Published on NJBIZ

Is the Affordable Care Act a success?

The answer can depend on one’s political affiliation, but the Centers for Medicare and Medicaid Services is already seeing a bend in the cost curve from alternative payment models.

It is important to follow the ideas being generated from CMS, which is the largest spender of health care dollars for most providers, because how a doctor or hospital gets reimbursed is going to eventually trickle down to patients in the future.

At least, that’s the goal, according to Sean Cavanaugh, deputy administrator and director of the Center for Medicare at CMS.

Accountable care organizations are just one of those options, and it takes a village, literally. The organizations, some of which are part of health systems in the state, include groups of doctors, hospitals and other health care providers that offer coordinated care for Medicare patients.

Though results of ACOs and other systems are just starting to come in, there is at least one encouraging statistic.

The Congressional Budget Office announced federal spending on major health care programs in 2020 will be $200 billion lower than predicted in 2010, according to a recent presentation by Cavanaugh.

He was the keynote speaker at an event hosted Wednesday by the New Jersey Health Care Quality Institute.

“What’s driven some of the cost savings and what has driven the ability to meet the alternative payment model targets? A big part of it has been the various ACO programs. In 2011, there was no such thing as an ACO, so people have been asking me if the program has been a success or not, I keep reminding them it’s only in its fourth year of existence,” Cavanaugh said. “There were questions (at the start) about whether or not providers truly wanted to transform the way in which they practice medicine.”

But ACOs are just one piece to the puzzle, since there are multiple options out there to try and bend the cost curve.

Since Medicare covers the majority of individuals most likely to enter a hospital — with predictions showing a steady increase in that age range in the future — CMS taking the lead on these changes, versus commercial health insurers, makes sense.

“The big question is going to be, is this all too much for providers? CMS is really pushing the envelope, they are really trying to pull everybody along, and are the incentives in there enough? Are the supports enough? Are we throwing too much at everybody too fast?” said Linda Schwimmer, CEO and president of the NJHCQI. “I think it’s a balance. But that can be very challenging for providers because if they are doing all this, that’s investment and time and resources on their end just to be part of a grand experiment. But when you look at the whole system, who are the people in the hospital the most, it’s people (ages) 65 and up, so that’s Medicare.”

Cavanaugh agreed, saying that, while providers are generating health savings for the system nationally, it does not fully offset the financial investments being made.

Ward Sanders, president of the New Jersey Association of Health Plans, summed it up well.

“It’s like laboratories in democracy. Some things work and some things don’t. You have government driving this as the biggest payer” of health care in the country, he said.

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Here are some other comments from panelists and attendees at the event:

“There’s a rule for long-term care in the ACOs, but no one wants to talk about them. That’s my take. They are part of the equation for post-acute. When you have knee and hip replacement, there are some savings you can extract for post-acute, but they don’t even talk about that. It’s always doctors and hospitals.” — John Indyk, vice president of the Health Care Association of New Jersey

“The devil is in the details with all of these things. Some things (work) and some things don’t, but you’ve got to try them. Some things work and then exhaust their lifespan and spawn something else, and that’s part of the evolutionary process. This is a transformation period; you are seeing a lot of growing pains. Hospitals are committed to the transformation and changes taking place and trying to stay away from exclusively focusing on care delivery and (instead) focusing on high quality care delivery.” — Sean Hopkins, senior vice president of federal relations and health economics at the New Jersey Hospital Association

“RWJBarnabas has done a lot in terms of alternative payment models, but ultimately we are really concerned with making sure the patient is healthy. You’ve heard Barry (Ostrowsky) say, and we are all charged with it, that we want to move into the social services realm. That is just another piece of this alternative payment under the umbrella of reform. We are building a greenhouse in Newark, and no one is reimbursing us for that. Some of the changes we are trying to implement, our return on investment is going to take a generation or two to see, so some of the programs we talk about definitely have a return on investment over 3-5 years, but there are others where we say, ‘If we help a baby learn how to eat better, or a family learn how to eat better, we are going to see the return on that investment in the next generation when they don’t come to our providers and our hopsitals with diabetes or diabetes-associated conditions.’” — Sarah Lechner, assistant vice president of policy development and government affairs at RWJBarnabas Health

“The biggest issue is the getting physicians to understand that the Affordable Care Act is here to stay, and they have to learn how to reformat their practice to meet the goals. I gave a lecture to residents last week on population health and what it means, and they really have no idea. They stayed another half-hour just to ask me questions. They really have no concept of what it takes to run a practice in the new world.” — Dr. Robert Remstein, vice president of accountable care at Capital Health

“There are opportunities for employers to save on health care costs, but there aren’t a lot of options out there (for small businesses). Because the 1-50s are kind of confined to the small employer market … I don’t know if it ties their hands to be innovative.” — Mary Beaumont, New Jersey Business and Industry Association