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Better Care, Smarter Spending, Healthier People: Improving Our Health Care Delivery System With an Engaged and Empowered Consumer at the Center

Updated September 29, 2015


For the last 50 years, Americans have faced challenges in navigating a health care system in which patients and caregivers have not always come first. Doctors were encouraged to focus on the amount of care they delivered, rather than how effectively they treated patients’ big-picture health. Our nation spent more on health care per person than any other and costs were on the rise. And despite being home to some of the best medical schools in the world, and the leader in health research and discoveries, our people often had worse health outcomes. In short, we paid more to get less.  

With the Affordable Care Act (ACA), we took one of the most important steps toward a more accessible, affordable, and higher quality health care system in almost 50 years. In fact, since it became law, about 17.6 million uninsured people have gained coverage—the largest reduction in the uninsured in decades. This is a historic start, but there is more work to do.

Better Care, Smarter Spending, Healthier People

Using the ACA’s new tools, we have an opportunity to seize this historic moment to transform our health care system into one that works better for the American people. We have a vision of a system that delivers better care, spends our dollars in a smarter way, and puts patients in the center of their care to keep them healthy.

To make that vision a reality, we have a three-fold strategy to:

  1. Pay providers for what works and incentivize quality of care over quantity of services.
  2. Improve care delivery by promoting coordination and integration, with a priority on prevention and wellness.
  3. Share health information so that providers are better informed and consumers are empowered to be active participants in their care.

Through all of this work, we are committed to putting engaged and empowered consumers at the center of their care. We believe we can improve health outcomes for everyone and strengthen our system as a whole when people play a more informed and active role in staying healthy and making treatment choices and when patients and providers partner together.

The Path Forward

Already, we are making great strides across these three areas, and these changes are directly impacting consumers and providers alike.

Paying Providers for Quality, Not Quantity

Rather than paying for the quantity of tests and screenings that providers order—a common practice—we are moving toward paying for the quality of care given. For patients, this can lead to more frequent communication with their care provider and fewer unnecessary trips back to the hospital.

  • Value-Based Payment Goals: In January 2015, the Administration announced measurable goals and a timeline to move the Medicare program, and the health care system at large, toward paying providers based on the quality, rather than the quantity of care they give patients. Specifically, the Department of Health and Human Services (HHS) set a goal of tying 30 percent of Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs), advanced primary care medical homes or bundled payment arrangements, by the end of 2016, and tying 50 percent of payments to these models by the end of 2018. HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs. This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments. These goals will help improve patient care and drive value and quality system-wide.

As reported in the Boston Globe, Cheryl Moisan, a resident of Lunenburg, Massachusetts, is covered by a health plan that rewards doctors for meeting measures of quality. Her providers regularly reach out with letters and phone calls to remind her when it’s time for a colonoscopy, mammogram, or blood sugar test.  Without these reminders, incentivized by a health insurance plan that pays doctors for quality care, Moisan says that she doesn’t know if she would remember to get these preventive services.

  • Paying for Outcomes: HHS recently announced a proposed new payment model to encourage better coordination in hip and knee replacement surgeries for certain Medicare patients. While some incentives exist for hospitals to avoid post-surgery complications that can result in pain, readmissions to the hospital, or protracted rehabilitative care, the quality and cost of care for these hip and knee replacement surgeries still vary greatly among providers. Under the Comprehensive Care for Joint Replacement Model, the hospital in which the hip or knee replacement takes place would be accountable for the costs and quality of care from the time of the surgery through 90 days after—what’s called an episode of care. Depending on the hospital’s quality and cost performance during the episode, the hospital may be rewarded or may need to repay Medicare for a portion of the costs.

By the time a patient has recovered from a hip replacement, one of the most common inpatient surgeries for those on Medicare, she likely will have seen a primary care doctor, an orthopedic surgeon, nurses, and rehabilitation specialists, in several different care settings. Many times, these providers don’t coordinate with each other along the way. Will they catch her arthritis medication when prescribing an antibiotic? Will they consider her diabetes when working through strengthening exercises? Like a symphony, our health care is made up of many different, interconnected players. When we approach care without seeing the big picture, we risk missing crucial information. Tests are duplicated, treatments may be less effective, and patients are left holding bills they don’t understand. We see post-surgery complications, prolonged recovery, readmissions to hospitals, and higher and inconsistent costs. In fact, for hip and knee replacements, the average Medicare expenditure for the hospitalization, surgery, and recovery period ranges from $16,500 to $33,000 in different geographic areas, and the complication rate can be more than three times higher at some facilities than others. By “bundling” these payments, hospitals and physicians have an incentive to work together to deliver more effective and efficient care. In this way, we pay for the outcomes that we want—getting people healthier faster and keeping them that way for longer.

  • Learning and Action Network: In early 2015, HHS announced the creation of the Health Care Payment Learning and Action Network alongside the announcement of new goals to move the Medicare program and the health system at large towards paying for quality over quantity. The Network is a forum for public and private sector leaders, including businesses, consumers, payers, providers, purchasers, and many others, to come together to move the health system towards value-based payment models and other alternative payment models for care. Already, dozens of organizations have set goals for payment reform that align with the value-based payment goals set by Medicare.

Cigna agrees to the goals set by HHS, including 90 percent of payments in value-based arrangements and 50 percent of payments in alternative payment models by 2018. Cigna will particularly focus on ensuring that physicians providing care to its most vulnerable and at risk customers have an incentive and assistance to provide high quality, value based care. (Value-based arrangements generally tie financial incentives to quality or value.)”

“The American College of Physicians (ACP) joined to move the Medicare program, and the health care system at large, toward paying clinicians based on the quality, rather than the quantity of care they give patients. The Health Care Payment Learning and Action Network is a key component of this effort. ‘ACP will educate our 141,000-member physicians about – and promote broad adoption of – alternative payments models, including the Patient-Centered Medical Home (PCMH), the PCMH neighborhood/ specialty practice model, and accountable care organizations (ACOs),’ said Steven E. Weinberger, MD, FACP, ACP’s executive vice president and chief executive officer, who attended today’s event. ‘ACP is committed to continuing to develop numerous tools and resources to help physicians make the transition to these alternative payment and delivery system models. Through its High Value Care initiative and its Center for Patient Partnership in Healthcare, ACP will promote ways for patients and clinicians to work together as partners to achieve the highest quality, patient-centered health care.’”

Improving the Delivery of Care

Doctors choose the medical profession to help people, but there are often hurdles to doing this. We want to realign the practice of medicine with the ideals of the profession and give tools to providers to keep the focus on patient health and help them deliver the best care possible.

  • Investing In Care Coordination: The Comprehensive Primary Care Initiative, implemented by the Innovation Center in the Centers for Medicare & Medicaid Services, is working with doctors and other health care providers to test the effects of enhanced care management strategies to best meet patient’s needs, like call lines that have nurses available for advice around the clock and expanded office hours for patients. 
  • In its first year, the Comprehensive Primary Care (CPC) Initiative worked with nearly 500 practices that serve more than 2.5 million patients and results from the first year suggest that CPC has generated nearly enough savings in Medicare health expenditures to offset the care management fees paid by CMS. Most of the savings came from fewer hospital admissions and emergency room visits and lower costs for some patients with the most costly conditions.

Dr. Glenn Madrid; Grand Junction, Colorado; CPC Initiative Participant: “It takes a village, or at least a well-coordinated team, to care for our patients….The funds we have received from participating insurers [through the CPC Initiative] have allowed us to hire case coordinators, a clinical pharmacist and in-house behavioral specialists….What does this mean for our patients? I was able to know that one of our older patients hadn’t been seen for several months and I needed to check on how she was managing her diabetes. Our clinical pharmacist wondered why another patient’s thyroid condition wasn’t responding to medication and learned from the local pharmacy that she wasn’t filling her prescriptions because she had lost her insurance—we helped her get covered again…. Now, when patients have been admitted or discharged, our case managers get a daily list so we can make sure their transition in care is smooth.  And our team, including representatives from two home health agencies, also meets weekly to discuss and re-evaluate our higher risk patients. We are always asking: How can we prevent hospitalizations and readmissions? Why was the patient at the ER?... Most of our patients don’t realize what’s going on behind the scenes to improve their health; but they are satisfied with the care they’re getting. I did hear from one man that it was “pretty neat” that someone from the practice had called him at home. Another patient was still at the ER when he was contacted and said, “That meant a lot to me.”  

  • Treating Patients Where They Are: With new tools and the testing of new payment models, such as the creation of ACOs, we are increasingly trying to meet patients and their families where they are and make getting care more convenient for them.

As reported in the Boston Globe, Rose Fiorino, an 86-year-old resident of East Boston, is a member of an ACO that lets her recover in the comfort of her own home rather than having to stay in a hospital. Fiorino she is very happy to have regular visits by her nurse practitioner, Gail Metcalf. “She’s so good,” Rose says about Gail. “I’m so lucky she comes.”

  • Improving Hospital Safety: The Partnership for Patients Initiative is investing in sharing best practices and solutions for reducing hospital-acquired conditions, readmissions, and harm across hospitals nationwide. And they are already seeing results. There have been 1.3 million fewer hospital acquired conditions and 50,000 patient deaths avoided, leading to an estimated $12 billion in health care costs saved. This translates into a 17 percent reduction in patient harm nationally over the three-year period from 2010-2013.

Alicia Cole, Former Actress, Partnership for Patient Participant: “Almost immediately following [a routine uterine fibroid] surgery, I started showing signs of sepsis: fever, vomiting and worsening pain …. Days later, I was diagnosed with necrotizing fasciitis – commonly known as man-eating flesh disease. The rapid spread led to five more operations cutting away at my abdomen, hip and groin. I had contracted a preventable hospital-acquired infection (HAI). While necrotizing fasciitis was the big one, I was also treated for several superbugs, including MRSA, VRE and C-Diff, all life-threatening bacteria that are resistant to antibiotics. Thankfully, improvements to our health care system are happening right now to prevent anyone else from going through what I did. “I’m proud to have worked with Partnership for Patients….“To continue and build on this progress, we all need to work together – patients, advocates, families and providers.”

Unlocking Data and Health Information

With easier electronic access to health care data, doctors can make timely and coordinated care decisions, and patients and caregivers can stay more informed and knowledgeable about their health and wellness and take a more active role in their care.

  • Electronic Health Records: Today, 3 out of every 4 hospitals are using some form of health information technology product, such as EHRs, and these tools and the portals associated with them are opening new doors for providers to innovate and communicate with their patients and for patients. These technologies are also unlocking greater opportunities to empower patients and caregivers with easier online access to vital health information so they can  reference it as needed to better manage their health and care.

Dr. Nancy Beran; Thornwood, New York; Comprehensive Primary Care Initiative Participant: “I went into medicine for one reason: I wanted to help people. And five years ago, my practice was fortunate enough to embark on a transformation that helped us provide our patients with greater access to higher quality care…. One big change that has helped us grow is the use of cutting-edge technology like electronic health records. With EHRs, our various doctors and specialists can track patient medical histories, reduce errors, speed information particularly in emergencies and provide a continuum of care. This kind of information has also allowed us to address the big-picture health of our practice. By mining insurers’ data and adding our own electronic health records, we have learned more about our entire patient population health, and we’ve been able to better assess how our doctors are doing. For example, we’ve produced reports that allow us to view our diabetic patient population and analyze the date of their last visit, the results of their lab work, and other information.  When I started my training, we each focused on caring for the patient right in front of us. Now we can focus on our community of patients: who has diabetes, or who is sickest. With electronic health records, you can easily run a report, check on screening results or follow up on tests. I can send flu shot reminders to everyone with the push of a button. That’s something you just can’t do in a paper world.”

Kim Blanton, Patient; Partnership for Patients Participant: Two things kept sending Kim Blanton to the Emergency Room: her health conditions and her lack of knowledge. Without a coordinated effort to address her health, she lacked understanding for both how to manage her conditions and her treatments, and as a result, visited the ER more than 70 times over a six-year period. Finally, a doctor took her hand and told her she couldn’t just rely on hospitals…she had to start helping herself. “It was an epiphany,” Kim said. She now uses a patient portal to monitor her health by posting blood pressure numbers and weight and gets her physician’s analysis on her mobile devices. Her doctors can alert her to screenings and tests that she used to forget. She’s become a bigger advocate for her own health and has drastically cut her ER and hospital visits. “[It’s] not enough to make changes for patients,” she said, “We have work to improve this system with patients, putting them at the center of their care.”

  • Access to Cost and Quality Data: Cost and charge data for hundreds of services and quality ratings for hundreds of thousands of providers and hospitals are now available on Medicare.gov. HHS is making major strides to expand and improve its provider Compare websites, which empower consumers with information to make more informed health care decisions, encourage providers to strive for higher levels of quality, and drive overall health system improvement.

Helen Haskell, Mother; Partnership for Patient Participant: “They say when you lose a child, your life splits into “before” and “after.” Before, my 15-year-old son Lewis was an extraordinarily promising boy. He was a soccer player, an actor, a musician, a natural comedian. But on Nov. 2, 2000, a Thursday, my life turned into an “after.” Lewis went to the hospital for elective surgery to correct a chest defect. Over that weekend, he bled to death as various doctors and nurses missed the signs of serious complications. He died because of the improper administration and monitoring of a medication. Since his death, I have been building a legacy for Lewis. I founded Mothers Against Medical Error, which participated in the Partnership for Patients (PfP), a public-private collaborative led by the Centers for Medicare and Medicaid Services, made possible by the Affordable Care Act. Together, we aim to reduce hospital-acquired harms and increase meaningful patient and family engagement. There are ways that we can help families avoid the heartbreak that we endured, like making information more accessible to patients and health care providers so they can make more informed decisions. Without accessible, quality information, everybody is simply operating in the dark.”

Content created by Assistant Secretary for Public Affairs (ASPA)
Content last reviewed on September 29, 2015
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