Veta Health | July 2018
It is no secret that healthcare is shifting from volume to value. CMS initially projected to shift 90% of Medicare payments to value and 50% of payments to alternative payment models by 2018. There have been adjustments since 2013, when the initial five-year plans emerged and projections were made. Programs have been delayed or rolled back, including Bundled Payment Programs and adjustments have been made with regards to voluntary and mandatory participation in a number of initiatives, but it is a continuous iterative process to achieve the ideal high value care models, while cutting costs.

State of Medicare & Medicaid 2018
As it stands, federal spending on healthcare in the US is expected to reach over $1 trillion this year, primarily driven by Medicare and Medicaid expenses, with alignment of patient needs and utilized services still imbalanced—hence why we need to keep the forward inertia to achieve success in value-driven reform.

When we look back through 2018, there has been a large focus from CMS on reform in state and federal programs focused on accountability and transparency. State spending on Medicaid alone, from 1985 to 2016 has increased significantly from 10 to 30%, and patient health hasn’t improved in the same linear pattern. Spending increases are more justifiable when patients have access to and are receiving high-value services that meet their health needs, but this alignment has fallen short. As a result, CMS spent 2017 focusing on quality measure development and improvement efforts in meaningful areas to better understand the differences between populations when measuring quality improvement efforts, detailed in the 2018 Quality Measures Report.

A major proposal that came from CMS in 2018 included changes to mandatory bundled payments, including delaying cardiac and orthopaedic bundles while moving towards expansion of voluntary bundles, with the goal of cutting wasted spending out of the system. There are a number of variables that factor into success in value-driven payment models, by collecting quality measures, analyzing the impact of certain geographic, social, and economic factors, to name a few change will prevail.

This summer, CMS announced initiatives to improve the Medicaid program through greater transparency and accountability, strengthened data, and innovative and robust analytic tools. In the initiative announcement CMS administrator Seema Verma stated that the “initiatives released today are essential to help strengthen and preserve the foundation of the program for the millions of Americans who depend on Medicaid’s safety net.” In addition, CMS would like to consolidate several Medicare quality programs in an effort to identify the highest performing organization and have them scale their efforts under a contract that may amount $25 billion. This cross-industry effort would bring together hospitals, clinicians, and long-term facilities to reduce hospitalizations, readmissions, and poor outcomes by establishing contractors that would undertake rapid national, state, and local level quality improvement.

Collaborative Progress
It’s important we look to the states, who have significant influence over their regional markets and play a critical role as leaders in the national shift towards value. With these recent changes to Medicaid and CHIP, states have the authority to require MCOs to implement value-based payment arrangements but differ in their approach due to differences in CMS initiatives, state budget challenges, and personal interests in healthcare innovation. Currently, more than 30 states have invested in value-based payment strategies.

Looking forward, it is vital that CMS continues to emphasize program integrity at both the federal and state level, to ensure Medicaid provides high-quality care for our vulnerable populations. They have already allocated nearly $5.4 billion to implement 37 payment models that use value-based methods to reimburse providers. An internal review found that CMS is currently meeting goals related to decreasing healthcare costs, promoting better health, and accelerating the implementation of new models in the recent years, and we hope this additional funding multiplies the achievement of these universal goals.

Digital health will play a vital role in reform by meeting multiple goals efficiently across the healthcare continuum—increasing patient engagement and coordination of provider teams—supporting more efficient care delivery models that can be continuously analyzed through advanced data and analytics for population health. This integration of data and analytics, combined with payer, provider, and patient interest in technology, will help achieve improvement, putting patient priority over paperwork and driving access to the right care.