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Why CMS should get in on payer, hospital quality partnerships to cut costs

Michigan's Value Partnership program focuses on procedural care, which accounts for more than 50 percent of national healthcare expenses, authors sai

Beth Jones Sanborn, Managing Editor

Innovative approaches to cutting costs and improving quality are essential to slashing the high cost of healthcare for Americans, and it just may be time to start partnering with payers on it. That's the view of two physicians and a registered nurse who authored a recent article in JAMA detailing the success of a Michigan program that is doing just that.

The Michigan program, known as the Value Partnership program, focuses on procedural care which is primarily comprised of surgical services. That genre of care accounts for more than 50 percent of national healthcare expenses, said authors physician Daryl Campbell, registered nurse Greta Krapohl and physician Michael Englesbe. 

The program is supported entirely by Blue Cross Blue Shield of Michigan and includes more than 3,000 surgeons practicing in 72 of Michigan's biggest hospitals. They attribute its success to several factors, but most importantly the physician-centric nature of the program. Physicians actually have substantial control over the quality metric design, priorities and leadership. They also push the philosophy that the goal is to improve care, not judge.

"Publicly shaming poor hospitals is not part of the approach," authors wrote.

Recognizing that physicians are motivated by their own sense of purpose, not just meeting performance targets, BCBSM agreed to make its support contingent only on statewide quality improvement, not the hospital or clinician performance. Thanks to this unique mindset, no hospital has dropped out of the program since its inception 12 years ago.

Finally, authors attribute the success of the program to system-wide support from surgeons and hospital executives alike. Because of this, they said, hospitals within the program have been able to form collaborative groups. Each group has its own procedural focus, such as bariatric surgery, joint replacement, cardiology or hysterectomy to name some of the focuses already at work.  These groups have enabled fast and effective sharing of best practices and specialist information. 

The Michigan Surgical Quality Collaborative involves general surgical and gynecological patients and the group evaluated more than 50,000 patients and found a reduction in overall complications from 13.1 percent to 10.5 percent over a five-year period. The reduction in complications yielded a $20 million dollar savings for hospitals and payers over that period, authors said. The same group developed a set of process measures to prevent surgical site infections after colon surgery. After evaluating compliance to those measures, results showed fewer infections and "dramatic reductions in cost."

"These encouraging results demonstrate that hospitals in a statewide collaborative can derive recommendations from locally obtained data, implement them, and show improvements in both processes and outcomes," authors wrote.

Four others states have similar initiatives and the program could go nationwide if CMS would partner with payers to help absorb some of the costs, authors wrote. First, to do so would help the agency's awareness of local methods of improving procedure quality and cutting costs, adding to its overall nationwide knowledge of such issues. Also, since the program is an all-payer model Medicare patients also benefit from the program, which authors said supports the assertion that CMS should pay a portion of the program's operational costs. 

Authors proposed that CMS could include physician collaborative quality initiative, or CQI, groups into MACRA part B payment requirements, as they are largely aligned with MACRA requirements already and would encourage physician engagement. Payments to payers could be made by giving tax credits to the insurer or allowing insurers to apply for CMS funding to start a value program.

"A partnership of CMS and private insurers might be a first, but it has much to recommend it," authors wrote.

Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com

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