The Measles Outbreak Is a Big Story. This One’s Bigger.

In the past 10 days, one health care story went viral: the Disneyland-centered measles outbreak.

It’s an important story. More than 100 Americans are infected; thousands more have been exposed.

But it’s probably not the most important story in health care this month.

The only problem is — which one is?

Busy Time of Year

Just look at the flurry of news last week.

On Monday, HHS announced a plan to shift 85% of Medicare payments to “quality or value” by the end of 2016. Later that day, the Congressional Budget Office issued a report concluding that the price tag for the Affordable Care Act’s coverage expansion had fallen by one-fifth.

On Tuesday, Gov. Mike Pence said that Indiana would opt into the ACA’s Medicaid expansion — the 10th Republican governor to do so. On Thursday, a private-sector coalition announced it would follow HHS’ payment proposal with its own value-based push. On Friday, the Office of the National Coordinator for Health IT pledged that the nation would achieve basic electronic health data interoperability by 2017.

Capping off last week, President Obama announced a new personalized genomics initiative — and began this week by floating the idea of negotiating Medicare drug prices.

Taken alone, any of those stories could lead an issue of California Healthline. Together, they made for one of the most memorable seven-day stretches in health policy in a long time — even if the developments mostly were overshadowed by national media stories on measles.

Why the Value-Based Proposal Is the Story To Watch

I surveyed 10 health policy experts and asked them to pick the single most important story out of last week’s potpourri of news.

Several experts touted Indiana’s Medicaid expansion as a “huge deal” (largely because of its implications for holdout states), one said the genomics initiative could be a game-changer. 

But most said the pledge to shift Medicare payments away from fee-for-service and toward value-based care is the development to watch — even if it’s still an outline at this point.

“Yes, details are missing, but Medicare reform spills over onto all payers,” says Harvard’s Amitabh Chandra. “It’s huge.”

Kavita Patel of the Brookings Institution agrees. “I thought the biggest announcement was the value-based one,” she says. “Mostly because it has been a long time since I have seen such hairy, audacious goals set by a large private payer” — and with a locked-in time commitment, too.

Under Medicare’s proposal, officials say that they want 30% of payments to flow through alternate payment models — think accountable care organizations and bundled payments — within two years, going up to 50% within the next four years. They also stressed that nearly all Medicare payment will be tied to other quality or value measures, which could be a dramatic change or just as simple as continuing pay-for-performance.

“How big a deal it is depends on whether the value payment targets get met and whether the payment changes meaningfully shift how health care is delivered,” said Larry Levitt of the Kaiser Family Foundation.

“But the simple act of setting targets means the federal government is going to work to meet them and place a greater emphasis on value-based payment. This is also going to force an important discussion of how to measure health care quality.”

The Plan Still Needs To Come Together

HHS’ lack of specificity on the plan has concerned a number of observers, who say that health officials’ pledge doesn’t count without clear details on how it’s going to work. Others, like the Leapfrog Group’s Leah Binder, warn that we don’t even know if ACOs work yet.

Still, “pageantry matters,” says Farzad Mostashari, the nation’s former coordinator for health IT and now the CEO of Aledade.

“Being convincingly committed that we’re pushing toward value” is an important signal for health care providers, he added. If hospital leaders grow worried that the fee-for-service model is on its last legs, for example, then they won’t make capital investments that help drive up the cost of spending and lead to unnecessary procedures and patient volumes.

“These are self-fulfilling prophecies,” Mostashari argues.

HHS’ plan also faces significant questions, raised by Harvard’s Ashish Jha and others, given that pushing the health care system toward “quality” may not necessarily be beneficial for patients — especially if officials still aren’t sure what “quality” in health care really is.

“The catch, of course, is that activity is easier to measure than quality,” acknowledges David Shaywitz, chief medical officer of DNAnexus. (Shaywitz has detailed this difficulty in a column for The Atlantic.)

Patel also says she’s skeptical that Medicare is ready to assume a new, different role in transforming the health system.

“CMS has not been in the business of helping clinicians go through behavior change,” she notes. “So the looming question is — now that the big goals have been set, how can they accomplish these Herculean tasks?”

Around the nation

Here’s a look at other stories making news on the road to reform.

The uneven ‘balance’ in vaccine stories. At the New York Times, Brendan Nyhan details how coverage of the measles outbreak may be reinforcing unhelpful myths and creating damaging divisions.

End-of-life pain is getting worse, not better. A new study from the Altarum Institute concludes that hospice care reform is desperately needed, Jenny Gold writes for Kaiser Health News.

Conservative-led states see rise in insurance coverage — despite ACA opposition. Politico‘s Rachana Pradhan notes that Republican officials in more than a dozen states like Florida have done very little to promote the law’s benefits, or accept funds to expand their Medicaid program, but are seeing health insurance rates surge regardless.

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Road to Reform The Health Law