Healthcare Providers Must Innovate to Trim Costs

A top official from the Centers for Medicare and Medicaid Services (CMS) recommended that providers — including hospital executives — should research technology-driven changes in their systems with the goal of improving care and reducing costs.  “We need to decide now whether to make the commitment to adopt innovation that will fundamentally change the way we operate, change the way we deliver care, change the way we think about these organizations that we run,” Dr. Richard Gilfillan, acting director of the CMS’ Center for Medicare and Medicaid Innovation, said.  “This is not an abstract notion; this is a very concrete question that each of us will have to answer.”

Healthcare leaders who join in such an overhaul in their care delivery will likely find that the main obstacle is in changing how they are paid, Gilfillan said.  “We can ask people to keep folks from going back to the hospital, but if we pay health systems for putting more people in the hospital, we’ll get what we have today: a lot of hospital care,” he said.  Medicare will encourage private payers to change payment approaches by undertaking its own changes.  Specifically, Gilfillan said, once his office identifies payment practices that result in improved clinical outcomes and reduced spending, the HHS secretary will implement those throughout Medicare administratively.  “As you can see, this is a powerful tool for changing the way we deliver care,” Gilfillan said.

The large number of senior citizens covered by Medicare and low-income Americans covered by Medicaid suggests that any changes that serve those patients could soon be adopted throughout the system.  “The reality is that over the years, the private sector has by and large followed Medicare’s lead in payment systems,” Gilfillan said.  “Medicare has been the most innovative payer if you look back over the last 30 years.”  With $10 billion in funding through the end of 2019, Gilfillan anticipates rolling out additional initiatives before too long.  These could encompass ideas that emerge at an “innovation summit”.

Created by the Patient Protection and Affordable Care Act (ACA), the Innovation Center works to test and support innovative new healthcare models that reduce costs and strengthen the quality of care.  “The Affordable Care Act gives us tremendous new tools to innovate and improve our health care system,” said Health and Human Services Secretary Kathleen Sebelius.  “We discussed how we can work together to make innovative ideas a reality in communities across the country.”

“The level of real excitement surrounding this conference shows not only that people who know healthcare recognize the urgent need for better health and better care at lower cost, they also are ready to move forward with solutions,” said CMS Acting Administrator Marilyn Tavenner.  “The fact that all of these disparate interests share the aim of better healthcare and are willing to work for it not only means that we’re going to have the best ideas on the table, but also that we’re going to have the expertise and the resources that will ultimately ensure better health at a lower cost will be within the reach of every American,” Gilfillan said.

In the meantime, the Obama Administration also released a new report highlighting the success of the Center for Medicare and Medicaid Innovation.  The Center for Medicare and Medicaid Innovation’s role is limited to testing payment incentives and healthcare delivery methods within Medicare and Medicaid, as well as the Children’s Health Insurance Program.

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