May 2016, Vol. 5, No. 4

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Panel Examines Effects of Healthcare Policy in an Election Year

Kavita Patel, MD, MSHS; Marc Samuels, JD, MPH

National Comprehensive Cancer Network

Panel Examines Effects of Healthcare Policy in an Election YearThe chances for further policy in healthcare during an election year are minimal, said panelists during a roundtable discussion at the National Comprehensive Cancer Network 21st Annual Conference. The exception may be the Medicare Part B demonstration project for provider reimbursement for infused and injected drugs.

Moderators of the panel were Kavita Patel, MD, MSHS, Nonresident Senior Fellow, Brookings Institution, and Marc Samuels, JD, MPH, Founder and CEO, ADVI.

Panel Examines Effects of Healthcare Policy in an Election Year“The actual substance of what will happen over the next several years, I think will be fairly constrained within…a set of boundaries that won’t allow necessarily for really significant policy change but will stimulate some important change in a few targeted areas,” said Lanhee J. Chen, PhD, Research Fellow, Hoover Institution. Most issues with respect to healthcare will be viewed through the lens of cost.

One question that policy makers may be willing to tackle is whether bureaucratic organizations are ready to handle the innovation coming out of the health sector, said Dr Chen.

Payment changes under the Affordable Care Act (ACA) are encouraging more collaboration in healthcare delivery, said Elizabeth J. Fowler, PhD, JD, Vice President, Global Health Policy, Johnson & Johnson. “You’re starting to see different players in the healthcare system work together in ways that we haven’t ever seen before,” she said. Missing pieces are data sharing across the different stakeholders in the healthcare system, including industry, providers, and patients.

Payment reforms under consideration are “various forms of capitation,” such as bundled payments, said Scott Gottlieb, MD, Resident Fellow, American Enterprise Institute. “Those are terribly flawed models…swapping one bad payment system for another bad payment system, and doctors are going to be given an inordinate number of incentives to try to clamp down on costs and use of technology,” he said.

Consolidation in the delivery system, much of which is driven by payment reform, is another concern for Dr Gottlieb, and “will be very hard to unwind.” In effect, local healthcare monopolies are being created by such consolidation, which may ultimately reduce competition and drive up prices and reduce physician productivity.

Narrowed provider networks and narrow drug formularies, leaving consumers underinsured for drugs, may soon become a market standard and are another concern, he said.

The Pace of Innovation: Does CMMI Foster or Hinder It?

The Center for Medicare & Medicaid Innovation (CMMI), as established in the ACA, ensures the role of government in driving innovation, but should the government’s role be as a driver of innovation, Dr Chen asked.

“The idea behind CMMI was to put money into a system to test ideas in the private sector,” said Dr Fowler. “What innovations are out there that Medicare ought to be looking at, and if it works in Medicare, maybe we ought to think about expanding it? It was supposed to be more of a feedback loop.”

Because healthcare is a local endeavor with the characteristics being different in different areas, an innovation that works in one area of the country may not be successful in a different area, said Dr Gottlieb, who argued that CMMI may actually be hindering innovation. “It would seem to me that this is an opportune time for private capital to come into the market to consolidate physicians as an alternative to doctors selling their practices to hospitals, yet there is no capital coming into the market to do it,” he said.

Part B Payments

Boutique issues, such as drug pricing, within healthcare are more likely to become issues in an election year as opposed to general policy, said Dr Chen. “I’m one of those who think that this Medicare Part B demo will be a campaign issue…what is the appropriate role for government in setting payment policy in influencing the kind of care and routines of care and episodes of care,” he asked.

The sweet spot in payment innovation has eluded lawmakers, said Cybele Bjorklund, MHS, Distinguished Visitor/Senior Fellow, Georgetown University, Washington, DC. Capitation may incentivize undertreatment, whereas fee for service can induce overtreatment, and “right sizing” these incentives will be challenging.

The Part B demo is an aggressive play to propose payment reform nationally and is potentially an overreach, she said. At the same time, the average sales price (ASP) system for Part B drug payment is not good policy, including ASP+6 and any changes to this formula.

“I think this is a chance to fundamentally rethink how we pay for Part B drugs, and maybe move it into a different kind of schema…rather than just how we change or tinker with the existing rule, or change the percentage,” said Dr Gottlieb.

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