Sean Cavanaugh is Deputy Administrator and Director of the Center for Medicare at the Centers for Medicare & Medicaid Services. He will be the keynote speaker at the Quality Institute’s Spring Board and Leadership Council on May 4. The topic is: The Move to Alternative Payment Models. Mr. Cavanaugh recently spoke to Symptoms & Cures.
We’ve seen great changes in health care during the past few years with the Affordable Care Act. Are you seeing the results you expected — and how can you measure the changes?
We’ve seen results that have both improved health care and lowered the growth in cost. In many different areas we’ve seen the rate of growth in Medicare spending per capita at historic lows — hovering from 2012 to this year from about zero to two percent. By historic standards that’s incredible. But we’ve seen more than just lowered cost growth. We’ve seen improvements in quality. There is a lot of evidence that this is happening. This is the promise of the Affordable Care Act. One in five hospitalized Medicare patients were re-admitted to the hospital within 30 days. We are getting those numbers down to about 18 percent. It’s being accomplished by doctors, nurses, and hospitals all working together and being supported by payment reform and transparency. We’ve targeted hospital-acquired conditions, such as central line infections, and we’ve seen reductions in these serious hospital-acquired conditions of up to 17 percent across over 3000 hospitals nationally. As we make improvements in many, many sectors we realize just how much more we can do. Yet overall I have to say that we are very pleased.
Are you concerned that alternative payment models that promote value-based health care may lead to too much market consolidation, increasing the potential for price increases?
Certainly we view market consolidation with a great deal of concern. We have been thinking very carefully about whether our policies are fueling consolidation. A lot of consolidation pre-dates the payment changes we proposed. And we disagree that it’s necessary to have mergers and consolidations to participate in alternative payment reforms. Care coordination and better care models are what’s needed and that can happen in ways that do not require mergers. We understand that mergers can lead to market consolidation that can allow providers to extract higher payments. We do not want to contribute to mergers among providers or payers.
We’ve seen a great deal of innovation accompany the Affordable Care Act. Which ACA innovations are working, in your opinion, and which are not?
We’ve reviewed and verified successes all over the map. One demonstration project out of the CMS Innovation Center, called Independence at Home, involves physician visits to frail, mostly elderly people living at home. These are people with frequent ER visits and hospitalizations. In the first year we’ve seen substantial savings as well as quality improvements. Congress wanted CMS to work more on prevention, and we want to work on that intelligently. Our actuary reviews show that one area where we also are reducing costs is the diabetes prevention program. Now we want to explore ways to expand access to diabetes prevention to more Medicare beneficiaries. We are pioneering other new models through our innovation center. The challenge is to take these small-to-medium-size pilots and obtain success on a much broader scale. We are on the right path.
Some of the very people who have personally benefited from the ACA are also outspoken critics of so-called Obamacare. Examples are plentiful. What’s your take on that?
The phrases Obamacare and the ACA have been bandied about and pilloried and the phrases poll poorly. But when you talk about the provisions of the laws people respond very favorably. The substance of the program is very popular.
Do we need to re-think the way we provide health care for people who are eligible for both Medicare and Medicaid?
Yes, absolutely. It is one of the great challenges before us as an agency and for the states and the health care delivery system. These are folks who tend to be high cost to the states and the federal government. These are people with high care needs. On paper they have generous benefits with both programs. But the programs are not designed to complement each other. People face difficulty navigating the bureaucratic rules. At CMS we have been working very hard on this question. We have innovations that we are exploring and we’ve seen some promising results. We now have a couple of hundred thousand people in demonstration projects. In Massachusetts we are seeing some interesting things. But we have a long way to go. Both clinically and programmatically this is one of the hardest areas — but also one of our top priorities.