Trump election puts future of value-based care in doubt
The future of value-based care initiatives is now in doubt as a result of the surprising victory of President-elect Donald Trump, and with Republicans retaining control of both the House and the Senate in 2016 elections.
Given that they now control the legislative process, Republicans may act on promises to repeal the Affordable Care Act. Many value-based care initiatives came into being as a result of the ACA, so it’s unclear which, if any, of the nascent efforts to study new reimbursement mechanisms will survive any efforts to scale back the 6-year-old ACA.
In particular, Republicans have formally expressed concern about the way in which demonstration projects of untested value-based care approaches have been implemented by federal agencies, saying they don’t take into account providers’ practice and offer no safeguards to protect providers from financial penalties.
Observers say even though politicians have been polarized along party lines on the ACA, there has been bipartisan support for efforts to change the way in which healthcare is reimbursed. Value-based care seeks to change the dynamics of reimbursement, so that providers aren’t rewarded for the quantity of services they provide, but rather the benefits they bring to the overall health and well-being of patients.
Valued-based initiatives include approaches such as bundled payments and accountable care organizations. Federal agencies responsible for monitoring spending on healthcare have high expectations that a combination of value-based initiatives can restrain growth in healthcare expenditures.
With the ACA at risk under a Trump presidency, that breeds uncertainty for value-based care initiatives. Congress may take a bigger hand in revising the philosophy by which healthcare spending cuts are achieved, which may diminish efforts to use value-based care approaches.
A Trump presidency might result in changes in which new initiatives are used, says Eric Cragun, who leads the health policy team of Advisory Board, a consultancy that closely follows healthcare issues. Cragun sees bipartisan support for VBC initiatives, and believes that it “is one healthcare trend likely to continue.”
Blair Childs of Premier says that the transition away from pay-for-volume to pay-for-value may continue under a Trump presidency, but with a Republican majority in Congress, the pace of change may vary.
That momentum for value-based care had been building under the current leadership of the Department of Health and Human Services, notes Jeff Smith, vice president of public policy for AMIA, an organization for healthcare informatics professionals. However, with the change in administration, Trump will have a free hand in putting new officials in place at HHS, which could completely change its approach to healthcare reform.
“Over the last year, we’ve seen a heightened degree of urgency at CMS to test and deploy new value-based care models,” Smith notes. “This is due, in part, to the ending of the Obama administration. HHS Secretary Sylvia Burwell has been adamant that her primary objective regarding delivery reform is to get ‘points on the board,’ which is to say that delivery reform is not going to be accomplished by a few big changes, but several small ones.”
Early value-based care efforts have shown mixed results. For example, of 32 original participants in the Pioneer Accountable Care Organizations which formed the initial group in 2012, only nine remain, as a result of financial losses from participating in the original approach. The Centers for Medicare and Medicaid Services has brought out new iterations of the ACO program to fine-tune the model and encourage the development of new ACOs.
In another value-based demonstration project, the Centers for Medicare and Medicaid Services in March kicked off a program to give bundled payments to providers for hip and knee replacements. The federal Bundled Payments for Care Improvement initiative (BPCI) is composed of four broadly defined care models, which bundle payments for multiple services beneficiaries receive during an episode of care. Under the initiative, organizations enter into payment arrangements that include financial and performance accountability for an entire episode, with the hope that the models will lead to higher quality and more coordinated care for beneficiaries at a lower cost to Medicare.
However, even as federal agencies try to test out new approaches, Trump may agree with GOP lawmakers who have expressed concern about the pace of change and the ability of agencies to require participation in demonstration projects.
For example, in September, 178 members of Congress signed a letter questioning the authority of the Center for Medicare and Medicaid Innovation (CMMI) to require participation in value-based demonstration projects.
CMMI is tasked with testing and evaluating voluntary healthcare payment and service delivery models, but the letter contends that, by requiring providers to participate in value-based programs, the demonstration requires participation by more than 800 hospitals in 67 geographic regions.
“I think some of the pushback from Congress is in reaction to the quickened pace, especially at the CMMI,” AMIA’s Smith says.
“A Trump presidency might lead those lawmakers and new staff at CMS to reduce CMMI’s role as a payment reform facilitator and rely more on Congress to drive new payment models forward,” says Cragun of Advisory Board. As a result, the pace of change for value-based care initiatives, and the requirements for participation by providers, will probably need to be reset, observers say.
Despite the struggles of early approaches to value-based care, both parties are expected to continue to support ongoing experimentation with the new models; in fact, radical changes in programs, such as the threatened push for repeal of the ACA by Republicans, are not likely to succeed, says Childs of Premier.
“One thing that exists under any scenario is the high level of government deficit and debt,” Childs says. “With the aging population, huge expenditures by government in healthcare programs and rising healthcare spending, efforts to move our system from volume to value will continue, including all of the payment and delivery system changes that have been underway for the past 15 years.”
Childs and Smith both predict resistance will rise to drastic changes in federal strategy; neither believes that the ACA will be repealed.
“A sweeping change to the direction of ACA would create billions of dollars in churn,” Smith says. “Nearly one-fifth of our economy touches healthcare spending, and a change in direction, such as repealing ACA, would require a recalibration of nearly seven years of private-sector compliance. The cost to private industry to change direction would be staggering and, in all likelihood, would do little to impact the cost curve of healthcare spending.”