Are Federal Health Officials Fed Up With Providers’ Unwillingness to Take on Downside Risk? | Mark Hagland | Healthcare Blogs Skip to content Skip to navigation

Are Federal Health Officials Fed Up With Providers’ Unwillingness to Take on Downside Risk?

May 14, 2018
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A series of tough public statements by senior federal healthcare officials point to an underlying problem: the federal experiment with accountable care isn’t moving the needle fast enough

Something quite curious has been happening in federal healthcare policy recently, involving comments made by senior federal healthcare officials about the progress—or lack thereof—of the accountable care organizations participating in the various ACO programs sponsored by the Centers for Medicare and Medicaid Services.

To frame this curious set of comments, let’s first look at what Healthcare Informatics Managing Editor Rajiv Leventhal wrote in an article published here on May 7. I’m going to quote the entire article here, both out of fairness, and because the conceptual frame of this is important. Here’s what he wrote:

“At this week’s American Hospital Association (AHA) annual membership meeting, CMS (the Centers for Medicare & Medicaid Services) Administrator Seema Verma asserted that “upside-only” ACOs that do not take on downside risk are not producing good enough results. 

Verma delivered a keynote at the Washington, D.C.-based meeting on May 7, where she stated, according to a CMS transcript of the comments, “In addition to developing new models that align with our principles, [HHS Secretary Alex Azar and I] have been reviewing models launched under the prior Administration. We’ve looked at CMS’s accountable care organizations, or ACOs,” Verma said.

More specifically, Verma did note that some ACOs have indeed taken on significant downside risk.  “These ‘two-sided ACOs’ have shown significant savings to the Medicare program while advancing quality. And we applaud this success and support the boldness of providers that participate in these models,” she said.

That’s the glass-half-full perspective, however. On the other hand, Verma also remarked in her keynote that “the majority of ACOs, while receiving many waivers of federal rules and requirements, have yet to move to any downside risk.  And even more concerning, these ACOs are increasing Medicare spending, and the presence of these ‘upside-only’ tracks may be encouraging consolidation in the market place, reducing competition and choice for our beneficiaries.  While we understand that systems need time to adjust, our system cannot afford to continue with models that are not producing results,” Verma said.

When ACOs are in a one-sided risk model, they do not share losses with the government when they overspend past their benchmarks, but they do share in the gains. As such, in these one-sided risk models, CMS is on the hook for the losses all on its own.

To this point, there has been recent analysis of Medicare ACOs—specifically the Medicare Shared Savings Program (MSSP)—that supports Verma’s remarks. A study from Washington, D.C.-based consulting firm Avalere, published in late March, found that downside-risk models in the MSSP model (Tracks 2 and 3) have experienced more positive financial results than upside-only ACOs in this model, indicating the potential for greater savings to CMS over time as the number of downside-risk ACOs increases. Specifically, ACOs in the upside-only model (MSSP Track 1) increased federal spending by $444 million compared to the downside-risk ACOs (MSSP Tracks 2 and 3) that reduced federal spending by $60 million over five years, according to that analysis.

Indeed, as it stands today, MSSP Track 1 remains by far the most popular option for ACOs, representing 82 percent of all MSSP ACOs in 2018. Recently, the National Association of ACOs, the American Medical Association (AMA) and others jointly signed a letter requesting that CMS allow certain ACOs to continue in MSSP Track 1 for a third agreement period before having to move to a two-sided risk model.”

And those comments by Administrator Verma, and published results coming out of Avalere in March, followed on the heels of comments that she herself had made in a keynote address to the World Health Care Congress in Washington, on Monday, April 30, when, as I reported on that day, she said, “A looming healthcare crisis on the horizon. When I say crisis, I’m not engaging in hyperbole. Spending growth higher than overall economy” continues apace, Verma noted in that speech. “By 2026, we will be spending of every five dollars on healthcare. That means healthcare spending will crowd out other priorities,” she noted, such as infrastructure, defense and education. “And for every American citizen, it means that more and more dollars will go to higher premiums, deductibles, and copays. The bottom line is that our system is unsustainable; and there’s no easy solution.”

What’s more, Verma said, healthcare spending inflation is growing at the same time that outcomes are not improving relative to those of other countries. Given the lack of demonstrated value for spending, Verma told her audience two weeks ago today that action is necessary, adding that “President Trump agrees. To that end, he has encouraged us to take bold action to increase quality, improve outcomes, and lower cost. Those are not new concepts,” of course, she said, but the key will be to increase value in healthcare, and use the power of CMS payment to force a march towards that value.

And then, just two days later, on Wednesday, May 2, Health and Human Services Secretary Alex Azar echoed some of the same sentiments that Verma had made, in his speech to the World Health Care Congress, in which he cited accelerating the value-based transformation of the U.S. healthcare system and addressing the cost and quality of U.S. healthcare as two of the top four priorities for his agency, along with addressing the opioid abuse crisis.

Indeed, Secretary Azar said in that speech, “We at HHS know that the idea of value-based transformation is not new. President Bush, in whose administration I served, and President Obama, both worked on this. I personally worked on this under Mike Leavitt,” a Bush Administration HHS Secretary. “HHS has often lagged behind the private sector, where so many of you have made so much progress,” he said. “Everyone here recognizes that the current system will not last,” as it has become unsustainable because of its cost.

What’s more, in that same speech at the World Health Care Congress, Azar emphasized strongly that he was interested in pushing forward existing alternative payment models, while highlighting the CMS announcement from just a week earlier (April23), that CMS was going to try to develop a path to direct provider (physician) contracting under Medicare.

Referencing that announcement, Azar said on May 2 that “The final two areas of innovation we are focused on are engaging in new models of payment for Medicare and Medicaid, and removing obstacles to innovation.” In that, he said, “We’re going to think big and bold. Alongside the 1,000-plus comments we released, we’re going to focus on direct provider contracting in Medicare. These can offer the opportunity for seniors to receive convenient, accessible care from the physician they know, at a reasonable cost. We look forward to consulting with all of you on how these arrangements might work,” he said. “The direct provider contracting proposal also reflects our interest in reducing burdens on providers, especially on those that might impede care coordination.”

And then there’s this: last week, at the HLTH Conference in Las Vegas, Bruce Greenstein, HHS’s Chief Technology Officer, answered a question from Rasu Shrestha, M.D., chief innovation officer at the Pittsburgh-based UPMC, in an interesting way.

In the middle of a discussion taking place under the session title, “U.S. Government Investing in Health Innovations,” Dr. Shrestha had questioned Greenstein about Seema Verma’s comments about MSSP ACOs not moving quickly enough, and had referenced a survey just published, which found that 71 percent of the leaders a organizations belonging to NAACOS, the National Association of ACOs, said that they would consider dropping out of the MSSP program if forced into downside risk.

Greenstein’s response to Shrestha’s question? “The government is making the market more fertile, to enhance value. Medicare Advantage plans, second area. Every year, we’re increasing the number of people in MA plans. Large plans, some national, some local, are investing in that area. Large plans buying vertically integrated provider organizations, making investments in the social determinants of health. We’ll continue to see innovation on the payment side and on the delivery side, we don’t’ tell them what to do. And we’re continuing to use our authority at CMMI [the Center for Medicare and Medicaid Innovation] to do innovative delivery models. It’s really about value. In this case, value does not have to equal risk. What do we think about as value? Quality, affordability, and consumer-centricity.”

That means, Greenstein continued, that the federal government is trying to improve choice and quality in healthcare. “So with this, we have the ACO model,” he said. “You just referenced a press release where 71 percent of the ACOs said if there’s downside risk, they’re likely to leave this program. Well, maybe this program is not for you. Because if you only want a little bit of extra money but don’t want to take risk, maybe this isn’t the program for you. There’s no ‘A’ for effort here; you have to produce results.”

What does it all mean?

Now, it’s quite possible that all of these federal healthcare officials were doing a bit of posturing in their statements, particularly Seema Verma. After all, depending on how one views the federal ACO programs, ACOs are either moving forward A) very rapidly, B) at a reasonable pace, or C) altogether. It really depends on one’s perspective.

On the one hand, there were 480 ACOs participating in the MSSP program as of January 1, 2017; that doesn’t include the 51 ACOs in the Next Generation ACO program, or the nine that remained in the Pioneer ACO program until Pioneer was shut down last year. That’s 531 federal ACOs, more than some would have predicted would be operating at this point in time.

On the other hand, as referenced above, the Avalere analysis published in late March found that “ACOs in the upside-only model (MSSP Track 1) increased federal spending by $444 million compared to the downside-risk ACOs (MSSP Tracks 2 and 3) that reduced federal spending by $60 million over five years, according to that analysis.” And that is genuinely concerning.

So here’s where this gets really tricky from a federal healthcare policy perspective, because, really, what is the best way to accelerate providers into a willingness to take on downside risk? It’s clear that they can’t simply force providers to taken on downside risk—certainly not in any explicit way (though they might theoretically be able to figure out some indirect way to do so).

I have the feeling that the proposal for direct contracting between the Medicare program and individual physicians, is one of the levers that HHS and CMS officials are thinking of using to stimulate a rush on the part of hospitals, large medical groups, and integrated health systems, into downside risk, in the near future. The problem with that idea is that the physicians who might already be favorably disposed to taking on downside risk, are already those who are connected, by salary or contract, to integrated health systems, clinically integrated networks, or at least, relatively large multispecialty physician groups.

And the MIPS/MACRA requirements around quality reporting are already in place, with the prospects for them to become more rigorous, already in plain sight.

What won’t work will be any hectoring from HHS or CMS officials, no matter how well-intentioned. Physicians in particular already feel deeply oppressed by all the changes taking place right now on the policy and payment level in U.S. healthcare. Many are describing themselves as burned out and ready to leave the profession.

At the same time, we as a society are facing a massive, massive cost cliff, with, as the Medicare actuaries have pointed out, total U.S. healthcare spending expected to leap from $3.5 trillion in 2017 to $5.7 trillion in 2026—a 62.8-percent growth over nine years—and with total spending going from consuming 17.9 percent to 19.7 percent, of our gross domestic product, during that same time.

Meanwhile, on the Congressional level, this Congress is faced with the reality that massive, straight Medicare reimbursement cuts to providers, are simply not on the table. There is no political will among any federal officials right now for the straight implementation of such provider cuts; and members of both parties know, in a mid-term election year, that any move to enact massive provider pay cuts would only lead to rebellion on all sides.

So, we’re back to the Rubik’s cube-like nature of this dilemma: progress in accountable care at the federal level, while laudable, is simply not moving forward quickly enough to show the results needed, on a policy level, to allow everyone to declare a victory in the constant battle to pull out further “waste” from federal healthcare spending on hospital and physician services.

So the twelve months will be a fascinating time in federal healthcare policy, as senior officials from this administration grapple with the very complex issues facing them, as they attempt to force the U.S. healthcare system forward into value. The ancient Chinese adage about being cursed to live in interesting times certainly comes to mind.


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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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