New Payment Paradigms Should Support Quality Care and Medical Progress

The Affordable Care Act sets up new health care payment models, including Accountable Care Organizations and bundled payment initiatives, that are intended to reform the existing Medicare fee-for-service system by rewarding health care providers for reducing costs while improving quality of care.

Manufacturers of medical devices and diagnostics support this movement toward value-based payment and integrated delivery models. Advanced technologies are key to better health and reduced costs.

But while there is great potential benefit with these new payment systems, there is also a big potential problem:  the possibility of stinting on needed care and of slowing medical progress. Policymakers can address these problems without undermining the goals of the new systems.

To address these concerns, the Centers for Medicare and Medicaid Services (CMS) should implement more extensive oversight and transparency, including full disclosure of any special payments made to practitioners for reducing costs.

CMS should also adopt transitional payment mechanisms for new technologies that hold promise for significant therapeutic improvements but add to short-term costs. Providing a temporary carve-out for the costs of important new treatments or services would help ensure patients have access to the care most appropriate to their needs. Without such a mechanism, providers who adopt these new treatments would face financial penalties. Transitional mechanisms should also be adopted to allow time for breakthrough treatments and diagnostics to be incorporated into quality measurements.

Better quality measures are also needed. The current quality measures under the new programs have big gaps and do not measure quality adequately for most complex diseases and conditions, like arthritis and cancer.

Patients expect and deserve the best health care available, and America’s medical technology industry continues to lead the world in providing the life-saving and life-enhancing treatments and cures they need. But we must act now to ensure that the new payment paradigms fulfill their promise and avoid the unintended consequences of stinting on care and undermining medical progress.

Stephen J. Ubl is president and CEO of the Advanced Medical Technology Association (AdvaMed).