It’s the Providers’ Turn to Make the Transformation
I just read Dr. Don Berwick’s speech at the IHI National Forum and I am awed with his insight and inspiration. It reminds me of the speech that I heard Dr. Ken Kaiser give at a Veterans Administration conference that led to the transformation of the VA health system from “worst to first” in the 1990s.
Dr. Berwick discusses how our nation is at a crossroads on health care where “choice is stark — chop or improve.” Everyone seems to agree that the political stalemate will continue during 2012 with the election and Supreme Court decision on health care reform. Experts expect paralysis until 2013 when real and substantial budget cuts will be unavoidable. Dr. Berwick is right that in the past the usual solution has been across the board cuts through budget reconciliation. Any cuts need to be thoughtful and support value improvement.
Dr. Berwick is hopeful that sensible solutions can be found by the provider community at the local level. He notes that government, payers and regulators cannot do what must be done. “Only people who give care can improve care.” He recommends six areas where providers can cut costs and improve value — overtreatment, failures of coordination, failures of reliability, administrative complexity, pricing failures, fraud and abuse. He estimates that waste in these areas could be $1 trillion a year or one-third of the total cost of production in the health care system.
But is the provider community ready and willing? There is evidence that this is happening. A recent Leavitt report concluded that there were 164 “ACO entities” forming in the country. AHIP reports that there are 30 ACOs and 150 patient centered medical homes. And CMS is developing initiatives in Medicare and Medicaid that will build on these private sector efforts. Other leaders are trying to inspire change that avoids across the board cuts. At the recent Politico Policy conference, Dr. Ken Thorpe reminded us all that the focus needs to be on the patients with chronic illness, which will require moving away from provider silos to provider cooperation. Policy discussions at a recent Alliance for Health Reform focused on the next steps after the failure of the Super Committee. Experts noted the fundamental differences in opinions between the Republicans and Democrats on health care policy. Several experts agreed that many in the provider community understand that business as usual will not be possible and that the “gig is up”. These providers are developing ACOs and medical homes and thinking about approaches to bundled payment. However it was noted that any savings from these initiatives will not be scored by CBO and that the timeline to implement these changes is longer than the Congressional budget schedule. One positive recommendation is that the CMS Innovation Center spend more time on the Hill while the providers in the community undertake the necessary transformation of the delivery system.