The Future Of Delivery System Reform

Over the past several years, the federal government has put billions of dollars into a variety of programs aimed at improving the way health care is delivered. The Affordable Care Act (ACA) authorized a broad agenda of reform projects, including accountable care organizations (ACOs), bundled payments, value-based purchasing, primary care initiatives, and other payment and service delivery models. The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 established new ways of paying physicians intended to promote high-quality patient care.

What will happen to these initiatives under a Congress where Republicans are still seeking to enact major new health reforms and a president who could aggressively use authority granted by the ACA to make sweeping changes in Medicare and other health programs? Does this spell the end of delivery system reform, or could this be a new start with a greater potential to promote efficient and effective health care?

The prospect of ACA repeal has raised concerns among advocates, who argue that the enactment of Medicare-led efforts to promote higher-value care represents a real turning point in the battle to reduce waste and inefficiency. They fear that any reversal of the ACA framework would be a setback to the cause of lower costs and higher quality.

Those fears are overblown. There is bipartisan agreement on the goal of promoting more efficient and effective health care. MACRA, which is aimed at improving the value of physician services through payment changes, was enacted on a bipartisan basis. The debate is over the best way to accomplish the goal, not the goal itself.

We agree that it would be unwise to jettison entirely the delivery system reform provisions of the ACA, but their demise would not be the end of efforts to improve US health care. Rather, we see those provisions as far less consequential than their advocates claim, yet they can serve as departure points for putting in place more effective changes that provide room for private initiative and consumer preferences alongside changes in Medicare’s payment systems.

Delivery System Reform In Context

There is widespread agreement that the provision of health services in the United States suffers from high levels of waste and inefficiency. A 2012 report from the Institute of Medicine (IOM) estimated that about 30 percent of health spending was wasted on unnecessary services, excessive administrative costs, fraud, and other problems. Although the IOM stated that the US health system has become too complex and costly to continue business as usual, we are far from resolving these problems.

Despite numerous initiatives undertaken by providers and health care organizations to improve care coordination, the degree of fragmentation is striking. Redundancy and excessive use of services is common, as is lack of communication and data sharing among providers. In too many instances, the result is poor quality and high-cost care.

The goal of improved…

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