Let’s do something; let’s innovate!

Innovating Care for Medicare Beneficiaries: Time for Riskier Bets and Embracing Failure

By Ashish K. Jha
JAMA Forum, March 4, 2015

Of all the pressing challenges in the US health care system, lack of innovation in delivery may be the most important.

This lack of innovation in how we do things is a major reason why health care productivity has been so low and high spending has had insufficient benefits for patients.

A major premise of the Affordable Care Act (ACA) was that it would spur new models of care delivery. The architects of the ACA understood that old models of care delivery impeded gains in productivity, made it difficult to improve patient outcomes, and made the health care delivery system inefficient. In response, the ACA established the Center for Medicare and Medicaid Innovation (CMMI), which is responsible for changing how we deliver health care. The ACA provides CMMI with $1 billion per year for 10 years, much larger than the budgets of the Agency for Healthcare Research and Quality and the Patient-Centered Outcomes Research Institute, 2 entities that have gotten far more attention. Will CMMI achieve the meaningful new models of care delivery that our health care system needs? It is unclear, but there is reason for concern.

A Mixed Picture

Four and a half years after launch, CMMI appears to have funded 36 new programs, of which we have evaluations for 9. Nearly all the evaluations are positive, although careful examination of the reports paints a far more mixed picture. Most programs are having minimal effects, on the margins.

For example, the Comprehensive Primary Care Initiative, across 6 states, seems to have a monthly savings of $14 dollars (2% of total Parts A and B spending) per patient, compared with controls, a savings that actually turns negative when the costs of the program are included. The effects on quality are minimal, as well.

Betting on Nontraditional Players

Foremost, CMMI needs to make meaningful bets on nontraditional players—such as startups and small delivery organizations—that are trying to fundamentally upend health care delivery. Next, focusing on organizations that are using technology in radically different ways, employing nontraditional personnel to facilitate care, and targeting new locations for care delivery would also be helpful. Focusing on nonincumbents and taking risks with nontraditional care models would pay much bigger dividends than the marginal savings that current programs are likely to generate.

But they would come at a cost: a high failure rate. Advocates of the current CMMI approach would argue that such failures are unpalatable, given the current political environment. Although that is surely true, the broader health care community must give CMMI the space to fail. Even the talented, highly capable people running CMMI can’t have success rates much higher than those seen in Silicon Valley, where comparably smart investors are using their own money to make bets. But, if they are willing to be risky—and willing to fail—they can have a profound effect on the way health care is delivered. And that will be an investment worth making.


Market-Based Solutions to Antitrust Threats — The Rejection of the Partners Settlement

By Regina E. Herzlinger, D.B.A., Barak D. Richman, J.D., Ph.D., and Kevin A. Schulman, M.D.
The New England Journal of Medicine, March 4, 2015

Health care consumers won a significant victory when Massachusetts Suffolk County Superior Court Judge Janet Sanders blocked a settlement that would have allowed Partners HealthCare, the system that dominates the Boston area, to acquire three additional health care providers in eastern Massachusetts. Sanders concluded that the acquisitions “would cement Partners' already strong position in the health care market and give it the ability, because of this market muscle, to exact higher prices from insurers for the services its providers render.”

If this decision is not overturned on appeal, consumers will now be spared those projected price increases. But there is an even bigger reason for New Englanders to celebrate the judge's ruling. The danger lay not only in Partners' expanded dominance but also in the degree to which the settlement would have shut out other innovative competitors.

Health care delivery does not rely on fixed assets whose returns should be guaranteed. Rather, it relies on services and interactions between caring clinicians and patients in need. This concept is lost when public policy focuses on regulating returns on invested capital rather than on promoting the provision of high-quality, innovative, efficient clinical services. Innovative, low-cost competitors to most hospital services could abound — for example, telemedicine providers and community-based urgent care centers. Such innovations may represent the public's best hope for sustainable health care. But the proposed settlement could have squashed opportunities for innovation, since it conceded Partners' dominance and tried only to contain it.

We need policies that challenge expansions and preserve competition, not those that assist the dominant player. We have our own list: encouraging payment reform that rewards quality and cost-effectiveness; liberalizing scope-of-practice regulations, licensing rules, and other prohibitions to allow more efficient use of human resources; ensuring that professional regulations, state boundaries, and FDA rules do not impede telemedicine and digital products that enable mobile health management; and refining antikickback rules and reimbursement restrictions to enable providers to pursue creative, integrated ventures that could revolutionize the delivery of care. And there is much that attorneys general can do to promote such innovation-oriented policies.

Instead of focusing solely on regulating dominant hospital systems, policymakers should also pursue strategies that can foster real competition and innovation in the price, accessibility, and quality of care.



By Don McCanne, MD

Where would this world be without the sage advice of some of the great thinkers of the past and present?

  • “Don’t just stand there. Do something!”
  • “Don’t accept the status quo. Innovate!”
  • “Don’t regulate. Allow markets freedom to compete!”

Thank goodness that these have been our guiding principles in health care for the past century so that now we have the highest quality health care system and the lowest costs, that is except for all of the other nations that have placed a priority on public policies over private innovation.

We still haven’t learned. We are spending billions of taxpayer dollars on just doing something… anything. The CMMI innovations that we have funded have had, at best, only minimal benefits at the margin. In fact, the savings have turned negative when the costs of the programs are included. Worse, the effects on quality have been negligible as well. In these efforts, we’re spending more and buying nothing.

Yet we continue to allow the clarion call for innovation and competition to drown out the message of reform that would finally include absolutely all of us in a high-performance health care delivery system that finally would be truly affordable. Of course, that reform would be a single payer national health program. Our immediate task is to make our clarion call drown out theirs. As it is now, our is hardly a peep. (Think not? Google innovation in health care - 377 million results - and single payer health care - 2 million results.)