CMS & CMMI: Taking A Flying Leap

Let me start with what’s important:  The Giants are up 2 games to 1 over the Phillies in the NLCS.  I am looking forward to collecting on my bet with my partner, Joe Riley, who is a seriously misguided Phillies fan.  What the hell is that mascot anyway?  Looks like a mutant bigfoot that ran into a brick wall face first.

But back to the subject at hand.

Yesterday I had the opportunity to speak as an invited guest at a public meeting hosted by the Brookings Institution and CMS. The focus of the meeting was “Accelerating Health Care Innovation to Improve Quality and Lower Costs:  The Role of the Center for Medicare and Medicaid Innovation.”  This meeting was the sequel to a private meeting that occurred several months ago in which many people from all facets of the healthcare industry provided input and suggestions to the joint Brookings-CMS team that is defining how the Center for Medicare and Medicaid Innovation (CMMI) will set its goals, operating plans and procedures.  As you may recall from an earlier post, CMMI was established as a result of the Affordable Care Act (ACA), and its purpose is to test innovative payment and service delivery models to improve quality of care and reduce cost of care in Medicare and Medicaid.  It has been funded with $10 Billion between 2011 and 2019, giving it some serious ammunition to try new things.

At yesterday’s meeting, which was attended live by a crowd of about 200 and webcast as well, the Brookings Institution released a white paper setting forth a basic framework for CMMI.  There is still much work to be done to establish CMMI and the purpose of the meeting was to bring in people from various parts of the healthcare field to give commentary on the work represented in the white paper and to solicit further input.  The white paper and a full transcript of all the presentations from the meeting can be found here at this link.

It was a long meeting, 3 hours, with many interesting speakers and a lot of content.  I thought I would use this post to point out what I viewed as some of the most interesting comments and observations and to give a summary of some of my own thoughts about CMMI’s progress to date.  I am going to exclude a lot of the content from the meeting here in the interests of not driving you to look up cat tricks on YouTube.  While I will not represent the views of all of the speakers, it is not for lack of their having something interesting to say.  In fact, I have to say the meeting held my attention well for all three hours, despite my having arrived on a red-eye about 2 hours before it started.  My sincerest gratitude to Starbucks for triple shot lattes, is all I have to say about that.

One of the key speakers was Don Berwick, the Administrator of the Center for Medicare and Medicaid Services (CMS) and the person who ultimately owns implementation of CMMI.  He gave a great talk about the overarching goals and objectives of CMMI, stating, “There is a national sense of possibility converging with need.”  He is clearly very optimistic and also very charismatic in his description of the higher goal of CMS, which he characterized as becoming, “The major force and trustworthy partner in continual improvement of health and healthcare for all Americans.”  That’s a heck of a vision statement, and flows from his commitment to the Triple Aim concept, which is defined as a system that simultaneously achieves better care, better health and lower cost.

Short on detail but long on vision, Berwick pointed out that CMS and CMMI have the lion’s share of responsibility to implement the ACA, with about 70% of all ACA provisions falling under CMS purview.  In talking about the opportunity for innovation that he has the legislative authority to steward through CMMI and the staff he has working with him toward this objective, he paraphrased the poem “Take a Leap!”

Take a Leap!

Come to the edge, He said.

They said: We are afraid,

Come to the edge, He said.

They came.  He pushed them,

And they flew…

-Guillaume Apollinaire (French poet)

I’ve been to a lot of government meetings and you don’t often get French poetry recitals.  It was a refreshing change from the usual jargon (although there was some of that too…just to balance things out).  Berwick closed by noting that ACA is a good start, but he views it as a “trampoline,” or springboard to reinvent CMS, among other things.  Farzad Mostashari,  who is a senior executive in the Office of the National Coordinator (for Healthcare IT), later commented that healthcare information technology is the fabric in the trampoline, holding the various parts of it together.

Other items that stood out to me:

• Jason Hwang,  Executive Director of Healthcare at Innosight Institute, discussed how the innovations brought forward should not be judged against traditional “gold standards.”  He pointed out that this limits thinking about truly new ideas by forcing comparisons with things that may be well-accepted but are not necessarily relevant.  His analogy was the electric car.  Jason pointed out that one of the key reasons the electric car has not taken off in the U.S. is because people compare it to regular gas-guzzling cars that can go 0-60 in 6 seconds and drive for hundreds of miles without needing recharging.  People are simply accustomed to those “gold standards” and negatively measure electric cars against them even though such gold standards may be irrelevant to what a person might need to get to work and back efficiently.  The truly innovative approach would be to figure out where you need to drive and then determine the best way to get there, according to Jason.  An excellent parable for how CMMI needs to conduct itself, in my view.  CMMI needs to focus on the outcomes they are seeking to achieve and then be open-minded to out-of-the-box approaches to getting there.

• Polly Bednash, CEO of the American Association of Colleges of Nursing, pointed out how regulations at the state level can prevent success by limiting available options for reform and that this must be addressed to achieve CMMI’s goals.  She particularly cited the “scope of practice” laws that, in many states, prevent nurses and other professionals from performing important clinical functions while other states allow such professionals to perform a broad variety of clinical functions.  Clearly it is less expensive to use nurses or physician assistants instead of physicians to perform certain clinical activities and they can perform such functions at least as well, if not better, than the average MD.  Nevertheless, laws in many states prevent broader scope of practice activities for non-physicians because the doctor lobby wishes it so.

There are certainly other similar state-level regulations that are barriers to improving our healthcare system.  For instance, it is well-accepted that limiting health insurance physician networks to a smaller cadre of clinicians who buy into mutually agreed upon quality and cost management measures results in the delivery of better, cheaper care.  And yet many states have laws requiring that “any willing provider” be allowed to participate in health insurance provider networks, making it very difficult to create small, highly efficient provider networks capable of working tightly together as a system.  This is going to have to change if we are going to be able to direct people to providers who are able to deliver efficacious care.  Similarly, there are laws that prevent physicians from providing treatment across state lines.  This has been a major impediment to the adoption of efficient telemedicine programs.  If, for instance, a company could set up a bank of the best and brightest physicians in one location, say San Francisco, the law would have to change for that group to provide telemedicine advice to anyone outside of California even if the patient was calling from a rural location in Eastern Montana where few medical resources are available at all.

• Allan Korn, Chief Medical Officer of the Blue Cross Blue Shield Association, spoke about the importance of patient safety, particularly in hospitals, and discussed how inpatient “reimbursement” has come to mean “we will pay you after the fact no matter what has happened to the patient.”  He proposed that a new term be entered into the vernacular:  unimbursement.  “Unimbursement”, Korn stated, should be the term used when hospitals are not paid for bad care, such as when they botch a surgery or introduce an avoidable hospital-acquired infection.  A great idea and one that has already begun to be implemented around patient safety “never events.”

• Richard Gilfillan, who is the newly appointed acting (probably permanent) head of CMMI, gave some very interesting perspective on the challenges of implementing difficult, time-consuming new healthcare concepts in the age of social networking.  He discussed how speed becomes an important component in the perceived success of new concepts since the Facebook generation has become accustomed to ideas spreading in the blink of an eye.  Gilfillan also spoke about the importance of selecting applicants for CMMI funds who are fully committed to quality care delivery, not “dabblers” that are “doing a little quality on the side.”  He also stated that the CMMI wishes to adopt a “Venture Capital mindset” in the way it selects the projects it will fund.

Gilfillan’s comments were a nice complement to mine.  While I spoke about a number of issues that I will spare you from here, my main theme was the importance of attracting truly disruptive ideas and innovators to the CMMI process and that by definition this is going to exclude a lot of the usual suspects.  My advice to CMS was to beware the companies that have to tie themselves in knots to meet CMMI objectives and that traditional CMS trading partners were likely not the ones who are going to deliver that hopey changey stuff, as Sarah Palin might put it, particularly if said stuff is in conflict with the business model that is generating their current earnings per share.

Specifically, I believe that CMMI should do what it can to actively encourage participation of small innovative young companies in development and deployment of their plans.  These upstart organizations have not been integrated into the CMMI formulation process to date and that is a shame.  Far more is happening on the health system innovation front in the small private sector companies than on the traditional health insurance and hospital playground.  In fact, those big traditional companies typically have to buy their new ideas from the small new entrants, which is how VCs make their money.

And yet, small companies typically don’t show up to these government parties because it is very complicated to figure out how to work the system and it can be expensive to have a meaningful voice.  Young companies often shun government opportunities because they just don’t know where to start.  I recommended that CMMI create an ombudsman function to interact with small companies interested in participating in their process.  I also suggested that they consider creating a “small business enterprise” requirement, along the lines of the MBE/WBE (minority business enterprise/women’s business enterprise) requirements that government bids often require.  Such a requirement might give preference to any bidder that includes a small company partner in its CMMI application in order to encourage the interjection of truly innovative concepts.

In my view it is very telling that people have the greatest respect for 100+ year-old companies in the healthcare field, calling them “venerable” and worthy of trust, while in the technology world, it is the 5-15 year-old upstarts that everyone wants to rally around.  In the technology field, old companies fight to look current and fresh against Google, Twitter, and Zynga (anyone out there think that 100-year old IBM is the leader of the innovation pack? I thought not).  While there is something to be said for staying power, it is also worth noting that, as the saying goes, it is hard for a zebra to change its stripes.  Will tomorrow’s healthcare leaders be the companies we can all reel off by name today?  If any other American industry is our guide, the answer is no.

In closing, I relayed a dirty little secret of venture capital that harkens back to Jason Hwang’s gold standard cautionary tale—sometimes we hear an idea so wild that every single “leading” company we call (payer, provider, healthcare consultant, etc…) tells us that the idea is ridiculous and impossible to implement.  When everyone with a stake in the game unanimously tells us that the idea is utterly without merit, that is often a clue we are on to something good.

Knowing when to listen to the voices and when to ignore them and go in the opposite direction is the essence of the venture capital mindset that CMMI aspires to, but is antithetical to the way that government typically operates.  It is my sincere wish that CMMI can push itself over the edge and take flight into an era of profound innovation in order to catalyze a vital new healthcare economy that truly delivers on the promise of continually improving health and healthcare to all Americans.