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Is the Move to a Value-Based Health-Care Delivery System Feasible?

A Conversation With Gail R. Wilensky, PhD


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Gail R. Wilensky, PhD

Gail R. Wilensky, PhD

In 2015, Congress passed the Medicare Access and CHIP Reauthorization ACT (MACRA), which aims to move Medicare toward reimbursement based more on outcomes and values, a goal, in theory, shared by the oncology community. To shed light on the complicated and problematic attempt to restructure the payment system, The ASCO Post recently spoke with noted health-policy expert, Gail R. Wilensky, PhD, who is an economist and senior fellow at Project HOPE, an international health foundation.

New Physician Payment Schedule

What is your position on this legislation toward a value-based system.

I had chaired the Medicare Payment Advisory Committee for its first 4 years in operation and had also chaired the Physician Payment Review Commission before Congress conflated those two predecessor commissions into one. I have been following what [the Medicare Payment Advisory Committee] recommends largely because I’ve been impressed with the tactfulness of the recommendations over the years.

I have also written about the urgency of moving away from the relative value scale and the [sustainable growth rate], which had been in place before the MACRA law was passed. In my opinion, the previous relative value and [sustainable growth rate] were based on collective guilt. By using aggregate spending that was adjusted and specified in the law, all physicians took a haircut on their fees and reimbursement, and not just those who were unusually aggressive in their billing or behaving in other ways that were considered undesirable.

Big data, as it is in other fields, could be part of the solution. I remain optimistic.
— Gail R. Wilensky, PhD

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I’m interested in how the rules for implementing the new physician payment schedule will roll out. When [the Medicare Payment Advisory Committee] began raising serious concerns about the MACRA provisions, I started having informal conversations with some of the commissioners about why they were making such harsh criticisms before the latest round of negotiations.

As you know, the commission meets in public, so the recommendations that were to be included in the March Report [which already went to Congress] were to be discussed publicly in their January session, one of which was to replace the Merit-based Incentive Payment System with a proposed program that would be less burdensome and more likely to improve quality. They formalized some of the concerns raised in the meeting in June 2017: namely whether or not the provisions, especially for physicians in fee for service, were particularly onerous and misguided as to make that portion of the bill undesirable.

Imperfect MACRA: A Move in a Better Direction?

The sustainable growth rate formula had long been a problematic instrument looming over the oncology payment system. Now that it has been eliminated by MACRA, what is the net benefit for the health system?

There are a couple of benefits. To begin, it allowed Congress to eliminate the artificial spending limit imposed by the [sustainable growth rate]. They had enacted the [sustainable growth rate] physician-spending limit only once in 2003 or 2004, but it caused a lot of distress among practicing physicians and Medicare recipients who were concerned about lack of access to their regular providers, obviously many of whom were patients with cancer.

To me, MACRA, although imperfect, was a move in a better direction. I am sympathetic to the concerns raised by the [Medicare Payment Advisory Committee], but I am not sure about the alternatives, such as the 2% withhold for all physicians not participating in an alternative payment model, such as an Oncology Care Model. This will be a good alternative for those groups that do not take full financial risk for both losses and gains. These physicians are eligible for the alternative payment model, and they receive a 5% bonus for participation for each of the years from 2019 through 2025.

The likelihood that Congress is going to pass new legislation that repeals what they’ve already passed before 2019 is about as close to zero as I care to think about.
— Gail R. Wilensky, PhD

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The problem arises either for groups that don’t want to assume downside risks, which is associated with losses—in other words, the risk of the actual return being below the expected return or the uncertainty about the magnitude of that difference. And the last bulk of groups that have signed up for accountable care organizations take only upside risks, which are arrangements in which providers who reduce health-care costs below their benchmarks receive a percentage of the difference between the actual and budgeted costs, which is known as shared savings. And then there are those practices that are outside any of the alternative payment models that are also in this category. The difficulty is that we don’t yet have an alternative that’s ready for prime time.

What I have suggested is that the Center for Medicare and Medicaid Innovation [which was created by Congress to allow Medicare and Medicaid programs to test models that improve value of care] should be directed to try out the [Medicare Payment Advisory Committee] proposal to see whether it actually works and whether it is more or less feasible for the Agency to turn information around as quickly, particularly because it involves what are called virtual groups; this approach takes patterns of clinical practice for a period of a year and forms what you think is a group. About 40% of clinicians are exempt from the program because they didn’t have enough Medicare interaction, and the Centers for Medicare & Medicaid Services created a minimal standard that can be met by reporting information on one quality measure.

Likelihood of Passage of Legislation

Given the atmosphere on Capitol Hill, is it realistic to think Congress will act?

Something needs to be done, but the likelihood that Congress is going to pass new legislation that repeals what they’ve already passed before 2019 is about as close to zero as I care to think about. Being able to pass any legislation other than what’s called “must pass legislation” such as a budget, is near impossible. That said, I could see a “rifle shot” piece of narrowly focused legislation being passed. That would give the Agency the authority to slow down the imposition of physician penalties for practice groups that are not yet ready for the Merit-based Incentive Payment System until a better methodology is developed.

Relieving Data-Collection Burden of Small Practices

The oncology community embraces the concept of value-based care, but busy community practices complain that data collection and reporting of quality measures are burdensome. Will MACRA add to this problem?

The advantage to what the [Medicare Payment Advisory Committee] is recommending is that it uses administrative data to assess the practice efficiency. If it can pull that off, and also the proposed “virtual group” idea, that would relieve the data-collection burden of small practices, which is one of its appealing factors.

A Slow Process

Health care is mind-bogglingly complicated. Drawing from the arc of your career, do you see a real possibility to cut through the political rhetoric and move our system to one based on value over quantity?

It is certainly a goal for a lot of players and groups in health care. It is possible that better use of administrative metadata could be a way to reduce the wasteful burden in the system. Moreover, markers in large data sets could be used to see whether we’re improving value and outcomes in particular groups of patients. It’s a slow process. I’m currently working on a proposal for a limited set of metrics so we can stop torturing clinicians. So big data, as it is in other fields, could be part of the solution. I remain optimistic. ■

DISCLOSURE: Dr. Wilensky reported no conflicts of interest.


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