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Finance Committee Explores Progress in ACA Delivery Reforms

May 25, 2012—The Senate Finance Committee May 23 held a hearing titled “Progress in Health Care Delivery: Innovations from the Field” to examine delivery reforms and innovations, particularly the public and private sector partnerships coming out of the Center for Medicare and Medicaid Innovation Center (CMMI), such as Pioneer Accountable Care Organizations (ACOs), in which many AAMC members are participating [see Washington Highlights, Dec. 22, 2011 and Washington Highlights, May 11].

Finance Committee Chair Max Baucus (D-Mont.) opened the hearing saying, “Medicare and private payers are together sending one message to providers: From now on, we will pay for quality, not quantity. It is a message that providers have already begun to hear and respond to. Starting in October, Medicare will start paying hospitals more money when they produce better results for patients. Hospitals that produce poor outcomes will get less money.”

Agreeing that the current system does not reward health care providers with the right incentives, Ranking Member Orrin Hatch (R-Utah) said, “[O]ur fee-for-service system provides little financial incentive to manage care properly. Instead, the incentive is to increase the volume of services.” However, he emphasizes that these new innovations are happening in the private sector, not Medicare or Medicaid, saying, “Increasingly, it is private payers — on behalf of employers — who pressure providers to reduce costs, providing better care and better health outcomes.”

Lee Sacks, M.D., chief medical officer, Advocate Health Care, Oak Brook, Ill.,  testified how Advocate Physician Partners (APP) saves money and provides quality care through  an “innovative and collaborative partnership” with their physicians with a “focus on prevention, the early detection and treatment of diseases and the coordination of care across the continuum.” He said APP has a “pay-for-performance program [that] has grown to include 159 measures in five domains, including clinical effectiveness, efficiency, patient safety and patient experience. The number of measures has grown by adding measures for physicians in specific specialties, measures which align physician and hospital outcomes goals and measures requested by private payers and employers. The Program’s use of a single consistent set of measures and goals across all payers is an ideal approach to facilitate participation by physicians.”

Marc Malloy, president and CEO, Renaissance Medical Management Company, Wayne, Penn., testified that Renaissance, also a Pioneer ACO, uses partnerships as a way to reduce cost. He said,  “[W]e have entered into new discussions with hospitals and payers alike to establish high performance networks, which is to say, hospitals and physicians aligned in ways to collaborate on providing the best care at the lowest costs. We believe that these smaller but higher performing networks of providers will provide a basis for new products and services for the consumer market, and the health insurance exchange.”

The Senate Health, Education, Labor, and Pensions (HELP) Committee held a hearing to explore the progress of similar delivery reforms on May 16 [see Washington Highlights, May 18].


Len Marquez
Director, Government Relations
Telephone: 202-862-6281


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