a bipartisan blueprint for improving our nation’s … · our nation’s health system performance...
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ABipartisanBlueprintforImprovingOurNation’sHealthSystemPerformanceFebruary 23, 2018 John W. Hickenlooper, Governor, State of Colorado John Kasich, Governor, State of Ohio Bill Walker, Governor, State of Alaska Tom Wolf, Governor, State of Pennsylvania Brian Sandoval, Governor, State of Nevada
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ABipartisanBlueprintforImprovingOurNation’sHealthSystemPerformance1
ABipartisanBlueprintforImprovingOurNation’sHealthSystemPerformance
February23,2018
Governorsacrossthecountryareleadingeffortstotransformtheirhealthcaresystemstoproducebetterhealthoutcomesatalowercosttogovernments,employersandindividuals.Statesplayakeyroleinhealthcaretransformationasmajorpurchasersofhealthcare,aschiefregulatorsandadministrators,andascatalystsforbringingtogetherdiversestakeholdersaroundasharedvisionforimprovingoverallhealthsystemperformance.Governorsunderstandthat,whilesomeissuesmaytemporarilydivideus,onmostissueswecanfindagreementandactforthegoodofourstatesandcountry.Thispaperrepresentsabipartisanapproachforimprovingournation’shealthsystemperformance,includingprinciplesandcorebeliefstoguidereform,aswellasspecificstrategiesthataddressthemosturgentproblemsinthecurrentsysteminwaysthatwebelievewillsustainbroadsupport.
GUIDINGPRINCIPLES• ImproveAffordability:Insurancereformsthatincreaseaccesstoquality,affordablehealthcare
coveragemustbecoupledwithreformsthataddressrisinghealthcarecostsacrossthehealthcaresystem.Insurancereformsshouldbedoneinamannerthatisconsistentwithsoundandsustainablecostcontrolpractices.
• RestoreStabilitytoInsuranceMarkets:Americanswithoutaccesstoemployer-sponsoredcoverageor
governmentplansneedtohaveaccesstoahealthy,stableandcompetitivemarketofinsurersfromwhichtochoose.
• ProvideStateFlexibilityandEncourageInnovation:Statescandevelopinnovativeapproachesthat
havethepotentialtostrengthenhealthinsuranceforallAmericans.Withinstandardsthatprotectthemostvulnerable,statesshouldhaveappropriateflexibilitytoimplementreformsinamannerthatisresponsivetolocalandregionalmarketconditions.
• ImprovetheRegulatoryEnvironment:Astheprincipalregulatorsofinsurance,statesareinthebest
positiontopromotecompetitionwithinstateinsurancemarkets.Federaleffortsshouldprovideappropriatestandardstoprotectconsumerswhilelimitingduplicativeorburdensomeregulationsandprovidingrelieftosmallbusinessownersandindividuals.
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COREBELIEFS• Wecanandmustachievemultiple,complementaryobjectives:protectionforall,accesstohighquality
care,andaffordable,sustainablecostsforconsumersandpayersovertime.Toooften,theseobjectivesareframedasoptionsinoppositiontoeachother:
− WecanensureAmericanshavehighqualityhealthcareorwecanreducecosts.− Wecaneitherbefiscallyresponsibleorbegenerousandhumane.− Wecanfosterindividualaccountabilityorwecansupportpeopleinneed.− Wecanembraceanationalvisionorwecanaddresstheneedsofeachmarket.
Werejectthesefalsechoices.Othersectorsoftheeconomyhavedeliveredgreateroutputatlowercostoverthelast30years.Weshouldexpectthesamehighperformanceandcontinuousimprovementfromourhealthcaresystem.
• Thebeststrategiestoimproveourhealthcaresystemaddressmultipleobjectivessimultaneously,reconcilecompetingpriorities,andholisticallyaddressourpresentandfutureneeds.
• Material,lastingimprovementtoourhealthcaresystemrequiresharnessingprivatesectorinnovationandcompetitiontothebenefitofall.Wheningenuityandcapitalarefocusedonwhatwemostvalue,weseeincredibleinnovationandproductivitygains.Enablingcompetitionrequiresalignmentoftheincentivesofallstakeholderswithwhatwevalue,sufficienttransparency,andappropriateregulation.Inourcurrenthealthcaresystem,providerscompetetoprovidemorecare,notnecessarilybettercare.Thismisalignmentofincentives,whichrewardsvolumeinsteadofvalue,isthemostsignificantroot-causechallengeinoursystemandaddressingitshouldbeourgreatestpriority.
• Targetedgovernmentactionisjustifiedandrequiredwhenmarketforces,alone,willnotachieveourobjectives,suchasprotectingvulnerableindividualswithouttheresourcestoindependentlysecurehealthcare.
• Reformmustaddresstheunderlyingdriversofcostsandcostincreases,includingthecurrentlackofvalue-basedcompetitioninourhealthcaredeliverysystem(e.g.,hospitals,medicalserviceproviders,andpharmaceuticals)andlifestyle-induceddisease.
• Ourexpectationsforourhealthcaresystemshouldbeconsistentnationally.Everycitizenineverypartofthecountrydeservesahighperformingsystem.Weneedasingle,holistic,integratedframeworktoimproveoursystemovertime.
Butwithinanationalframeworkonesizewillnotfitall.Manyaspectsofhealthcare,suchaspopulationcharacteristics,marketstructure,andvarianceinlocalgovernance(e.g.,tribalauthorities),differsignificantlyacrossmarkets.Theexecutionofanationalstrategywillnecessarilyvarybystateandregion.
• Itismorepracticalandlessriskytobuildfromtheelementsofoursystemthatarestable.Forexample,ourprimarycoverageandfinancingmechanisms–employersponsoredinsurance,Medicare,andMedicaid–areimperfectandwouldbenefitfromreform,buttheyarealsowellunderstoodandmuchmorestablethanisoftenbelieved.Thesemechanismsshouldbethefoundationofeffortstoexpandaffordablehealthcarecoverage.
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• Howwedeliverreformisfundamentaltoitspotentialsuccess.Lasting,highimpactreformmustbebipartisan,driventhroughaninclusive,transparentprocess,andnecessarilyinvolvecompromise.Tosustainreform,bothnationalpartiesmustfeelownershipforreformsandtheirsuccess–orfailure–overtime.
STRATEGIESFORIMPROVINGHEALTHSYSTEMPERFORMANCEPayers,providers,andconsumersknowthatwemustreorientourhealthcaresystemonvalue.Toachievethisgoal,wemustalignconsumerandproviderincentives,encouragemorecompetitionandinnovation,reforminsurancemarkets,expandprovenstateMedicaidinnovations,andmodernizethestateandfederalrelationship.
ReorientthesystemonvalueCoverageisimportant,andcoveragereformscanhelpcontaincosts,butournationneedstoconfronttheunderlyingmarketdynamicsthataredrivingunsustainableincreasesinthecostofcare.Withthesupportofthefederalgovernment,statesareresettingthebasicrulesofhealthcarecompetitiontopayprovidersbasedonthequality,notthequantityofcaretheygivepatients.Thisistrueinourstates,whereweareincreasingaccesstocomprehensiveprimarycareandreducingtheincentivesformedicalproviderstooverusemarginalorunnecessaryserviceswithinhighcostepisodesofcare.Reorientingthesystemonvalueneedstobeourgreatestpriority.CongressandtheAdministrationshouldworkwithstatesandmakeaclearcommitmenttovalue-basedhealthcarepurchasing.Keycomponents:• Measurethevaluedeliveredbyallhealthcareprovidersandpayersinawaythatisfair,technically
credible,andrelevanttopatientsandpurchasers;andmakethisinformationbroadlytransparenttoallpolicymakers,consumers,andstakeholders.
• Useinformationandincentivestodriveanevolutionofprimarycare,frombeingreactive,focusedonindividualencounters,andfragmented,toholisticcaredeliveredbycoordinatedteamsofcliniciansempoweredandaccountableforthehealthandcostofpopulationsovertime.
• Useinformationandincentivestoempowerandholdprovidersaccountablefortheend-to-endcostsandoutcomesforepisodesofcare.
• States“leadbyexample”usingMedicaidandstateemployeebenefits(andtoalesserextent,individualandsmallgroupmarkets)asacatalystforchange,toovercomeinertia,andachievecriticalmasstoreorientthesystemonvalueacrosspublicandprivatesectors.
• Federalgovernmentchampionsvalue-basedcareinfederalprograms(e.g.,Medicare,MACRAQualityPaymentProgram,FederalEmployeeBenefits)andthosejointly-administeredwiththestates,alignsprioritiesforvalue-basedpurchasingacrossallfederalagencies,andusesitsregulatorycapacitytosupportorpartnerwithstatesandtheprivatesector.
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AlignconsumerincentivesConsumersplayacriticalroleinthemedicaldecision-makingprocessandmakemultipledecisionsinthepathofcarethatultimatelyimpactthevalueofcaredelivered.Thefederalgovernmentandstatescanworktoalignconsumer-focusedincentivesandencouragethedevelopmentoftoolsthatprovideconsumerswiththeinformationtheyneedtocreatevalueinourhealthcaresystem.Keycomponents:• EnsurethatallAmericanshaveaccesstoappropriate,affordable,highqualitycoverageindependentof
theirhealth,age,gender,employmentstatus,orfinancialsituation.
• Builduponexistingfinancialincentivestoencourageconsumerstosecurecoverageandprepareforpotentialout-of-pocketexpenditures.
• EnsurethateachAmericanfinanciallycontributestotheirhealthcareconsistentwiththeirfinancialcapacity
• Encourageresponsiblechoicesbyempoweringconsumerswithusefulinformationandincentinghealthylifestylesandvalue-consciouscaredeliverydecisions.
• Encouragethecreationofnewtechnologiesandtoolsthatwillallowconsumerstocreatevalue-basedhealthcaredecisions.
EncouragemorecompetitionandinnovationOverthepasttwodecades,therehasbeentremendousconsolidationamonghealthcareproviders.Consolidatedprovidersystemscanresistthekindofcompetitionandinnovationthathascreatedefficienciesandbenefitedconsumersinothersectors.TheFederalandStategovernmentsmustensurethatmarketcompetitionisfocusedondrivingbetterpatientoutcomes,increasingefficiency,anddecreasingcosts.Keycomponents:• Encourageinnovation(includingcost-reducinginnovation)inbusiness,technology,andworkforce
models.
• Directlycombatanti-competitivebehavior,particularlyamonglocalhospitalsystems,pharmacybenefitsmanagers,andpharmaceuticalcompanies.
• Requiregreatersharingofhealthcaredataofalltypesacrossentities.
• Systematicallyreviewandrationalizefederalandstateregulationthatmayinhibitinnovationandcompetition(e.g.,credentialing,clinicaltrials,andprescriptiondrugimportregulations).
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ReforminsurancemarketsMostAmericanscurrentlyhaveaccesstoastablesourceofhealthinsurancecoveragethroughtheiremployer,orfrompublicprograms,likeMedicareandMedicaid.Risingcostsareaconcernthroughoutthesystem,butthevolatilityoftheindividualmarketmoreimmediatelythreatenscoveragefor22millionAmericans.Werecommendbuildingonthestrengthsofthecurrentsystem,andtakingimmediateactiontostabilizetheindividualmarket.Keycomponents:• Encouragemoreconsumerstoparticipateinplansthatareavailabletothemeitherthoughtheir
employerorothermarkets(e.g.,ERISAplansatlargeemployers,smallgroupplans,MedicareAdvantage,individualmarket).
• Ensurelowerincomeconsumershaveaccesstoqualitycoveragebymaximizingallavailableoptions(e.g.,financialassistance,expandingMedicaid),whileavoidingperverseincentives.
• BuildontheAugust30,2017,bipartisangovernor’srecommendationstostrengthenournation’sindividualhealthinsurancemarkets:
− ReinstituteCostSharingReductionPayments,− Maximizecarrierparticipation(e.g.,byexemptingcarrierswhoofferplansinunderservedareas
fromthefederalhealthinsurancetaxinthoseareas),− Maximizeconsumerparticipation(e.g.,byincreasingoutreachtohealthierindividuals,andfixing
thefamilyglitch),− Promoteappropriateenrollment(e.g.,byverifyingspecialenrollmentperiodqualifications).− Stabilizeriskpools(e.g.,viariskadjustments,reinsurance,andrisksharing),and− Reducecostthroughcoverageredesignandpaymentinnovation(e.g.,bygrantingstatesmore
flexibilityinchoosingreferenceplansforessentialhealthbenefits).
ExpandprovenstateMedicaidinnovationsStateshavetakentheleadinpromotingvalueintheirMedicaidsystems.Manystatesareworkingtomoveawayfromvolume-driven,fee-for-servicetovalue-basedpaymentsandcarecoordination.FederalandstategovernmentsshouldrecognizeandreplicatethesuccessfultrackrecordofselectstatestoincreasequalityandlowercostsinstateMedicaidprograms.Keycomponents:
• Defineandscalevalue-basedcareandpaymentmodels(e.g.,integrationofphysicalandbehavioralhealth,comprehensiveprimarycare,episodesofcare).
• Investinstate-basedtransitionstonewvalue-basedmodelsofcarethathavethepotentialtoreducepercapitaMedicaidspendingovertime.
• IncorporatesocialdeterminantsofhealthintoMedicaid.
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• Measureandincenthealthandcriticalsocialoutcomes(e.g.,reducingpoverty,increasingemployment,reducingcriminalrecidivism).
• ManageMedicaidrisk-adjustedcostperperson,overtime,belownationalmedicalinflation.
• Usebestpracticevendormanagementtoextractmeaningfulvaluefromthirdparties(e.g.,managedcarecompanies,ITvendors).
• ProvideasmoothtransitionfromMedicaidtotheindividualmarket(backandforth)whilereducingchurnbetweenthetwo.
ModernizethestateandfederalrelationshipStatescanpursuemanyhealthcarereformswithoutfederalassistance.However,insomecasesstatesareconstrainedbyfederallawandregulationfrombeingtrulyinnovative.WeurgeCongressandfederalagenciestoworkwithstatestoovercometheseconstraints.Keycomponents:• Inpartnershipwithstates,theFederalgovernmentshouldfocusondefiningandprotectingareal
"minimum"standard,or"floor,”forhealthcaresystemsineverystatethatmaintainscoverage,increasesvalue,andprotectsconsumers,whileaffordingstatesbroadindependenceabovethatfloor.
• Federalgovernmenttoprovideleadershipwhereanationalapproachismostefficient(e.g.,regulationofpharmaceuticals,airambulances).
• Fullyaligngovernanceandincentivesinprogramssharedamongstatesandfederalgovernment(e.g.,dual-eligiblemembers).
• Explicitlyrecognizesuccessfulstateinnovationsinvalue-basedcare(e.g.,viatheStateInnovationModelprogram)andsupportotherstatesinreplicatingthosesuccesses(e.g.,resources,expeditedwaivers)whilealigningMedicareasmuchaspossible.
• Streamlineadministrativeprocesses(e.g.,waiverrequests)tobeeasier,faster,moreconsistent,andmorepredictable.
JohnW.Hickenlooper,GovernorStateofColorado
JohnKasich,GovernorStateofOhio
BillWalker,GovernorStateofAlaska
TomWolf,GovernorStateofPennsylvania
BrianSandoval,GovernorStateofNevada