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Progress Towards Achieving Better Care, Smarter Spending, Healthier People

Summary: 
Today, for the first time, we are setting clear goals – and establishing a clear timeline – for moving from volume to value in Medicare payments.

Since my very first days as Secretary, you’ve heard me talk about improving our nation’s health delivery system to better meet the needs and expectations of the people of America.

Whether you happen to be a patient, a provider, a business, a health plan or a taxpayer, it’s in our common interest to build a health care delivery system that’s better, smarter and healthier – a system that delivers better care; a system that spends health care dollars more wisely; and a system that makes our communities healthier. 

Over the last several years we’ve started making significant progress – thanks in large part to the Affordable Care Act.

The question is, how do we build upon this progress? How do we take it to the next level?

It’s my belief that to do that we must find better ways as a country to deliver care, pay providers, and distribute information. 

Today, for the first time, we are setting clear goals – and establishing a clear timeline --for moving from volume to value in Medicare payments.  

We will use benchmarks and metrics to measure our progress; and hold ourselves accountable for reaching our goals. 

Our first goal is for 30% of all Medicare provider payments to be in alternative payment models that are tied to how well providers care for their patients, instead of how much care they provide – and to do it by 2016.  Our goal would then be to get to 50% by 2018.

So what does this mean?

In alternative payment models, providers are accountable for the quality and cost of care for the people and populations they serve, moving away from the old way of doing things, which amounted to, “the more you do, the more you get paid.”

Secretary Burwell holds a meeting about delivery system reform.

To provide some examples of models that put patients first, through Accountable Care Organizations, providers partner together on a patient’s care and get rewarded for delivering better care while spending less. In a Patient Centered Medical Home model, instead of doctors working separately in their own siloes, care coordinators oversee all the care a patient is getting.  That means patients are more likely to get the right tests and medications rather than getting duplicative tests, procedures, etc. These medical homes typically offer patients access to a doctor or other clinician 7 days a week, 24 hours a day including through extended office hours on evenings and weekends.

Another example is a “bundled payment” model.  In this model, providers are reimbursed together for the entire cost of what’s called an “episode of care” – something like say a hip replacement.  So lab tests, pre-visits, hip replacements, and so forth are all paid for in the same lump sum – whether the same test is conducted once, twice or five times.  This creates an incentive to deliver better care that makes patients healthier and keeps them out of the hospital.

Our second goal is for virtually all Medicare fee-for-service payments to be tied to quality and value; at least 85% in 2016 and 90% in 2018. 

Most providers will be tying at least some of their payments to quality and value— even those who are not yet ready to fully transition. Our goal here is to move away from the old way of doing things, which amounted to, “the more you do, the more you get paid” by linking nearly all payment to quality and value in some way to see that we are spending smarter.

If we succeed -

A patient, who is admitted to a hospital or referred to a specialist, will be more likely to get the right tests and medications because his or her doctors are coordinating and have the information they need.

Doctors will benefit as we realign the practice of medicine with the best ideals of the profession and simplify the business side of their practices.

Businesses large, medium and small – and their workers – will benefit because we are taking steps to continue to reduce the rates of historic growth in health care costs.  This means they are able to reinvest those dollars in higher quality care for their employees, among other things. 

We all benefit as our country is more competitive in the global economy. The progress we’ve made to date is already saving taxpayers $116 billion compared to where we would have been had trends continued. With the goals we’re announcing today we can build upon this progress for taxpayers while improving care for everyday Americans throughout our country.

We want to continue and build upon our work with state Medicaid programs, private payers, employers, consumers, providers, and other partners.  We also recognize our partners in the private sector have the opportunity to be even more aggressive and we welcome that.

To move the ball forward toward these goals, today we’re announcing the creation of a Health Care Payment Learning & Action Network to facilitate this public-private sector partnership.  I’m grateful that a number of folks are interested in joining, and we plan to hold our first meeting in March.

I look forward to the continued work ahead to create a better, smarter, and healthier delivery system.  

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