Live From HIMSS17: Former CMS Administrators Slavitt, McClellan on the Future of Value-Based Care Reform Efforts

Feb. 21, 2017
During a fireside chat session at HIMSS17 Monday afternoon, former CMS Administrators Andy Slavitt and Mark McClellan, M.D., Ph.D., shared their perspectives on the path ahead for healthcare reform and health policy, and the health IT industry’s role in moving healthcare forward.

During a fireside chat session at HIMSS17 Monday afternoon, former Centers for Medicare & Medicaid (CMS) Administrators Andy Slavitt and Mark McClellan, M.D., Ph.D., shared their perspectives on the path ahead for healthcare reform and health policy, and the health IT industry’s role in moving healthcare forward. While they both acknowledged that there continues to be a great deal of uncertainty and challenges ahead, Slavitt, who served as CMS’ acting administrator under the Obama Administration from March 2015 until just last month, and McClellan, who served as CMS Administrator from 2004 to 2006 under President George W. Bush, both agreed that the value-based care reforms are “here to stay.”

John Kansky, CEO and president of the Indiana Health Information Exchange, moderated the discussion and asked the two former CMS administrators about their thoughts about a current hot-button issue: what will happen with healthcare reform under President Donald Trump, especially given his stated intentions to repeal and replace the Affordable Care Act (ACA)?

“There is a lot of pressure to get a repeal vote, and that could mean a lot of different things,” Slavitt said, adding that he thinks a repeal vote is more likely in the House of Representatives, yet he added that a repeal vote passing in the Senate is not as definite. “The country has moved far forward, such as with expanding Medicaid and if you repeal the ACA, you don’t just repeal the policy, you repeal the money and replacing that is very hard.”

He continued, “Hospitals that have built their lives around expansion will be very challenged. There is a lot of debate, and then coming into this, we have a new CMS administrator and a new Secretary [of Health and Human Services], and they have their own views. The main point is, people said on Nov. 9th and Nov. 10th, we will definitely have repeal, but it’s not so definite anymore and there’s an opportunity for people to be heard.”

McClellan, now the director of the Duke Robert J. Margolis, Center for Health Policy in Durham, North Carolina, said, “There is a lot of debate about how this will move forward. The Republicans have been running very consistently around a repeal platform and that didn’t come out of nowhere, it came out of fundamental issues. This is the lead issue, what the role of federal government should be, and philosophy on the size and activity of government. I agree with Andy, and I don’t know what easy and straight forward repeal legislation would look like. If I were to put money on it, the odds are still pretty good that some legislation will be passed by Congress and signed by the President that will say at the top, ‘repeal and replace,’ but what exactly the content underneath that is, is less clear. It’s going to take time to sort that out.”

“This issue is going to be with us for a while,” McClellan said, regarding the ongoing discussions about healthcare reform and repealing, replacing or reforming of the ACA. However, he added that there is an opportunity for healthcare leaders to engage in the discussions to help find a way to address some of the concerns and issues that some in the industry have about the ACA. “Republicans did have some important concerns about this. Our spending on healthcare programs, at the federal level, are very high and growing,” he said.

Kansky also asked for the panelists’ views on President Trump’s nomination for CMS Administrator, Seema Verma, who has yet to be confirmed.

“She is a very smart person. If the focus is on state-based innovation, she’s the person you bring on board. She’ll want to do productive things,” Slavitt said.

McClellan said he wrote a letter in support of her confirmation. Further, he said, “In addition to people they will bring on in the next days, weeks and months, there is a tremendous amount of capacity in the existing CMS career staff. There has been some turnover, but there are a lot of really good people who have been through different administrations and are committed to the mission of the agency. There will be continued momentum on reforms.”

Both Slavitt and McClellan agreed that, politically speaking, bipartisan work on healthcare reform and healthcare policy was needed and would be in the best interest of the healthcare system.

“We both agree that we can’t go through another cycle where one party owns it and the other party pokes holes in it. Getting both parties to the table is a recipe for success. How we get there is going to be tricky. We’ve got some entrenched sides here,” Slavitt said, adding, “But I’m optimistic. When you get out of Washington, I find that people don’t want to answer the question, do they like Obamacare? Do they like Trump? They are more interested in the question, what makes sense for improving healthcare? The big question is, can you get the politics away from this issue and focus on improvement?”

The Future of Value-Based Care

There has been significant work in the healthcare industry to implement value-based payment models and some healthcare organizations have made significant investments in this area, Kansky said, and he questioned both Slavitt and McClellan for their insights about where value-based care was headed.

“The value-based care reforms are here to stay,” McClellan replied, noting there are many factors driving the transition from fee-for-service to value-based payment, including the increasing focus on improving quality and reducing costs. Additionally, care management and care coordination “increasingly requires targeting a complex range of interventions that are not traditional healthcare that are a part of achieving quality care at lower cost.”  However, he did predict that value-based care and payment initiatives might take a different direction under the new Administration, such as more work through Medicare Advantage and more state-based efforts.

“Reform has been on the provider side so far, but the new models of care that providers are trying to implement require new efforts to make them sustainable, and a lot of these ideas applied to providers, such as shared savings, could, in theory, work on consumers too,” he said.

Slavitt noted that the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) legislation passed Congress with bipartisan support. “There will be new progress. What’s the shape of that progress and how aggressive is that progress? I think the one good way to think about health system reform is to consider different parts of the country are in different places and different parts of the journey—those out in front, those in the middle and those just beginning the journey,” he said.

“In the middle, where a lot of people are right now, and where a lot people get stuck, the best tool right now is mandatory bundles,” Slavitt said, noting that bundled payments allow hospitals to work with the post-acute community. “Price [HHS Secretary Tom Price] could back that off a bit,” Slavitt commented, referring to the new HHS Secretary nominated by President Trump and recently confirmed.

For organizations just starting the journey, he said, “The real question is, how do you move that 50 to 60 percent of communities, the rural providers, the small practices, get them their flavor of this. That’s just beginning, MACRA is the beginning of that. It will happen, slowly, carefully, those organizations don’t have the same set of resources. And, there is an opportunity for the health IT industry to make it easier for that to happen.”

Kansky then posed the question, “If you’re a hospital CEO or managing director of a physician practice and you are steering investments to prepare for value-based care, do you need to freeze or pull back from that investment?”

Slavitt replied, “Only if there is repeal.”

McClellan remarked,” The chance of just repeal legislation without some replacement is unlikely.”

To which Slavitt said, “I think if you repeal, unless you have something to slide in there, something slipped into [a reconciliation bill], unless you already have that wired in, the replacements are pretty slim.”

For hospitals investing in value-based payment models, funding will get tight, McClellan asserted, yet he said that for organizations that are making reforms and succeeding, it’s time to redouble those efforts. He added, “You might want to take a closer look at what we are learning about organizations dealing with the ‘one foot in each canoe’ problem with a culture focused on value and achieving better results at lower cost for all patients. It’s challenging, but it’s not impossible and there are a lot of examples of organizations succeeding with that now.”

Interoperability, and the Role of the Health IT Industry

On the issue of health IT, Kansky also raised the question of how much time the CMS Administrator is able to think about data and health IT.

“For me, quite a bit,” Slavitt replied, noting that CMS created the first Chief Data Officer position while he headed the agency. “I would say, for CMS today, the information we provide is equally important to how we make payments.”

McClellan said the private health IT sector and health IT innovators have been “critical for CMS progress and data systems.”

On the issue of moving data across the care continuum, Kansky asked both panelists about their perspectives on the role on non-government players, such as vendors, payers, and HIEs, to move data.

McClellan noted that the Office of the National Coordinator for Health IT has tried to increase focus on use cases and ways in which critical information is needed for valuable healthcare functions, such as managing patients and avoiding medication errors, and “that all requires data to flow.” He mentioned ONC’s Interoperability Roadmap, yet he also believes there is an opportunity and a need for more private sector leadership “to turn use case concepts into real practical results.”

Slavitt asserted there is a great deal of frustration among healthcare providers about technology and the lack of interoperability. “Primary care physicians, when asked about technology they use, they hate it. Because it’s not speeding up their lives, and, even further, they think it’s purposeful. With other technology they use, they get productivity and usefulness out of it. They think someone is purposefully screwing things up and I think they are right,” he said. According to Slavitt, CMS played a part by creating regulatory hurdles. “We reduced those regulations down, and planted the seeds to make the regulations flexible, to give the IT industry a little bit of a roadmap to talk to clients and design around their needs,” he said.

Slavitt also leveled a fair share of criticism on healthcare provider organizations. “I think the industry is still doing two things—it’s siloing data and everybody who is siloing data needs to be called out for that. It’s for business model reasons, not for technical reasons. And, the products are still not doing what physicians and patients find useful and valuable. That has to happen.”

Finally, Kansky asked Slavitt and McClellan about the feedback they have heard from providers and technology companies during their tenures at CMS and the feedback they’d like to share with audience members.

Regarding the ongoing political disagreements about the future of the ACA, McClellan asserted that healthcare leaders should look at the big picture. “We are making some meaningful progress in changing the way that we pay, so organizations that horde the data to maximize billing and revenues, that’s not a good long-term business model. We’re making progress in identifying what does work and the sustaining financial models for them and that’s increasingly good business opportunities. You don’t have to support meaningful sharing of data because you think it’s the right thing to do, but there is a sustainable business model there." He added, "Don’t get too caught up on the politics in the moment, the more fundamental trends will still be there.”

Focusing on where technology is headed, Slavitt said open APIs will “change the game” for healthcare providers. “As soon as you can build APIS to pull data out of a system, the game is going to change and you should be able to start innovating. The system that captures your data is not necessarily the system you have to work in. You will be able to capture information and take it out and put it back in in a secure way.”

Slavitt also called out health IT vendors. “[The health IT industry] is not satisfying its customers…The vast majority don’t like technology they are using. There’s an enormous opportunity to use the new openness to make things better.”

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