By Clinical Informatics News Staff

January 26, 2015 | Secretary of Health and Human Services Sylvia Mathews Burwell today published a letter in the New England Journal of Medicine outlining near-term goals for influencing the direction of U.S. healthcare. Her plans for the Department include raising the proportion of Medicare payments made under alternative payment models to 30% by 2016 and 50% by 2018, as well as increasing the proportion of fee-for-service payments that take into account some form of quality of care metric. "This is the first time in the history of the program that explicit goals for alternative payment models and value-based payments have been set for Medicare," Burwell writes.

Alternative payment models, which aim to control healthcare costs by reimbursing care providers and physicians for improving the general health of their patient populations rather than for specific services, visits, and prescriptions, have been a major priority of the Affordable Care Act (ACA) and the Obama Administration. These payment models are largely supported by the huge purchasing power of the Centers for Medicare & Medicaid Services, which provides a significant portion of reimbursement to nearly every care provider in the country.

Accountable Care Organizations, which unite multiple providers with common patients and may receive payments under a capitated or shared savings model rather than flat fee-for-service, have been the main vehicle for these reimbursement changes. However, Burwell writes that HHS also plans "to develop and test new payment models for specialty care, starting with oncology care." Oncology may be a promising field for value-based payments, as personalized therapies based on patients' unique genetic profiles are increasingly making it possible to deliver better care with more precise diagnostics. In other fields with more standardized courses of treatment, it could be much harder to alter the standard of care through new payment models. A value-based care strategy focused on fields where personalized therapies are more common could also be seen to dovetail with the Precision Medicine Initiative that President Obama recently announced in his State of the Union address.

Burwell also mentions other priorities for HHS looking forward, including a focus on reducing hospital readmissions, encouraging providers to adopt electronic health records with specific "meaningful use" capabilities, and studying difficult-to-measure patient-reported outcomes. All these goals are consistent with actions HHS has taken since passage of the ACA in 2010. While Burwell notes that the rise in U.S. healthcare spending has slowed dramatically over the period HHS has pursued these policies, it is impossible to disentangle the effects of value-based care models from other ACA reforms or from broader economic trends.