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Medicare Policies Illustrate Progress Toward a Smarter Health Care System

Learn about President Obama's progress in prioritizing higher quality patient care, coordinated care, and more efficient spending.

In December 2008 during President-elect Obama’s first transition meeting with policy advisors, he made clear that all ideas for addressing health care cost and quality should be on the table as work began in earnest on reforming the nation’s health system. At the time, the concept of “delivery system reform” was unpopular, viewed by some as “rationing” health care and by others as toothless in attacking relentlessly rising health care costs. Despite that, President Obama underscored again and again the imperative of delivery system reform -- shifting the American health care system toward one that prioritized higher quality patient care, coordinated care, and more efficient spending.

Fast forward nearly eight years later, and this shift can be seen throughout our health care system. In the 2009 Recovery Act, we made short-run investments to yield long-run gains, like health information technology (health IT), which is helping doctors and hospitals transition into the digital world and helping patients access their own medical data. In the 2010 Affordable Care Act, we included policies that not only have helped insure 20 million Americans and slow the growth in health care costs -- feats once thought impossible -- but which have catalyzed a transformation in our health care system, putting patients at the center and helping doctors, nurses, and other professionals provide the best possible care. And, these policies and the corresponding transformation are the foundation for the bipartisan overhaul of how Medicare pays physicians. The new Quality Payment Program, created by the Medicare Access and CHIP Reauthorization Act of 2015, will support and reward health care quality. Providers and patients can learn more about the program through an interactive website. Taken together, the results of these efforts equal higher quality patient care at a lower cost -- and bipartisan support for delivery system reform.

This week, we are continuing to build on this progress through the Centers for Medicare & Medicaid Services’ (CMS) final Medicare physician payment policies for next year. First, starting in 2017, Medicare will pay providers for evidence-based actions to promote behavioral health. The Psychiatric Collaborative Care Model supports mental and behavioral health through a team-based, coordinated approach involving a psychiatric consultant, a behavioral health care manager, and the primary care clinician and which extends beyond the scope of an office visit. This support is critical, given that over 35 million people with Medicare have some type of mental health or substance use disorder. 

Second, starting in 2018, Medicare will cover Diabetes Prevention Program services -- a new preventive service, at no charge to participating beneficiaries. Diabetes affects more than 25 percent of Americans aged 65 or older, and according to new data, Medicare spends approximately $7,300 or 86 percent more per beneficiary per year for someone with diabetes.  The Diabetes Prevention Program targets “pre-diabetic” individuals, those with blood sugar that is higher than normal but not yet in the diabetes range. It consists of 16 intensive core sessions of a Centers for Disease Control and Prevention (CDC)-approved curriculum in a group-based setting that provides practical training in long-term dietary change, increased physical activity, and problem-solving strategies for overcoming challenges to sustaining weight loss and a healthy lifestyle. 

Both of these new nationwide policies had their start through the ACA-created Health Care Innovation Awards. In 2011, the CMS Innovation Center launched a $1 billion challenge to support promising projects from the field. Unlike specific models that the Innovation Center also tests, the Innovation Award recipients offer a broad range of ideas to produce better care, better health, and reduced cost.  In 2012, over 100 awards were made from 3,000 applications -- including $1.9 million to Kitsap Mental Health Services in Washington State to coordinate and integrate care for CMS enrollees with severe mental illness and at least one co-morbidity and $11.8 million to the National Council of Young Men’s Christian Associations of the United States of America (Y-USA) to enroll eligible Medicare beneficiaries at high risk for diabetes in its program. Both of these demonstrations were subject to rigorous evaluations. According to a Mathematica evaluation, Medicare beneficiaries in the behavioral health integration demonstration experienced an overall reduction in Medicare expenditures and hospitalizations. According to the Department of Health and Human Services, participants in the Diabetes Prevention Program pilot lost 5 percent of their body weight, and Medicare estimates that the program saves $2,650 per enrollee over a 15-month period while improving the health of participants by helping them avoid the complications associated with diabetes.

The last eight years have shown that we are making real progress toward helping doctors and other professionals deliver the best care possible, spend our dollars more wisely, and build healthier communities. As the President said in a 2009 speech to doctors at the American Medical Association:

“We can build a health care system that allows you to be physicians instead of administrators and accountants; a system that gives Americans the best care at the lowest cost; a system that eases up the pressure on businesses and unleashes the promise of our economy, creating hundreds of thousands of jobs, making take-home wages thousands of dollars higher, and growing our economy by tens of billions of dollars more every year. That's how we'll stop spending tax dollars to prop up an unsustainable system, and start investing those dollars in innovations and advances that will make our health care system and our economy stronger.”


There is more work to do to ensure that this progress continues and reaches all corners of our nation. But it is worth noting that, by having established a system to incorporate proven prevention and coordination of care activities into Medicare, we’ve broadened access to important services for beneficiaries across the country and laid a strong foundation for continued improvements. 

Jeanne Lambrew is the Deputy Assistant to the President for Health Policy. Erin Richardson is a Senior Policy Advisor in the White House Domestic Policy Council.