Person-centered Health care Reform-Brookings

The answer to improving care and health while also reducing health care cost growth is Person-centered care. Reforms related provider payment, benefit design, regulation, health plan payment  are reuired. Such reforms could potentially result in $300 billion or more in net federal savings in the next decade, and provide a path to sustaining per capita cost growth that is much more in line with per capita growth in Gross domestic product (Gdp). after the proposed reforms are implemented in the coming decade, long-term savings from achieving better health and sustainable spending growth will exceed $1 trillion over 20 years. Our proposals can be scaled up or down, and can also be combined with other proposed reforms to achieve additional reductions in health care costs. Our approach enables congress to focus on overall cost, quality, and access goals that are very difficult to address under current law—so that whatever the spending level, that spending will do more for health.

these issues of health care quality and cost must
be addressed. if a clear framework like ours is not implemented, the alternative is likely to be continued reliance on short-term cost controls, including across- the-board cuts in payments like sequestration, or delays and restrictions in both needed coverage updates for vulnerable populations and new types of innovative care—perpetuating large gaps in quality of care.

Our proposals represent an alternative to such
care disruptions, cost-shifting, and threats to more innovative, person-focused care. We include proposals
for medicare, medicaid, and private health insurance.
We also propose a set of system-wide regulatory reforms and other initiatives, including antitrust and liability reforms. While some of these proposals are specific to particular programs and regulations, they are all grounded in our core goal of supporting quality care resulting in lower cost. this means a clear path for moving away from FFS payments and benefits and open-ended subsidies
for insurance plan choices toward a direct focus on supporting better care and lower costs at the person level. Our proposals encompass significant reforms—such as modifications in medicare payment mechanisms and

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Person-centered health care reform:
a framework for imProving care and slowing health care cost growth


benefits, and a change in the tax exclusion for employer- provided health insurance. the proposals reflect ideas that have gathered broad support in the past, but also include new approaches for addressing some of their shortcomings. implementing our reforms together enables them to reinforce each other and create much more momentum for improving care while bending the cost curve.

Reforms for Medicare

» transition to Medicare Comprehensive Care (mcc)

  • mcc organizations include collaborations of providers that receive a globally capitated, comprehensive payment for their attributed beneficiaries and must meet a set of care quality and outcome performance measures for full payment.
  • Structural requirements for these contractual organizations would be flexible; the organizations could include integrated systems or networks of providers working together.
  • providers would also be able to participate in mcc by accepting a case-based or bundled payment for their services and by meeting similar care quality and outcome performance standards for full payment.
  • the initial benchmark for the mcc comprehensive payment would be set based on current beneficiary spending and quality of care, and the spending target will be increased over time according to a statutory limit on per capita growth (Gdp plus 0 percent per capita). mcc providers would also be expected to sustain or improve quality of care over time, as reflected in increasingly sophisticated performance measures, facilitated by information systems used to support a beneficiary-level focus in care delivery.
  • providers can continue to receive traditional FFS payments, though those payments will likely continue to tighten over time and become

less optimal for covering the costs of delivering effective care.

  • Within 5 years, medicare should offer beneficiaries the opportunity to choose mcc providers to receive their care. in conjunction with this choice, mccs could offer beneficiaries incentives such as reductions in their medicare premiums and/or co-pays.
  • the mcc reforms would be phased in over 10 years with a set of milestones for measuring progress. By that time, we expect the vast majority of medicare beneficiaries to be treated by providers who are paid using mcc methods.» Reform medicare benefits to support more comprehensive care and lower costs
  • medicare benefits would be updated to have an out-of-pocket (OOp) maximum and reforms in co-pays and deductibles similar to proposals by
    the medicare payment advisory commission (medpac) and other expert groups. these reforms would lower beneficiary costs on average and provide more protection. medicare beneficiaries would also receive clear information about their OOp costs for different options for care.
  • medigap coverage would be reformed to eliminate “first dollar” coverage. this could be accomplished through a surcharge on medigap plans that have average co-pays higher than 10 percent based on their additional costs to medicare. medigap plans would be able to offer lower co-pays for high-value services and providers.
  • mccs could offer lower co-pays and premiums for medicare beneficiaries who choose to receive care from them.» Reform medicare advantage to promote high value health plan competition

• medicare advantage payment updates would be the same as for mcc plans—that is, equal to Gdp growth per capita, or less if overall medicare spending grows more slowly.

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Person-centered health care reform:
a framework for imProving care and slowing health care cost growth


• medicare advantage plans would be allowed to return the full difference between their bids and the benchmark to beneficiaries in the form of lower premiums.

» use medicare savings to create predictable payments in traditional medicare and support the transition to mcc

• Specific elements of our proposed medicare reforms would achieve over $200 billion in
gross federal savings in the coming decade. Our framework calls for redirecting these savings within the medicare program to support the transition to mcc models and provide a more predictable and sustainable long-term financing framework for medicare. this includes reforming medicare physician payment to replace the “sustainable growth rate” (SGR) with a payment system that increasingly includes elements of case-based payments, making similar changes in other FFS payment systems, and providing other incentives and support for the transition to mcc.

Reforms for Medicaid and Care for Vulnerable Populations

» current state medicaid waivers would transition to Person-Focused Medicaid, a standard process for states to implement medicaid reforms

  • the centers for medicare and medicaid Services (cmS) would implement a long-term, system- wide strategy for Person-Focused Medicaid that includes extensive support, monitoring, and evaluation. this systematic approach would replace negotiating one-off waivers with states.
  • this process would routinely track quality of
    care and per capita cost growth for medicaid beneficiaries. States that improve quality of care and reduce per capita beneficiary cost trends would keep a disproportionate share of the savings (for example, 50 percent of the federal savings in our simulations).

• States would be encouraged to combine funding streams and to support innovative, efficient strategies for care delivery for
both low-income uninsured populations and for dual-eligible beneficiaries.

» medicaid reforms would be aligned with other initiatives and financial support for health care for lower-income individuals to facilitate care continuity and improve efficiency

  • States and cmS would facilitate the participation of medicaid managed care plans in state insurance marketplaces to help mitigate shifts in and out of medicaid eligibility that disrupt both coverage and in how individuals receive their care.
  • cmS would facilitate state reforms that coordinate funding streams and the delivery of services across programs to assist lower-income individuals (e.g., local safety-net initiatives and supports for mental health, Federally Qualified Health centers, etc).

» cmS would make permanent and expand its “Financial alignment demonstration” for medicare- medicaid enrollees into a reformed program for Medicare-Medicaid Aligned Care. this permanent, person-focused program would enable the development of a strong and systematic ongoing support, performance measurement, and evaluation capacity to provide a stronger foundation for effective and efficient comprehensive care for medicare- medicaid beneficiaries (“dual-eligible” beneficiaries)

• this permanent program would include a substantial quality improvement and evaluation infrastructure at cmS. the infrastructure would: 1) provide timely access to readily usable medicare data on dual-eligible beneficiaries to the states
and their provider and health plan partners;
2) produce more meaningful and consistent measures of quality of care and costs for dual- eligible beneficiaries; and 3) share evidence and best practices with states on effective steps for improving care for dual-eligible beneficiaries.

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Person-centered health care reform:
a framework for imProving care and slowing health care cost growth


• performance measures would include increasingly meaningful measures of quality of care as well as combined per capita expenditures across medicare and medicaid. States that improve performance and reduce overall cost trends would receive at least a proportionate share of the total savings (medicare and medicaid). State reforms that do not improve quality while lowering costs would be phased out, with increasing incentives over time for states to switch to effective programs.

Reforms for Private Health Insurance Markets and Coverage

» limit the exclusion of employer-provided health insurance benefits from taxable income by imposing a cap that would grow at the same per-capita rate as federal subsidies in medicare and the insurance marketplaces

• a cap on the employer-provided health insurance subsidy would be phased in over time by capping the exclusion at a high level initially (e.g., at the 80th to 90th percentile plan) and then indexing the cap by Gdp growth once its subsidy value aligns more closely with other subsidy programs. this subsidy level would be designed to achieve significant health care savings from choosing lower-cost plans while still providing substantial incentives for employees to remain in employer- sponsored coverage.

» encourage and support employer leadership in driving innovative reforms in health care coverage and delivery

• Support employer efforts to engage employees in reducing overall health care costs through employment Retirement income Security act (eRiSa) and other health plan regulations that promote value-based insurance designs and tiered benefit designs, narrow networks of providers that demonstrate high performance, and employees’ ability to share in the savings

from health care choices and changes in behavior that reduce costs.

  • promote transparency by making standard measures of provider performance available from medicare and medicaid that could be more easily combined with similar measures constructed by employers from their own data on health care costs and quality.
  • Facilitate the adoption of payment reforms by providers in medicare and medicaid to match value-based payment reforms used by the private sector.
  • »  promote insurance market competition to support high-quality, lower-cost health plans, and that provides appropriate incentives for state regulation
    • implement regulations for the insurance marketplaces that allow flexibility in plan choices with actuarially equivalent benefit designs.
    • all options would be required to meet meaningful minimum requirements for essential benefits
      for creditable coverage, but given the disparities in covered benefits across states, offset state- specific subsidy growth that is attributable to increases in the impact of state-required benefits over time.
  • »  Facilitate stable non-group and small-group health insurance marketplaces by taking steps to reduce adverse selection and encourage broad participation for more affordable insurance
    • enhance participation through effective broad- based outreach and default enrollment for individuals who are eligible for subsidies.
    • limit open enrollment periods to one to two months per year.
    • impose limits on individuals’ ability to shift from a plan with relatively low actuarial value to higher value (for example, allowing movement from a “bronze” to a “silver” plan in terms of actuarial value during open enrollment, but not a “bronze” to a “gold” plan).

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Person-centered health care reform:
a framework for imProving care and slowing health care cost growth


• Relax the requirement for full community rating when consumers have not maintained continuous coverage and include late enrollment penalties (as in medicare part B and part d).

Reforms for System-Wide Efficiencies

» Simplify and standardize administrative requirements to support higher-value care

  • implement an updated standardized claim form.
  • promote standard methods for quality reporting by providers and plans, including clinical, outcome, and patient-level.
  • promote standard methods for timely data sharing by plans with health care providers and patients who are involved in our proposed financing reforms.
  • provide further support for state investments
    to update their medicaid information systems, including standard quality measure reporting and access to cmS data for quality improvement.» improve cost and quality transparency
  • implement consistent methods across providers and payers for constructing quality measures and for plans to provide relevant out-of-pocket cost information (a core set of common measures and conditions, at minimum).
  • Require plans, as a condition of participation in insurance exchanges, to provide a common set of cost and quality measures—at the plan—and provider-level.
  • Restrict “gag” clauses.
    » promote effective antitrust enforcement

• Require the ongoing production of a set of timely, comparable quality and cost measures at the level of major episodes of care and at the population level prior to integration and subsequently for clinical integration activities and mergers above

a reasonable market-share threshold of concern.

Failure to achieve improvements in quality and cost would be a foundation for subsequent antitrust action.

• update the antitrust enforcement framework to place greater emphasis on favoring clinical integration activities that are accompanied by financing reforms that move away from FFS payments and place providers at financial risk for quality gaps and higher costs.

» address outdated licensing barriers for more effective and efficient care

  • Reform scope of practice laws to allow all health professionals to practice at the top of their licenses and capabilities.
  • Remove barriers to telemedicine services caused by state-specific licensing restrictions to enable licensing reciprocity.
  • »  encourage states to develop more efficient medical liability systems
    • promote “safe harbor” or “rebuttable presumption” laws that establish legal protections for providers who achieve high quality and safety performance using valid measures.
    • promote reforms that modify the existing judicial process for resolving tort claims with lower-cost and more predictable alternatives (e.g., a “patient compensation System”).
  • »  enable states to implement system wide reforms
    • use common performance measures and
      the mcc payment reforms to create a more straightforward pathway for medicare to join
      in state-based financing reforms that have a “critical mass” of participants in a state including private plans, state/employee retiree plans, and medicaid plans.
    • provide enhanced opportunities for states to share in savings in medicaid and medicare that are generated as a result of state-led reforms affecting beneficiaries in these programs.


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