What we want from our system is better health; therefore, what we should pay for in our healthcare system is better health.
It's always a pleasure to be around people who are so committed to making our healthcare system work better for the American people.
It's especially nice to be around people with an entrepreneurial spirit.
That spirit drives you to improve the affordability, quality, and accessibility of American healthcare. You do this because you're innovators. But, ultimately, you do this because you want to improve the actual health of the American people.
Better health is the fundamental goal of the vision President Trump has for our healthcare system.
He understands the vital importance that health holds for every American.
He has a particular vision for healthcare: a system with affordable, personalized care, a system that puts you in control, provides peace of mind, and treats you like a human being, not a number.
Such a system will provide you with the affordability you need, the options and control you want, and the quality you deserve.
All of this stems from a promise President Trump made to the American people: He's promised to protect what works in our system and fix what's broken.
There are three cross-cutting platforms where this administration wants to deliver on this, regardless of how Americans finance their healthcare: reforming how care is financed, deriving better value from that care, and improving health in specific, impactable areas.
Each of these platforms can help answer a hard question: How do we deliver affordability, options and control, and quality all at the same time? There's only one way to do it: by orienting every piece of our system, especially our payments, around value and health, rather than procedures and sickness.
That is why I am so excited to hear about a major announcement LAN will be making today.
In 2015, you laid down ambitious goals for moving our system toward alternative, value-based payment models. We've seen tremendous progress.
Today, as some of you may know, LAN will be announcing even more ambitious goals: getting to where shared accountability payments represent 50 percent of Medicaid and commercial arrangements, and 100 percent of Medicare.
Mark McClellan will have more details on these goals in a few moments, although, knowing him, he may be backstage punching the numbers up even higher.
But I have one thing to say to you: We are right there with you. Your goals are our goals.
If there is one single way to measure how HHS is advancing toward the kind of system the President has promised, it would be measuring our progress toward these kinds of outcome-based arrangements.
That means I will be watching these numbers at least as closely as all of you are.
But piecemeal efforts won't get us there.
We need to tackle this challenge on every front: transforming payments in every corner of our health system, providing price and quality transparency, putting data and health IT in patients' and providers' hands, and getting regulatory burdens out of the way.
I want to briefly touch on some examples where this transformation is already taking place, and how we're going to take it to the next level.
One example where you see our aggressive approach is within ACOs: In the six years since their creation, we've learned a lot about what works and what doesn't within Medicare's ACO arrangements.
We consistently saw that it was ACOs who were taking on downside risk that were creating the best results.
This was true in the most recent set of results, from 2018, too.
So we've reduced the amount of time that an ACO could remain in the program without taking accountability for healthcare spending, while also working to give ACOs the maximum flexibility and opportunities possible to deliver results.
But we're going to go far beyond ACOs.
As many of you know, earlier this year, we launched CMS Primary Cares, an initiative that will enroll a quarter or more of traditional Medicare beneficiaries and a quarter of providers in arrangements centered on creating value.
What this means in practice is that primary care practitioners will get paid for keeping patients healthy, rather than for simply ordering procedures.
The Primary Care First path will allow smaller primary care practices to be paid a simple, flat rate for each patient. When a patient stays healthy and out of the hospital, these practices will get paid a bonus.
But if the patient ends up sicker than expected, these practices will bear responsibility for the extra spending, up to a certain share of their practices' revenue.
Another path, Direct Contracting, is more ambitious and aimed at larger practices and other organizations interested in the next generation of risk-based payments.
Just like in Primary Care First, when patients have a better experience and stay healthier, these practices and organizations will make more money.
But if patients end up sicker, Direct Contracting practices and organizations will bear the risk for the extra health spending, not just at their own practice but throughout the system.
We're also reviewing the input we received through an RFI on another Direct Contracting model, which would award a local entity a contract for an entire geographic area, covering all patients and providers in the area who want to opt into this arrangement.
I want to emphasize why this kind of direct contracting is so important to us.
We've been through a series of steps on value-based care, from episodic bundles to risk-based arrangements like ACOs.
Direct contracting is the next major step.
Having providers take responsibility for the total cost of care is the ultimate goal.
It will completely reorient how we think about virtually everything in healthcare, from concerns about program integrity to how we regulate quality.
We, as payors, will get to worry a great deal less about how you're spending your resources and how you're delivering care once you have responsibility for the total cost of that care.
Think about how this can work.
If you want to spend your resources on home delivered meals, if you want to come up with a collaborative arrangement with the specialist practice next door, we don't need to worry about that in the way we do for the fee-for-service system—because you'll be on the hook for outcomes and cost.
That is the kind of value-based transformation we really need—and it's where we're headed.
While we believe primary care can be a real center for transformation, we've also looked to introduce value-based models in other areas where we especially need transformation.
One of those is emergency transport. One of the most frightening and disempowering experiences any of us can have in healthcare is when you have to call an ambulance.
But Medicare generally only pays first responders if they bring a patient to the hospital or a few other alternative sites—which a patient may not need, which may be really expensive, and which may not be the best place for him or her to receive care.
You get what you pay for. When you essentially only pay for people to get taken to the hospital, people get taken to the hospital.
So CMMI launched the ET3 model, which creates a new set of incentives for emergency transport and care and presents an exciting opportunity for first responders not only to take patients to the right site for them, but maybe provide the care patients need right on site.
Then there's kidney care.
There may be no better example than kidney care of how the status quo in healthcare can sideline patients, discourage provider innovation, distort payment incentives, and focus on paying for treating sickness and procedures rather than health and outcomes.
So, as part of the President's kidney health initiative, to help prevent kidney failure in the first place, we launched four optional payment models, known as Kidney Care Choices, expected to enroll more than 200,000 Medicare patients in arrangements with new incentives to prevent the progression of kidney disease and manage kidney patients' health.
Within that model, there is one pathway for nephrologists to receive bonuses for keeping patients healthy, and three model options for local entities to take on different levels of financial risk for the health of their patients.
Second, to provide more options for people with kidney failure, we proposed a mandatory payment model.
The model, known as ESRD Treatment Choices, which will give about half of all dialysis providers' new incentives to encourage dialysis in the home. This means a significant portion of Medicare patients with kidney failure will be able to benefit from the expanded options encouraged by this model, with the support and education they need to benefit from them.
Finally, to fully deliver on the benefits we can get by paying for health, we're planning regulatory reforms, too, around transplant procurement and donor support, so we can increase the number of transplantable organs.
These models are right around the corner.
Today, I'm pleased to announce to all of you, CMS is posting the Requests for Applications for the Kidney Care Choices model and the Primary Care First model.
We expect the RFA for the Direct Contracting model I mentioned to be out shortly as well.
I encourage you to go to the CMMI website to review these RFAs and to reach out to CMS and CMMI with any questions.
But, I must note, that is not an excuse to start looking at them now and tune out Mark McClellan's speech.
Finally, value-based approaches, and you all know this well, shouldn't be limited to models the government creates.
We need to be thinking about the underlying dynamics of our healthcare system—and how to empower patients and providers to seek out value themselves.
This brings me to the issue of transparency. Most of you in this room work in healthcare.
Many of you are pretty savvy, technologically and financially.
But how many of you have, at some point, been shocked by the bill you got for a healthcare procedure?
I know I have. A few years ago, when my doctor recommended I get a routine heart test, the hospital where I was sent told me the list price would be $5,500—when it turned out I could pay $550 for it at an outpatient clinic.
Making this information available to patients easily and immediately, before they ever have to make a healthcare decision, is the goal of the transparency executive order the President signed earlier this year.
Under the EO, hospitals will have to disclose information about their negotiated rates in a public format that is understandable and usable for patients.
Insurance companies will be required to provide patients with information about out-of-pocket costs before they receive services, rather than weeks later when they get the bill.
In addition to making patients more conscious consumers of healthcare, we need to help providers determine high and low value interventions for their patients through unleashing data.
But this data won't stop at cost and quality: we need to ensure patients have the data they need to know what's actually going on with their health.
That requires tackling the balkanized nature of our health IT systems.
How many of you have had appointments at the doctor drawn out just because, seemingly every specialist you see, you have to relay all of your information, all over again?
And, I know a lot of you are physicians: Raise your hand if, at some point, you've spent an inordinate amount of time trying to access your patients' records, or help them access their own? I think we can agree that's way too many hands.
The situation has to change, for both providers and patients. It's possible to provide a nearly seamless experience, if we put control of your own data in your hands, as the patient, as we've proposed to do through our interoperability rule.
I want to mention one final regulatory effort, which I presented at the Cabinet meeting with the President earlier this week.
There's something just about everyone has agreed on in healthcare for a long time: We want doctors, patients, and hospitals to work together to coordinate your healthcare, to guide you through the system and keep you healthy.
But as many of you know, regulations under the Stark Law and the Anti-Kickback Statute have long stood in the way.
That's why President Trump has now proposed the first-ever major revision of these regulations with a view toward advancing value-based care.
Our proposals will finally enable a whole range of commonsense arrangements between doctors, hospitals, and physicians.
How often do you get worried about adherence for a patient with a lot of medications?
Under our proposal, you could provide her with a smart pillbox, which reminds her when to take her medicine, and lets you know when she's missed a dose. A large hospital system could work with smaller physicians' practices to provide them with free cybersecurity software that enables a secure link for patient records between the hospital and the physicians' offices.
Or a primary care provider could share data analytics services with a specialist, allowing them to coordinate on their patients' care. Those latter two scenarios, I'd note, could mean more coordination among providers, without consolidation.
As many of you know, CMMI models have traditionally offered waivers from Stark and Anti-Kickback rules, if you're participating in the model.
But if we want to bring value-based, coordinated care to every corner of our system—and that's not only our goal, but yours, too—we cannot do it without extending exemptions to anyone who wants to build these kinds of arrangements.
A value-based healthcare system resonates with each of us because it's just commonsense.
What we want from our system is better health; therefore, what we should pay for in our healthcare system is better health.
But we can't reach that goal without you. Each one of you plays a significant role in the vision I just laid out—and now you've got some new, clear goals.
So we want your input and help as we work to make a value-based transformation a reality.
Only through this transformation will we be able to achieve what we're all working toward: better health at an affordable cost.
There's never been a more exciting time to be doing what you're doing—building a system focused on value and health—than today. It's been a long time coming, but it's finally here.
I hope you're excited, because we're moving full speed ahead, and there's no turning back.
So, please join us on this journey, and, together, we will create a healthcare system that delivers better health for every American.
Thank you for having me here today.