Next year, the federal government will launch the Center for Medicare and Medicaid Innovation, a new department to oversee the portfolio of payment pilot projects called for under the Affordable Care Act. As part of its charge, the innovation center will develop and evaluate pilot projects for new and old payment ideas that include accountable care organizations, patient-centered medical homes, bundled payments, and capitated payments. Officials at the new center, one of the Centers for Medicare and Medicaid Services (CMS), will have the authority to extend or expand projects that show the potential to improve quality or cut costs.
Stuart Guterman, who studies payment policies for the Commonwealth Fund, explains the potential and the challenges for officials leading the new innovation center.
CLINICAL PSYCHIATRY NEWS: Why did lawmakers create this innovation center as part of the Affordable Care Act? Is it necessary?
Mr. Guterman: I think it is necessary. I think, in fact, it may turn out to be one of the most important provisions in the law. It focuses the attention of the CMS, which runs the two biggest health programs in the country, on the notion of innovation. It emphasizes the idea that we need to try new approaches to both payment and delivery of health care to get out off the path that we're on, which is leading to ever-growing health care costs and more pressure on the health care system.
We already spend 50% more than any other country in the world on health care. Everybody points to the amount of waste in the system. But it's harder to identify ways of actually getting rid of it and making the health care system work better for people. That's what this innovation center was intended to do--to focus the attention of the federal government on that issue and to bring in the other parts of the health care sector to collaborate on better ways of providing care and better ways of paying for care.
CPN: Some of the concepts--such as medical homes and capitated payments--have been tested before. What makes this effort different?
Mr. Guterman: Capitation was tried in the 1990s, but the world was a different place then. In the 1990s, we didn't have the kinds of measures of health system performance that we have now. Also, the notion of capitating payments so that you provided a strong incentive to reduce costs got separated from the notion of providing care in an effective, efficient way So we started out with a managed care movement that was focused on providing coordinated care for patients and we ended up with a movement that was focused primarily on reducing the costs, sometimes in arbitrary ways. …