Is HHS’ Proposal to Scale Back Mandatory Bundled Payments a Step Back from Value-Based Care? Many Healthcare Experts Say No | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Is HHS’ Proposal to Scale Back Mandatory Bundled Payments a Step Back from Value-Based Care? Many Healthcare Experts Say No

August 18, 2017
by Heather Landi
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Some healthcare experts say HHS's proposal to cancel mandatory bundled payment programs will not slow down the drive to value-based payment models, and it's time for healthcare providers to get on board
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Last Thursday, the Department of Health and Human Services (HHS) posted a rule title that proposed eliminating mandatory bundled payment programs in several areas of healthcare including cardiac care and joint replacement. The Centers for Medicare and Medicaid (CMS) then followed up that rule posting with a press release Tuesday that provided more details regarding its proposal to change the Comprehensive Care for Joint Replacement Model and cancel the mandatory Episode Payment Models and Cardiac Rehabilitation Incentive payment model.

The proposed rule would cancel the mandatory bundled payment programs for heart attacks and bypass surgeries as well as expansion of the existing Comprehensive Care for Joint Replacement model (CJR) to include surgical treatments for hip and femur fractures. CMS officials said the proposed rule aims to provide “greater flexibility and choice for hospitals in orthopedic care for Medicare beneficiaries.”

As background, back in July 2016, during the administration of former President Barack Obama, HHS announced the introduction of a mandatory bundled payment for care for heart attacks and for cardiac bypass surgery and an extension of the existing bundled payment model for hip replacements to other hip surgeries. HHS announced the mandatory bundled payments for total hip and knee replacement procedures, which was imposed on providers in 67 metropolitan statistical areas (MSAs), in November 2015.

These bundled payment models for cardiac care, in addition to the extension of the existing bundled payment model for hip replacements to other hip surgeries, were perceived as a major step in forcing reimbursement forward into value-based purchasing.

Now, with this latest proposed from CMS under the Trump Administration, the agency is proposing to reduce the number of mandatory geographic areas participating in the Center for Medicare and Medicaid Innovation’s (Innovation Center) CJR model from 67 to 34. In addition, CMS proposes to allow CJR participants in the 33 remaining areas to participate on a voluntary basis. In this rule, CMS also proposes to make participation in the CJR model voluntary for all low volume and rural hospitals in all of the CJR geographic areas.

CMS also is proposing through this rule to cancel the Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) incentive payment model, which were scheduled to begin on January 1, 2018. “Eliminating these models would give CMS greater flexibility to design and test innovations that will improve quality and care coordination across the in-patient and post-acute-care spectrum,” CMS said in a press release.

Moving forward, CMS says it expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory episode payment model efforts. “The changes in the proposed rule would allow the agency to engage providers in future voluntary efforts, including additional voluntary episode-based payment models,” CMS said.

Some healthcare organizations immediately voiced concerns that the proposal from HHS, under Secretary Tom Price, M.D., signals that CMS is taking its foot off the accelerator when it comes to pushing providers to move to advanced alternative payment models (APMs).

Blair Childs, senior vice president of public affairs for Premier Inc., said in a statement,” While we appreciate CMS making an effort to address stakeholder concerns about large-scale mandatory models, we are disappointed with the proposal to cancel EPM and CR models without offering alternatives to replace them. We believe CMS needs to be a strong leader and create more incentives for providers to move to advanced alternative payment models, including bundled payment. We hope that the promise for a future program that builds on the Bundled Payments for Care Improvement (BPCI) program is quickly followed up on with a fuller, specific proposal. These new models are essential for providers to earn the five percent physician payment bonuses under the MACRA Quality Payment Program (QPP).” 

What’s more, Childs said, “Members of Premier have been steadfast advocates in favor of moving away from the perverse incentives in Medicare’s micro-managing fee-for-service system in favor of more accountable, coordinated alternative care models. Through 15 years of experience, we know these models improve quality, reduce costs and enhance the overall care experience. We hope to work with CMS to continue to advance APMs and bundled payment’s uptake in the market.”

However, many in the industry say the proposed changes and cancellations are not surprising given that Secretary Price, and even CMS Administrator Seema Verma, have voiced skepticism about mandatory bundled payment programs. As previously reported by Healthcare Informatics, last fall, when Price still served as a Congressman from Georgia, he was one of 200 federal lawmakers who sent a letter to Andy Slavitt, acting administrator for CMS, calling out CMMI for overstepping its authority by proposing mandatory healthcare payment and service delivery models. In the letter, the legislators state that the proposals would negatively impact patients. "We ask that your cease all current and future planned mandatory initiatives under the CMMI,” the legislators wrote. Verma, during her first Senate confirmation hearing back in February, also voiced similar thoughts about mandatory bundled payment programs.

“I’m frankly not surprised by it; it’s been relatively consistent with what Sec. Price and others have been advocating for in terms of their lack of interest in any mandatory program,” Chris Garcia, CEO of Remedy Partners, a Darien, CT-based software and services company that helps hospitals and physicians with bundled payment programs, says. “They question the authority that CMMI has in terms of being able to take demonstrations for projects and turn them into permanent payment policy. I don’t think anybody questions the need for innovation and the work that CMMI is doing is nothing short of outstanding, but to be able to make that permanent, I think they, they meaning the legislators, want more say in those things before they ever move into a permanent payment policy.”

Michael Abrams, co-founder and managing partner of St. Louis-based consulting firm Numerof and Associates, also says he was not surprised with the proposal to eliminate mandatory payment models. “Secretary Price has made clear his feelings about this mandatory program being driven by CMS. He has said that he feels that they were overly intrusive in hospital operations and contrary to the patient-physician relationship. Be that as it may, I think that if CMS feels that it’s in the industry’s interest to not impose these programs on hospitals, but rather have them volunteer and opt in as many did with BPCI (Bundled Payments for Care Improvement), as long as they can make that work and get enough data to evaluate the effectiveness of bundled payments as an approach to improve quality of care and reducing cost, then, I’m okay with that,” but he adds, “We do need to move forward on this issue. I don’t think any of us can forgot that we are hurdling toward the point of spending 25 percent of GDP (gross domestic product) on healthcare. I don’t think we can afford the time it may take us to get there at a pace that makes everyone comfortable.”

Michael Abrams

Abrams also noted, “From what I ‘ve seen and the rationale for this rule, the Administration is squarely behind the move from volume to value and Secretary Price was supportive of MACRA and still supportive of it as well. I don’t see this abandoning that change.”

What’s more, Garcia doesn’t see the proposed changes and even cancellations of certain mandatory bundled payment programs as an indication that CMS is scaling back on bundled payments as an alternative payment model. “The voluntary bundled payment program has been extremely successful to date,” he says.

According to a CMS analysis of the Bundled Payments for Care Improvement (BPCI) initiative published in September 2016, and as reported by Healthcare Informatics, the voluntary programs have shown promising results to reduce Medicare spending in 11 out of 15 clinical episode groups. CMS stated that more than 1,400 Medicare providers are currently participating in bundles through the BPCI initiative, and that early results are encouraging, with orthopedic surgery bundles, in particular, showing promising results on cost and quality in the first two years of the initiative.

Abrams says, “The truth is that the mandatory programs that are driven by CMS, on the one hand, they do tend to force business discipline associated with bundled pricing into the marketplace, even among organizations that would not otherwise adopt it. That’s a good thing. The truth is it’s heavily bureaucratic, and arbitrary and may be unfair to those organizations that come into the program and already have moderate or low pricing.”

“I think there were some flaws in the mandatory programs,” Garcia says, in contrast to the voluntary BPCI initiative. “First, the success of the bundled payment program has largely been in creating systemic change. If we really want the way that healthcare is delivered to change, we have to do it systemically, not in these little micro bursts. For example, like the mandatory program for lower joints, it was such a specialized area; it allowed people to change one thing and one thing only, without changing their process in its totality.”

He continued, “The mandatory program, because it was sort of forced on people, they become very defensive early in the process. On a voluntary basis, folks signed up in a voluntary way, they signed up for risk and they signed up saying, ‘I want to change the way we coordinate care, after the acute episode, and into the post-acute recovery period.’ And so, it’s not too hard to understand that if you’re going to create systemic change, you want to bring people in that are interested in that and want to see that happen and that will slowly pull all the others along who are sort of watching it.”

What’s more, Garcia added, “Value-based payments are not going away. The commercial market has already begun to adopt it and will continue to adopt it as one of their payment mechanisms. The bus has left the station. I think it’s time for folks to get on.”

Healthcare industry experts contend that it’s likely that the latest proposed rule won't entirely cancel the models, but instead make them voluntary. CMS may also roll it into the upcoming BPCI Advanced initiative, which is expected to move on full steam ahead.

Abrams agrees, noting, “It would be a mistake for hospital executives to preclude that the pressure is off, in terms of the move away from fee-for-service and the move toward more market-based approaches. The only sensible thing for hospital administrators to do is to start moving their own organizations toward market-based approaches, ones that can point to transparency of pricing and quality data, ones in which that hospital willingly takes accountability for cost and quality and that’s the essence of a bundled price approach.”

Even without mandatory programs, the introduction of bundled pricing has changed the conversation in the healthcare industry, Abrams contends. “We’re seeing new conversations compared to even five or seven years ago. Self-insurance and large employers are in a position to push delivery systems for innovations like bundled pricing that have the potential to drive down cost and improve quality. I think that will continue to drive reform in healthcare delivery.”

Leveraging IT and Analytics for Bundled Payment Models

Moving forward, as more hospitals consider participating in voluntary models and as CMS will likely advance the BPCI program, senior healthcare executives and IT leaders need to focus on the tools and the resources they will need to successfully participate in bundled payment models.

“One of the first things they need to think about is technology that will enable them to follow the patient throughout the patient’s episode of care, so when they leave those four walls of the hospital,” Garcia says. “So, I would say technology is first, and second is analytics. They need to spend a lot of time with the data and understand where the large variances in spending occur. And the third piece is creating networks of downstream providers. So, I think having networks of post-acute providers, whether skilled nursing facilities, inpatient rehab facilities or home health care companies that are willing to participate in the bundled payment effort.”

And CIOs at healthcare provider organizations need to be thinking about the role that IT and technology will play in all of this, many healthcare industry experts say. “As a CIO in a hospital system, I think finding ways to integrate some of the external technology solutions that exist that could help them to identify these bundled payment patients and then help them track these patients would be something that as a hospital-based CIO, I would be thinking about immediately and pursuing,” Garcia says, adding, “If I’m the CIO of a large skilled nursing facility chain or the owner of a home health care chain, I would be thinking about how do I get connected to these technology solutions out there, so that I can be a participant in that data exchange.”

 

 

 

 


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CMS: 93% of Clinicians Get Positive Payment Adjustments for MIPS Year 1

November 8, 2018
by Rajiv Leventhal, Managing Editor
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Ninety-three percent of MIPS (Merit-based Incentive Payment System)-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment, according to a CMS (Centers for Medicare & Medicaid Services) announcement today.

The first year of MIPS under MACRA’s Quality Payment Program (QPP) was dubbed by CMS as a “pick your pace year,” which essentially enabled clinicians to avoid payment penalties as long as they submitted at least the minimum amount of quality data. As such, in its announcement, CMS did admit that the overall performance threshold for MIPS was established at a relatively low level of three points, and the availability of “pick your pace” provided participation flexibility through three reporting options for clinicians: “test”, partial year, or full-year reporting.

CMS said that 93 percent of MIPS-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment. CMS specifically calculated that approximately 1.06 million MIPS-eligible clinicians in total will receive a MIPS payment adjustment, either positive, neutral, or negative. The payment adjustments for the 2017 program year get reflected in 2019.

Breaking down the 93 percent of participants that received a positive payment adjustment last year, 71 percent earned a positive payment adjustment and an adjustment for exceptional performance, while 22 percent earned a positive payment adjustment only. Meanwhile, just 5 percent of MIPS-eligible clinicians received a negative payment adjustment, and 2 percent received a neutral adjustment (no increase or decrease).

Of the total population, just over one million MIPS-eligible clinicians reported data as either an individual, as a part of a group, or through an Alternative Payment Model (APM), and received a neutral payment adjustment or better. Additionally, under the Advanced APM track, just more than 99,000 eligible clinicians earned Qualifying APM Participant (QP) status, according to the CMS data.

CMS Administrator Seema Verma noted on the first pick-your-pace year of the QPP, “This measured approach allowed more clinicians to successfully participate, which led to many clinicians exceeding the performance threshold and a wider distribution of positive payment adjustments. We expect that the gradual increases in the performance thresholds in future program years will create an evolving distribution of payment adjustments for high performing clinicians who continue to invest in improving quality and outcomes for beneficiaries.”

For 2018, the second year of the QPP, CMS raised the stakes for those participating clinicians. And in the third year of the program, set to start in January 2019, a final rule was just published with year three requirements. Undoubtedly, as time passes, eligible clinicians will be asked for greater participation at higher levels. At the same time, CMS continues to exempt certain clinicians who don’t meet a low-volume Medicare threshold.

Earlier this year, CMS said that 91 percent of all MIPS-eligible clinicians participated in the first year of the QPP, exceeding the agency’s internal goal.

What’s more, from a scoring perspective in 2017, the overall national mean score for MIPS-eligible clinicians was 74.01 points, and the national median was 88.97 points, on a 0 to 100 scale. Further breaking down the mean and median:

  • Clinicians participating in MIPS as individuals or groups (and not through an APM) received a mean score of 65.71 points and a median score of 83.04 points
  • Clinicians participating in MIPS through an APM received a mean score of 87.64 points and a median score of 91.67 points

Additionally, clinicians in small and rural practices who were not in APMs and who chose to participate in MIPS also performed well, CMS noted. On average, MIPS eligible clinicians in rural practices earned a mean score of 63.08 points, while clinicians in small practices received a mean score of 43.46 points.

Said Verma, “While we understand that challenges remain for clinicians in small practices, these results suggest that these clinicians and those in rural practices can successfully participate in the program. With these mean scores, clinicians in small and rural practices would still receive a neutral or positive payment adjustment for the 2017, 2018, and 2019 performance years due to the relatively modest performance thresholds that we have established. We will also continue to directly support these clinicians now and in future years of the program.”

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HHS Secretary Azar: HHS Is Planning New Mandatory Bundled Payment Models

November 8, 2018
by Heather Landi, Associate Editor
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The Centers for Medicare & Medicaid Services (CMS) is revisiting mandatory bundled payment models, possibly for radiation oncology and cardiac care, according to Health and Human Services Secretary Alex Azar, which signals a strong about-face in the Trump Administration’s policy about bundled payment initiatives.

HHS is reexamining the role that mandatory bundled payment models can play in the transition to value-based care, Azar said in a keynote speech at the Patient-Centered Primary Care Collaborative Conference on Thursday. HHS published Azar’s comments.

In the published remarks, Azar said the Trump Administration is revisiting mandatory bundled payments and exploring new voluntary bundled payments as part of the Administration’s goal of paying for outcomes, rather than process.

“We need results, American patients need change, and when we need mandatory models to deliver it, mandatory models are going to see a comeback,” Azar said.

In his speech, Azar said, “Imagine a system where physicians and other providers only had to worry about the outcome, rather than worrying about their staffing ratios and the individual reimbursements for every procedure they do and every drug they prescribe. That kind of payment system would radically reorient power in our healthcare system—away from the federal government and back to those closest to the patient.”

He continued, “One way we can do that is through bundling payments, rather than paying for every individual service. This is an area where you have already seen testing from CMMI for several years now—and I want to let you know today that you are going to see a lot more such ideas in the future.”

Azar highlighted the Bundled Payments for Care Improvement (BPCI), which, he said, has shown significant savings in several common inpatient episodes, including joint replacement and pneumonia.

During his speech on Thursday, Azar said, “I want to share with all of you for the first time today: We intend to revisit some of the episodic cardiac models that we pulled back, and are actively exploring new and improved episode-based models in other areas, including radiation oncology. We’re also actively looking at ways to build on the lessons and successes of the Comprehensive Care for Joint Replacement model.

“We’re not going to stop there: We will use all avenues available to us—including mandatory and voluntary episode-based payment models,” he said.

One industry group, the American Society for Radiation Oncology (ASTRO), already has voiced concerns about a mandatory payment model. In a statement issued Thursday afternoon, Laura Thevenot, CEO of ASTRO, made it clear that the organizaiton strongly supports a radiation oncology alternative payment model (RO-APM). "ASTRO has worked for many years to craft a viable payment model that would stabilize payments, drive adherence to nationally-recognized clinical guidelines and improve patient care. ASTRO believes its proposed RO-APM will allow radiation oncologists to participate fully in the transition to value-based care that both improves cancer outcomes and reduces costs."

Thevenot said ASTRO has aggressively pursued adoption of this proposed model with the Center for Medicare and Medicaid Innovation (CMMI). However, Thevenot said the group has concerns "about the possibility of launching a model that requires mandatory participation from all radiation oncology practices at the outset."

Further, Thevenot said any radiation oncology payment model will represent "a significant departure from the status quo." "Care must be taken to protect access to treatments for all radiation oncology patients and not disadvantage certain types of practices, particularly given the very high fixed costs of running a radiation oncology clinic," Thevenot stated.

Back in January, CMS announced the launch of the voluntary BPCI Advanced model, noting that it “builds on the earlier success of bundled payment models and is an important step in the move away from fee-for-service and towards paying for value.” The BPCI Advanced model includes more than 1,000 participants that are receiving episode-based payments for over 30 clinical areas, Azar said.

“BPCI Advanced is a voluntary model, where potential participants can select whether they want to join. But we’re not going to stick to voluntary models. Real experimentation with episodic bundles requires a willingness to try mandatory models. We know they are the most effective way to know whether these bundles can successfully save money and improve quality,” Azar said.

The Obama Administration introduced mandatory bundled payment for care for heart attacks and for cardiac bypass surgery in July 2016.

In the past, CMS Administrator Seema Verma has said that she does not support making bundled payments mandatory, and former HHS Secretary Tom Price, M.D. had strongly opposed mandatory bundles, going so far as to direct the end of two mandatory bundled payment programs—one existing and one previously announced. In November 2017, CMS finalized a rule, proposed in August 2017, that cancelled mandatory hip fracture and cardiac bundled payment models.

As per that final rule, CMS also scaled back the Comprehensive Care for Joint Replacement Model (CJR), specifically reducing the number of mandatory geographic areas participating in CJR from 67 areas to 34 areas. And, in an effort to address the unique needs of rural providers, the federal agency also made participation voluntary for all low-volume and rural hospitals participating in the model in all 67 geographic areas.

On Thursday, Azar acknowledged that his statements signaled HHS was reversing course on its previous stance, noting that last year the administration reduced the size of the CJR model and pulled back the other episode payment models, including those on cardiac care, before they could launch.

Azar, who was confirmed as HHS Secretary earlier this year, signaled early on that he diverged from Verma and Price on his views about mandatory bundled payments. During a Senate Finance Committee hearing in January on his nomination for HHS Secretary, he said, on the topic of CMMI [the Center for Medicare and Medicaid Innovation] pilot programs, “I believe that we need to be able to test hypotheses, and if we have to test a hypothesis, I want to be a reliable partner, I want to be collaborative in doing this, I want to be transparent, and follow appropriate procedures; but if to test a hypothesis there around changing our healthcare system, it needs to be mandatory there as opposed to voluntary, then so be it.”

During his speech Thursday, Azar pointed to the Administration’s first mandatory model, which was unveiled two weeks ago, called the International Pricing Index (IPI) Model for payments for Part B drugs. Azar said the model is a “mandatory model that will help address the inequity between what the U.S. and other countries pay for many costly drugs.”

Further, Azar said CMMI also will launch new primary care payment models before the end of the year, with the aim of introducing a spectrum of risk for primary care providers, Azar said.

“Before the end of this year, you will see new payment models coming forth from CMMI that will give primary care physicians more flexibility in how they care for their patients, while offering them significant rewards for successfully keeping them healthy and out of the hospital,” he said.

“Different sizes and types of practices can take on different levels of risk. As many of you know, even smaller practices want to be, and can be, compensated based on their patients’ outcomes,” he said. “We want to incentivize that, with a spectrum of flexibility, too: The more risk you are willing to take on, the less we’re going to micromanage your work.”

Azar also noted HHS’ efforts to examine impediments to care coordination, such as examining the Stark Law, the Anti-Kickback Statute, HIPAA, and 42 CFR Part 2. CMS has already launched and concluded a request for information on the Stark Law, and the Office of the Inspector General has done the same on the Anti-Kickback Statute, he noted.

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Dr. Sanjay Gupta’s Heartening Speech at CHIME18 Should Inspire U.S. Healthcare Leaders

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The story of an Amazonian tribe could serve as a motivational lesson for U.S. healthcare stakeholders

It was inspiring to hear Sanjay Gupta, M.D., the well-known neurosurgeon and medical reporter, give the closing keynote at the College of Healthcare Information Management Executives (CHIME) 2018 Fall CIO Forum in San Diego last week. Dr. Gupta, who serves as associate chief of the neurosurgery service at Grady Memorial Hospital in Atlanta, while also best known as CNN's multiple Emmy Award-winning chief medical correspondent, discussed the fascinating balance that he strikes between medicine and media.

“Oftentimes, I see people at their best, and sometimes at their worst. I get to travel the world, where I learn so much, but also teach others. Sometimes the dance between medicine and media can be awkward and emotionally challenging. But almost always, the stories we do have a significant impact,” Gupta told the Fall CIO Forum attendees.

What was perhaps most captivating about Gupta’s speech was when he spoke about visiting a primitive Amazonian tribe that appears to have the best heart health in the world. The Tsimane people of Bolivia do not speak a language, live a simple existence, and are disease-free, explained Gupta. So he went to visit the tribe with the goal to understand its lifestyle and what led to its members having such healthy hearts.  

Sanjay Gupta, M.D.

“I went spearfishing with one [tribe member], who thought he was 84-years-old, but he really didn’t know for sure. His shirt was off, and he was ripped, balancing himself on the canoe, just looking at the water, spearing fish. His eyesight was perfect. The entire indigenous tribe was just like this,” Gupta recalled.

After examining the Tsimane tribe’s diet, Gupta noted it was a hunter-gatherer society, meaning there was nothing technological. “The most mechanical thing I saw was a pulley for the well,” he said. Seventy percent of what they eat is carbohydrates—unrefined and unprocessed—while 15 percent of their diet is protein, and 15 percent fat, he added. “You need farmed food because oftentimes you don’t have successful hunting days, so the farmed food was the food in the bank. And they would do intermitting fasting, too. These are the people with the healthiest hearts in the world,” Gupta exclaimed.

When it comes to activity, when hunters are hunting, they’re never outrunning their prey, but rather outlasting it, noted Gupta. “We found that they walked about 17,000 steps per day. But they didn’t run; they only walked. They are active, but not intensively active. They also hardly every sit—they are either lying or standing all the time. And they would get nine hours of sleep per night, waking up to the rooster’s crow. There are no devices. Again, these are the people who have the healthiest hearts in world. They don’t have a healthcare system and don’t spend a dollar on healthcare,” Gupta stated.

What’s even more interesting about this tribe is that each of its members lives with some degree of a parasitic infection, which they usually get it early in life, have a few days of illness, and then just live with these parasites in their bodies for their entire lives. “The belief is that so much of the disease we talk about—that leads to this $3.3 trillion price tag [the total cost of U.S. healthcare spending in 2016]—is actually ignited or worsened by our immune systems. So the parasitic infections could be part of the reason they are protected from all types of diseases,” Gupta offered.

Essentially, it’s living this basic, undeveloped life that “inadvertently provides them extraordinary protection against heart disease,” noted a report in HealthDay last year. “Thanks to their unique lifestyle, most Tsimane [members] have arteries unclogged by the cholesterol plaques that drastically increase the risk of heart attack and stroke in modern Americans,” Gregory Thomas, M.D., medical director of the Memorial Care Heart & Vascular Institute at Long Beach Memorial, in California, said in that report.

Tsimane tribe (source: University of New Mexico)

You might be asking what the story of the Tsimane tribe has to do with U.S. healthcare since its lifestyle would obviously never be replicated in a developed country. And while that is true, it’s tough to ignore the $1 billion per day that our healthcare system spends on heart disease—compared to the Tsimane tribe that doesn’t spend a single dime, yet has the healthiest hearts in the world.

In this sense, perhaps we can use the Tsimane story to push ourselves to develop a greater understanding of why we spend so much money on healthcare and don’t have the results to show for it. Gupta asked this $3.3 trillion-dollar question in his speech—why does healthcare in the U.S. cost so much and what do we get in return?

“If you look at the statistics, it’s not impressive. More people die from preventable disease in the U.S. than in 12 other nations. People live longer in 30 other countries compared to the U.S.—including places like Chile and Costa Rica. We still have tens of millions of people who don’t have access, and we still spend all this money on healthcare. Why?” he asked.

Gupta explained that the nation’s high healthcare costs come down to the following: high administrative costs, technology, new drugs and development, and the cost of chronic disease—the last which is incredibly self-inflicted. About 70 to 80 percent of chronic disease is self-preventable, he said.

Indeed, as most of us know, about 5 percent of the U.S. population accounts for 50 percent of the healthcare costs. These are folks who are defined by illness, not by health, Gupta stated. This is why the modern-day healthcare system has proactively taken to targeting that 5 percent to improve their chances of preventing disease and staying healthy. “Data shows that home visits, nutritional counseling, one-on-one coaching, and diligent follow-up care can go a long way in preventing someone from getting sick in the first place, and from turning a disease into something more chronic. Some of these interventions can actually reverse disease. The die is not cast,” Gupta said.

For me, Gupta’s keynote highlighted the need for efforts around value-based care, care management, and population health to be intensified. A big part of that, as noted in the speech, is addressing patients’ social and environmental factors. It’s not at all surprising to see studies such as this one from earlier this year, conducted by researchers at the University of South Florida (USF) College of Public Health, Tampa, and WellCare Health Plans, and published in Population Health Management, which found that healthcare spending is substantially reduced when people are successfully connected to social services that address social barriers, or social determinants of health, such as secure housing, medical transportation, healthy food programs, and utility and financial assistance.

And with that, there is also an enormous opportunity for data and IT to play a role. Information sharing, so that providers have access to the right information at the point of care—no matter where the patient is—will be critical to reducing unnecessary costs. As will the robust use of data analytics, so that patient care organizations can be proactive in predicting which patients are at highest risk, when they might need services, and how to intervene at the appropriate time.

But to this point, Gupta, who noted that our society can get too caught up in high-tech, also suggested that “medicine seems to play by slightly different rules when it comes to innovation as opposed to other sectors. Sometimes, innovation moves painstakingly slow in respect to medicine.” At the end of the day, he said, it will be “the innovations that make us, [as a society], healthier, happier, and connect us in frictionless ways, that will be the biggest winners.”

So, will the U.S. population suddenly turn off their iPhone alarms, wake up to the rooster’s crow, and become a hunter-gatherer society? No, I would say that’s quite unlikely to happen. But hearing stories such as the one of the Tsimane tribe might just serve as good enough motivation to bring down the astronomical and unsustainable costs of U.S. healthcare.

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