It has been a couple weeks since House Republicans passed the American Health Care Act (AHCA). In my last My Take, I outlined the process the Senate will go through in moving the legislation forward, and what it will take to bring a bill to the president’s desk. While repealing and replacing the Affordable Care Act (ACA) is dominating the headlines and would certainly have a significant impact on the health care landscape, I think the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) has the potential to be equally, if not far more, transformative to our health care system in terms of improving access to high-quality and lower-cost health care. A bipartisan law passed in 2015, MACRA is in its first year of implementation. And as we describe in Rebuilding the foundation of health care under MACRA, it is already quietly changing the health care conversation behind the scenes.
First the law will impact many Medicare stakeholders. Not just many of the health care providers being paid under the Medicare Physician Fee Schedule, but also the 48 million beneficiaries, the caregivers who serve them, medical device manufacturers, pharmaceutical companies, and health insurers. MACRA rewards physicians for improving the way they deliver care while transforming payment and care delivery models to reduce costs and total expenditures under the Medicare program. Second, the law is poised to reach beyond Medicare into the Medicare Advantage, Medicaid, and the commercial space, and improve quality and care delivery across the spectrum. MACRA’s scale looms large.
MACRA is changing collaborations and conversations
In March, the Deloitte Center for Health Solutions teamed up with the Network for Excellence in Health Innovation (NEHI) and brought 31 stakeholders to Washington, DC to discuss MACRA implementation. Behind closed doors, and with no pressure to come up with solutions, health care leaders from across the US health care industry–health care providers, health plans, and biopharmaceutical (biopharma) and medical technology (medtech) companies–candidly discussed some of the challenges they’re encountering in the early stages of the law’s implementation and their thoughts on how best to move toward a value-driven care system.
The law creates incentives to move away from the often antiquated fee-for-service model in Medicare and toward a system that rewards value. That change has the potential to reduce health care costs, lower insurance premiums and, most importantly, improve the quality of care that patients receive. That’s the magic behind MACRA. But to realize this promise, stakeholders will likely have to pull together for the common good. If these collaborations succeed, each group can benefit.
The participants that day said they are well aware of the obstacles they face under MACRA such as tracking and reporting new quality measures, bearing risk in payment models, and adopting information and technology platforms that can truly speak to each other. But they said they are also curious about the challenges other groups face, and the steps they are taking to address them. Watching these different stakeholders share ideas and really listen to each other made me optimistic that these diverse groups can come together to ensure that the health care industry as a whole succeeds under MACRA.
These groups have had formal business relationships for decades, but MACRA is challenging many of them to work together in different ways and to collectively solve problems. Along with changing the way stakeholders collaborate, the law also is changing the conversation, and that could help break down sometimes adversarial relationships. MACRA, for example, requires organizations to use data to report on physicians’ performance, gain insight into what can be done differently, and determine how to improve performance. Given those imperatives, stakeholders will need to work together to determine which group has access to certain types of data, or who has the most effective technology, or the most detailed insight into care patterns. However, many executives questioned how data sharing will happen and who should have and control access. Moreover, some of our attendees say collaboration can be hindered by organizational, competitive, and regulatory barriers.
Some organizations have been able to move past those barriers and begin to work collaboratively to tackle the challenges that come with the move to a value-based system. Here’s a glimpse into how some of the early collaborations among stakeholders are working:
Health plans and providers: Some health plans are already searching for provider groups that are willing to take on more risk in exchange for financial rewards. When a health plan has an existing relationship with a provider, renewed interest in risk-based contracts under MACRA may require the plan to restructure contractual roles and responsibilities. Getting an early start in these negotiations could help. Health plans might also need to monitor each provider’s operational strategies, as many could decide to consolidate, employ physicians, or launch new provider-sponsored plans in light of the demands they face under MACRA. One of the health plan participants said she is focused on finding providers who are excited about going to the next level. “When providers are embracing risk, it’s easier because we are on the same side. It’s not provider versus payer; you’re sitting on the same side of the table. Then we found that many doctors want to sell this partnership to employers and get more people in their network,” she explained.
Life science companies, health plans, and providers: Health plans and providers that enter into value-based contracts will likely need robust infrastructure to track individual patients, their treatments, and outcomes. Life sciences companies should consider focusing on the outcomes that are most important to the patient and the payer, and working with health plan and provider stakeholders to determine a definition of value that they can attribute to the drug therapy or device. One example is a demonstrated endpoint from clinical trials, an outcome that many provider organizations are actively measuring under quality initiatives.
We often say, the way Medicare goes, so goes the rest of the health care world. I think that is certain to be true with MACRA. But it might be even more powerful than that. MACRA is not just aligning the structure of payments, it is raising the bar to improve quality across the board. As lawmakers continue to debate what the US health care system should look like, many providers, health plans, medtech, and biopharma are embarking on a journey that has the potential to truly transform and improve it.