Innovation is driving a significant amount of change in the healthcare industry, said Patrick Conway, deputy administrator for Innovation and Quality and Chief Medical Officer at the Centers for Medicare and Medicaid services.
The onus is on providers to take action or fall behind, Conway said Tuesday during a HIMSS15 discussion on the results of CMS innovation program.
"We are shifting the culture of how people think about healthcare investments, in a good way," Conway said.
According to Conway, CMS programs that focus on alternative payment models such as accountable care organizations, which currently serve eight million people, and population health, are moving a fragmented system tied to fee-for-service into a future in which costs are controlled and care is improved.
"We're trying to use a number of levers to get there," Conway said. These include programs such as meaningful use and the Medicare Shared Savings accountable care model.
For example, Conway said the Pioneer ACO model realized more that $384 million in savings in the second year, while comprehensive primary care initiatives are leading physician practices to operate in new ways.
Even safety measures dictated by CMS have seen good results, Conway said. The industry has seen a 17-percent reduction in patient harm events from 2010 to 2013, saving $12 billion.
Other innovation is happening at the state level too. In Minnesota, providers are making major investments in community health by setting up accountable health communities, something Conway said is leading the CMS to think about community-level ACO models.
Meanwhile, Maryland is having a lot of success in testing population-based payments for hospitals, he said, and other states are interested in following them.
"In the next five years they're going to have more than 80 percent of their payments to hospitals be population-based payments," he said. "That means the way they are financially successful is they keep people healthy and out of the hospital."
CMS has already said it wants to ramp up the percentage of payments that are value-based over the next few years. Specifically, it wants 50-percent of Medicare payments tied to value by 2018.
Ultimately, all providers should be chasing the kind of innovation CMS is testing, either by engaging in accountable care, investing in quality infrastructure, focusing on data and performance transparency and pursuing improved health outcomes.
"If we find better ways to deliver care, pay providers and distribute info we can spend our dollars more wisely and have healthier communities, a healthier economy and a healthier country," he said.