Is Value-Based Healthcare Here to Stay? Looking for Answers in New Policies

The final days of 2016 were fraught with uncertainty about what Congress and the new Trump Administration would do to the Affordable Care Act (ACA) and the healthcare regulatory landscape overall. So far, in 2017, we do not have much more clarity. Repeal, repeal and replace, repeal and delay, modify without repeal—there are now even more questions than answers and still no consensus Republican plan in sight. Yet healthcare executives would certainly appreciate some modicum of clarity, at least on the narrower topic of whether the shift to value-based healthcare models will continue under whatever new system is coming. This blog attempts to add clarity by analyzing what we know so far, as reflected in the limited actual evidence that is available.

Is Value-Based Healthcare Here to Stay? Looking for Answers in New Policies

I will do my best to describe where things may be going for value-based care (VBC) reform, as well as the analytic and other health information technology (HIT) systems required to support it, by analyzing the three key pieces of information we have so far:

  1. Enactment of the 21st Century Cures Act (Cures).
  2. Executive Order on reducing the “burden” of the ACA.
  3. Tom Price’s comments at his confirmation hearings.

#1: The 21st Century Cures Act

You may be wondering what Cures has to do with VBC. The fact is, this wide-ranging bill passed with almost universal bipartisan support. Taken together with the reality that value-based payment programs have historically enjoyed broad bipartisan support, the passage of Cures indicates that policies with bipartisan support will continue to move forward.

Why did Cures happen even though the ACA continues to be so politically contentious? Because the ACA brings into play some of the most entrenched ideologies of both parties—the involvement of the public versus the private sector in health insurance markets, entitlements, and entitlement reform. These are issues that are among the most contentious and partisan, while Cures is non-ideological, involving commonsense policies on accelerating drug discovery, helping providers and patients, and requiring information to flow more freely.

My observation is that the shift to value-based healthcare is similarly non-ideological, and will therefore fall in the category of continuing to enjoy bipartisan support, no matter what insurance mechanism is brought in to modify or replace the ACA.

#2: The Executive Order

On January 20, 2017, President Trump signed an Executive Order on “minimizing the economic burden” of the ACA. Widely viewed as mostly a symbolic act to show action on “repealing” the ACA, it asks the executive branch and HHS to (i) take steps to minimize the “burdens” of the ACA, and (ii) waive, defer, grant exemptions from, or delay provisions of the ACA.

But other provisions of the order tie these actions to giving states “more flexibility and control to create a more free and open healthcare market.” A subsequent provision also reiterates the concept of creating a free and open market for healthcare services. The principle of market innovation is therefore prominent in the Executive Order. This would imply promotion of innovative techniques and programs, including innovation in payment programs. Let’s continue to look at the evidence.

#3: Tom Price’s Comments

The top-of-the-fold headline on Trump’s pick to head HHS is that he is a staunch opponent of the ACA. The bottom-of-the-fold headline includes comments he made in his confirmation hearings on portions of the ACA that promote programs aimed at innovation in healthcare delivery and VBC. Notably, Price indicated that he supports in principle the activities of the Center for Medicare and Medicaid Innovation (CMMI), which was established by the ACA to test and promote innovative payment and delivery system models that have the potential to improve the quality of care.

While Price does not support all CMMI activities, he supports the mission of CMMI in principle, which is essentially a test bed for VBC programs. This provides another indication that these programs may continue to enjoy support in the Trump Administration with Price as Secretary of HHS.

Pulling the Threads Together to Evaluate the Status of Value-Based Healthcare

There is no doubt that this analysis still fits squarely in the category of “reading the tea leaves”—evidence of the shape of future healthcare reform is scant. But the evidence that exists appears to support the principles that are preconditions to value-based healthcare programs:

  • Bipartisan support: The success of Cures indicates that bipartisan cooperation will continue on key healthcare issues, notwithstanding the extreme ideological divide on market and entitlement related healthcare issues. Value-based payment programs have historically fallen into the non-ideological, bipartisan category.
  • Market-based innovation: The emerging evidence is that Congress and the Administration will support innovation in payment and delivery models, and flexibility in programs that will be included for participation in federal payment programs, which will flow through to commercial payment programs.
  • Support for Existing ACA Innovation programs: Although highly uncertain, there are some indications that not all of the ACA will be scrapped. And in this case, the innovative payment and delivery programs, which are on the non-ideological side, may be among those pieces of the ACA that will survive and be supported in some form.

Value-Based Healthcare and Payment Programs Are Likely Here to Stay

Looking at what has transpired to date in 2017 with the new Congress and Administration, it is a relatively safe bet that value-based healthcare delivery and payment programs will continue to be supported by federal law and regulation. It is also worth observing that, even without federal support, there is tremendous momentum for VBC in the private healthcare market.

Therefore, it appears likely that, whatever the ultimate shape that healthcare reform takes, value-based healthcare (and the infrastructure required to support it) is here to stay.

View Webinar on What New Policies Mean for Value-Based Healthcare

Dan Orenstein, General Counsel, Health Catalyst®, analyzes three key pieces of information to assess the future of value-based healthcare:

  • The 21st Century Cures Act
  • The Executive Order on reducing the “burden” of the Affordable Care Act
  • Tom Price’s comments at his confirmation hearings


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