Council Continues Thought Leadership on Health Care Spending and Value

The Health Affairs Council on Health Care Spending and Value has followed its initial report with an article series.

In February 2023, Health Affairs and the council published its initial A Road Map for Action report, which has now been supported by a series of articles for Forbes, written by council co-chair William Frist, MD, former U.S. Senate Majority Leader.

The council's stated purpose is to "ignite and provide a focal point for discussion, analysis, and action surrounding the topic of US health care spending and value" and to promote a "nonpartisan, evidence-based approach to understanding what we spend on health care, what benefits we receive from that spending, and how the nation can achieve more from its investment in health."

The council's other co-chair is Margaret Hamburg, MD, former FDA commissioner. The council includes 20 leaders from across the healthcare delivery system.

Intersection of council recommendations, goals and associated levers

The council's first four recommendations related to U.S. healthcare are:

• Administrative streamlining
   
• Price regulation and competitive supports
   
• Spending targets
   
• Value-based payment

The council report maps each of these recommendations to four levers that can achieve the overall goal of "higher-value health care spending and growth in the U.S.":

• Price
   
• Volume
   
• Service mix
   
• Sustainable growth

Price is the one lever mapped to all four council recommendations while value-based payment is the recommendation impacted by all four levers.

Recommendation 1: Administrative streamlining

The council makes two recommendations for administrative streamlining: standardizing key processes and harmonizing quality measures.

Streamlining includes the standardizing of claims processing and also of data collection for provider directories, provider credentialing, and prior authorization.

Characterizing these processes as both "in between" and "seismic," the report notes: "Although some of the reforms detailed here would admittedly produce relatively small savings on their own, the council believes that it is important to start with these actionable steps to build momentum for taking larger steps in the future."

As part of its longer-term proposals, the council recommends that quality measures be streamlined across all payer types and state and federal agencies—including the more than 2,200 metrics included in CMS programs. The report cites a study that harmonizing measures could save up to $7 billion while improving provider and patient experience.

Recommendation 2: Price regulation and competitive supports

This category includes four individual recommendations:

1. Increased monitoring of markets and mergers
    
2. Limited price regulation in non-competitive markets
    
3. Performance improvement plans and conditional regulation in potentially competitive markets
    
4. Supports for already competitive markets

To support these recommendations, the council report cites the impact of private sector pricing on the public sector and market-specific competitive dynamics, noting: "There is compelling evidence that relatively high US private-sector prices are a key driver of relatively high US health care spending. Also compelling is a lack of evidence linking consolidation-induced higher prices to higher quality of care."

The council adds that while its recommendations "address hospital markets … a similar framework could be applied to physician or insurance markets."

Recommendation 3: Spending targets

As with price regulation and competitive supports, this category also includes four recommendations that stress data support for setting growth targets, monitoring spending growth, and enforcing targets with a call for federal data infrastructure support.

"The missing ingredient in US efforts to moderate health care spending growth is a locus for collective action," notes the report. "The council therefore encourages states, with federal support, to convene stakeholders to engage in data collection, analysis, and discussion about health care spending."

The council cites examples of multi-stakeholder work in Maryland and Massachusetts.

Recommendation 4: Value-based payment

Value-based payment (VBP) includes just one recommendation that should come as no surprise: continue work on models that work. The council cites the 10-year findings of the Center for Medicare and Medicaid Innovation (CMMI), showing that federal VBP models were duplicative and underperformed.

Whereas fee-for-service is still the chassis of healthcare reimbursement, the report states that VBP can be its new chassis, one that supports the council's three other recommendation areas: streaming, pricing, and spending.

Noting that there are "reasons to be optimistic," the council specifically recommends:

• Fewer, better aligned VBP models
   
• Incentives that promote patient selection of, and lock in to, accountable care providers
   
• Greater patient responsibility and flexibility
   
• Incentives to address social drivers of health

Assessing confidence

The council rated its 11 recommendations with either Medium or High confidence in their ability to produce savings or slow spending growth, the level of resources/implementation difficulty involved, and the financial magnitude of success.

The report concludes with a statement that resembles that of The Innovator's Prescription, published more than a decade ago: "The level of collaboration and compromise that will be required to implement these recommendations is significant. However, in steering policy makers toward a set of recommendations that has been vetted and supported by a diverse group of experts with divergent interests, the council hopes to provide a strong starting point for action."