to reorient the system on value across public and private sectors.
o Federal government champions value-based care in federal programs (e.g., Medicare, MACRA Quality Payment Program, Federal Employee Benefits) and those jointly-administered with the states, aligns priorities for value-based purchasing across all federal agencies, and uses its regulatory capacity to support or partner with states and the private sector.
• Align Consumer Incentives
Key components –
o Ensure that all Americans have access to appropriate, affordable, high quality coverage independent of their health, age, gender, employment status, or financial situation.
o Build upon existing financial incentives to encourage consumers to secure coverage and prepare for potential out-of-pocket expenditures.
o Ensure that each American financially contributes to their health care consistent with their financial capacity
o Encourage responsible choices by empowering consumers with useful information and incenting healthy lifestyles and value-conscious care delivery decisions.
o Encourage the creation of new technologies and tools that will allow consumers to create value-based health care decisions.
• Encourage More Competition and Innovation
Key components –
o Encourage innovation (including cost-reducing innovation) in business, technology, and workforce models.
o Directly combat anti-competitive behavior, particularly among local hospital systems, pharmacy benefits managers, and pharmaceutical companies.
o Require greater sharing of health care data of all types across entities.
o Systematically review and rationalize federal and state regulation that may inhibit innovation and competition (e.g., credentialing, clinical trials, and prescription drug import regulations).
• Reform Insurance Markets
Key components –
o Encourage more consumers to participate in plans that are available to them either though their employer or other markets (e.g., ERISA plans at large employers, small group plans, Medicare Advantage, individual market).
o Ensure lower income consumers have access to quality coverage by maximizing all available options (e.g., financial assistance, expanding Medicaid), while avoiding perverse incentives.
o Build on the August 30, 2017, bipartisan governor's recommendations to strengthen our nation's individual health insurance markets
• Expand Proven State Medicaid Innovations
Key components –
o Define and scale value-based care and payment models (e.g., integration of physical and behavioral health, comprehensive primary care, episodes of care).
o Invest in state-based transitions to new value-based models of care that have the potential to reduce per capita Medicaid spending over time.
o Incorporate social determinants of health into Medicaid.
o Measure and incent health and critical social outcomes (e.g., reducing poverty, increasing employment, reducing criminal recidivism).
o Manage Medicaid risk-adjusted cost per person, over time, below national medical inflation.
o Use best practice vendor management to extract meaningful value from third parties (e.g., managed care companies, IT vendors).
o Provide a smooth transition from Medicaid to the individual market (back and forth) while reducing churn between the two.
• Modernize the State and Federal Relationship
Key components –
o In partnership with states, the Federal government should focus on defining and protecting a real "minimum" standard, or "floor," for health care systems in every state that maintains coverage, increases value, and protects consumers, while affording states broad independence above that floor.
o Federal government to provide leadership where a national approach is most efficient (e.g., regulation of pharmaceuticals, air ambulances).
o Fully align governance and incentives in programs shared among states and federal government (e.g., dual-eligible members).
o Explicitly recognize successful state innovations in value-based care (e.g., via the State Innovation Model program) and support other states in replicating those successes (e.g., resources, expedited waivers) while aligning Medicare as much as possible.
o Streamline administrative processes (e.g., waiver requests) to be easier, faster, more consistent, and more predictable.
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Robert Still FRBMA
Executive Director
Radiology Business Management Association (RBMA)
Fairfax VA
(703) 621-3363
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