The failed debate about repeal and replacement of the Affordable Care Act centered largely on issues of insurance coverage and access to medical care, bringing a lot of attention to questions surrounding access to healthcare services.

As efforts failed to replace the ACA, attention now is turning to what should be done to bend the cost curve of healthcare and the future of some of the value initiatives that the ACA spawned. The future of these initiatives has implications for the types of healthcare information technology that healthcare organizations should implement in the near future.

With the demise of the repeal and replace movement, the rising cost of healthcare constitutes a challenge for both sides of the aisle in Congress. While it is clear that value-based care constitutes the best hope for bending the nation’s healthcare cost curve, not all the delivery reforms are equally attractive for healthcare IT investment.

The focus on coverage and access that surfaced during the repeal and replace debate—while certainly salient—has avoided the elephant in the room, namely the issue of the nation’s escalating healthcare costs, which will rise 5.4 percent and reach $3.5 trillion in 2017, 18.3 percent of U.S. gross domestic product (GDP) and equal to almost $11,000 per person.

Furthermore, nominal national health expenditures (not adjusted for inflation) are projected to grow at an average annual rate of 5.6 percent from 2016 to 2025, almost 1.5 times the rate of nominal GDP growth over the same period of time. As a result, healthcare costs are projected to reach a staggering 20 percent of U.S. GDP in 2025.

With the stalled ACA repeal and replace effort in the U.S. Congress, there is a chance of a return to a traditional bipartisan approach to healthcare reform that should hopefully remove any lingering sense of uncertainty about the future of value-based care that was created by the repeal and replace movement, even though neither the House-passed American Health Care Act nor any of the bills floated by Senate Republican leadership proposed any changes to the ACA’s value-based care initiatives.

With the demise of the repeal and replace movement, the rising cost of healthcare constitutes a challenge for both sides of the aisle in Congress. While it is clear that value-based care constitutes the best hope for bending the nation’s healthcare cost curve, not all the delivery reforms are equally attractive for healthcare IT investment.

The ACA mandated five major healthcare delivery reforms promoting value-based care:

  • The Hospital Value-Based Purchasing (VBP) Program
  • The Hospital-Acquired Condition Reduction Program (HACRP)
  • The Medicare Shared Savings Program (MSSP) and other accountable care organization models
  • The national pilot program for payment bundling
  • The Hospital Readmissions Reduction Program (HRRP)

Also, the ACA provided funding of $10 billion over 10 years for the Center for Medicare and Medicaid Innovation (CMMI), which was tasked with testing and evaluating various payment and service delivery models involving, in most cases, voluntary provider participation, with only a few models being mandatory.

HHS Secretary Tom Price has been critical of the CMMI in general and has opposed all mandatory value-based care programs, specifically the Comprehensive Care for Joint Replacement Model and the Cardiac Rehabilitation Incentive Payment Model, so changes to those two programs and a general trimming of the CMMI’s sails can be expected.

Nevertheless, because of the cost issue, the value-based care movement should continue to enjoy bipartisan support in Congress and support within HHS.

Based on results to date and recent moves by the Centers for Medicare and Medicaid Services (CMS), the five aforementioned ACA healthcare delivery reforms rank as follows for attractiveness of healthcare IT focus.

  1. Accountable care organizations. The ACO concept continues to be the leading, potentially most impactful delivery reform, with more than 560 Medicare ACOs in 2017, strong growth in the aggressive Next Generation ACO Model (more than doubling its number of participants from 2016 to 2017), popularity with commercial health plans, and alignment with the Medicare Access and CHIP Reauthorization Act, which was passed with overwhelming bipartisan majorities by both houses of Congress.
  2. Hospital-acquired conditions. The HACRP seems to be making a positive impact. From 2011 through 2015, there was a 21 percent decline in the rate of hospital-acquired conditions (HACs), approximately 125,000 fewer patients died as a result of HACs than would have died under the 2010 rate of occurrence of these conditions, and more than $28 billion in healthcare costs were avoided.
  3. Hospital readmissions. This is another area where progress has been made. According to CMS, hospital readmission rates dropped by an average of 8 percent nationally from 2010 to 2015. The number of avoidable 30-day readmissions of Medicare patients dropped in 49 states and the District of Columbia. The HRRP became effective in October 2012, and both its financial impact and number of applicable conditions have increased in recent years.
  4. Bundled payments. In September 2016, CMS’ voluntary Bundled Payments for Care Improvement initiative reported mixed results for its first year, with modest decreases in Medicare episode payments for certain clinical episode groups, some instances of quality declines, and very limited instances of improved quality.
  5. Hospital value-based purchasing. This is the delivery reform that appears to have the least momentum and the most number of questions. A study of the first three years of VBP found no evidence that the program had led to better patient outcomes in terms of 30-day, risk-adjusted mortality rates for acute myocardial infarction, heart failure and pneumonia—the program’s only outcomes measures.

In any scenario, continuation of some or all of these programs bodes well for continued HIT investment and innovation to support the nation’s caregivers.

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