By Amol S. Navathe, MD, PhD,

After years of vigorous debate, our nation is in the throes of implementing large-scale health reform. The Affordable Care Act is intended to improve access, lower costs, and improve quality—or to at least make progress along these three dimensions. While the core of the health law is aimed at insurance market reform, there is also a focus on fostering a national innovation agenda. These initiatives included establishing the Center for Medicare and Medicaid Innovation (CMMI), whose mission is “innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care” for those individuals who receive Medicare, Medicaid, or Children’s Health Insurance Program (CHIP) benefits.

Congress gave the Secretary of Health and Human Services (HHS) the authority to scale a model after a formal evaluation without further legislation, including the option of testing nationwide. Patrick Conway, MD, MSc, is a pediatrician and health services researcher who has taken the helm of the Center for Clinical Standards and Quality (CCSQ) as well as CMMI, and serves as the Chief Medical Officer of the Centers for Medicare and Medicaid (CMS). I recently caught up with Dr. Conway, who provided a check-up on how health reform implementation is achieving higher quality and lower costs.

Innovation at CMS needs to occur across payment and delivery system programs. CMMI is our key component to advance along both of these dimensions but innovation must occur across the agency and we must engage external stakeholders in the process. I’ll highlight four of our major focuses of innovation. First, reforming payment and incentives in core payment programs—to provide an example, our program to reduce readmissions has already had positive impact. Recently, we reviewed the past 12 months of national data and found that 100,000 readmissions were averted. In prior years, our national Medicare readmission rate was hovering above 19% or one-fifth of admissions, and in the past year this has reduced to lower than 18%. For the system, and for patients, that is a dramatic improvement.

A second key area is the Pioneer Accountable Care Organization (ACO) program and the broader Medicare Shared Savings ACO program. We are excited about the more than 240 ACOs that are now in place nationwide—220 in the Medicare Shared Savings Program and 23 in the Pioneer program. First-year results from the Pioneer program showed modest shared savings between CMS and the providers, but on quality-of-care metrics, the Pioneer ACOs outperformed benchmarks on each of the 15 quality measures and all four of the patient experience measures.

Third, we have started preliminary work on innovation in delivery models for specialty care, including cardiology.

Finally, I will mention that we are proud of our state innovation models. These are 25 states that are trying to transform the state delivery systems, and doing so very inclusively by engaging payers and providers.

This is a great question as we expand how we think about this issue. Payment is a major lever, and in that arena the sea change is to pay for value instead of volume. Hospital Value Based Purchasing (HVBP) programs and End-Stage Renal Disease (ESRD) bundled payments plus quality bonuses (or pay for performance) are examples of programs in this area. In the case of ESRD cost reduction, these both have already demonstrated quality improvements. We think of payment as a catalyst for innovation, but we also have to support providers in transforming care delivery, and accordingly fund quality improvement (QI) work in all 50 states—a second lever. Our QI organizations and Partnerships for Patients work with over 80% of hospitals in the United States on hospital-acquired infections and readmissions.

A third lever is transparency, and to improve transparency around cost and quality. Programs in this category include our Hospital Compare website, which allows beneficiaries to look at the relative performance of hospitals. Included in this lever is our focus on enabling data to be used to drive delivery system transformation. Programs in this area focus on improving access to our data for researchers and folks interested in improving operations of the delivery system.

The fourth lever is to test new payment and delivery system models at the CMMI. We discussed some of the examples of delivery models programs earlier (like the Pioneer ACOs), but others include the comprehensive primary care initiative (a multi-payer initiative in seven markets) and bundled payments for acute and post-acute care. The Innovation Center is a huge opportunity to test new models and scale successful models.

At a high level, it aligns the incentives with better patient care, i.e., better health outcomes for patients at lower costs. From that perspective, as a practicing clinician myself (as a pediatric hospitalist), the policies we are implementing are very aligned with more efficient care, for example discharge planning to avoid a readmission. It is not only good for patients, but also financially rewarding.

At the next level down, programs like the physician value-based modifier, which adjusts payments to physicians for quality, is starting to impact more and more physicians in practice. The modifier was initially rolled out to physician groups of 100 doctors or more, but we are now proposing to include smaller groups. And the physician value-based modifier statute says we must adjust payments for all physicians by 2017.

In terms of ACOs, which are often driven by physicians, we already have more than 4 million aligned Medicare beneficiaries receiving care from ACOs.

I’ve been in this Innovation Center role for 2 months and it is clear that engagement is a key priority. Many of our quality and payment programs already touch cardiology in a big way. For example, in our bundled payment for care improvement programs, many of the included conditions are cardiac (such as acute myocardial infarction, PCI, and congestive heart failure). We also have a second round of innovation awards coming in which cardiology is a priority area—in particular new delivery models for cardiac care. We are certainly open to developing new models for specialty care and would listen carefully if cardiologists come forward with payment models they feel will fit cardiac care specifically.

We have had a couple of other initiatives that are worth mentioning. Million Hearts is a unique initiative that CMS and the Centers for Disease Control (CDC) co-launched in September 2011. The goal is to prevent one million heart attacks and strokes over 5 years through a focus on the “ABCS” of Aspirin, Blood pressure control, Cholesterol reduction, and Smoking cessation. The CDC is also working with communities for interventions to prevent heart attacks and strokes—collaborating with states and private sector entities to use convening power of the federal government.

Frankly, I think you need both technological and systems innovation—both will be important. We will continue to have innovative new devices and drugs that improve health. In the cardiology space we approved transaortic valve replacement—a great example of an important technological innovation—in less than 2 months. We need to be effective in coordinating with the cardiology community to look at evidence that helps us determine which populations benefit from which types of technologies.

For systems innovation, we have learned many lessons through cardiac care. We established many robust cardiology quality measures and we have been transparent about them, which we will continue to do going forward. This led to improved outcomes.

Overall, there is great opportunity for quality measures and systems to drive improvement; since I myself come from a QI background, this is an area in which I am confident of future progress.

We welcome this participation and believe it is critical that we engage the physician community effectively. Our formal avenues include requests for applications and comment periods. However, we also meet with specialty societies and experts. I think that this aspect is critically important. In general, we welcome greater engagement from the cardiology community including more tactical and detailed proposals for how we can do things better.

Amol S. Navathe, MD, PhD, is a physician at Brigham and Women’s Hospital, a clinical fellow at Harvard Medical School, and adjunct faculty member at the Leonard Davis Institute of Health Economics of the Wharton School of Business, University of Pennsylvania. Dr. Navathe is also the co-Editor-in-Chief of Health Care: The Journal of Delivery Science and Innovation.