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Judith M. Persichilli
President and CEO |
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July 2010
Our nation’s health care delivery system is in need of a major overhaul. Landmark health reform legislation enacted earlier this year will help jump-start the process of change. Providers, insurers and regulators all recognize the enormity of the challenge that lies before us, and the need to make meaningful changes in the nation’s largest, most comprehensive and most costly health care program: Medicare.
Covering over 45 million elderly and disabled Americans, Medicare accounted for 13 percent of the federal budget and 22 percent of total national health care spending in 2009. The expected growth in the number of eligible beneficiaries, and the related costs to meet this growing demand for services, cannot be sustained by the current delivery model. Medicare’s Hospital Insurance Trust Fund is projected to become insolvent by 2017.
Cognizant of this looming crisis, the health care reform legislation passed earlier this year includes a directive for the Centers for Medicare and Medicaid Services (CMS) to test innovative payment and health care delivery methods that help to reduce costs while enhancing quality. The planned Center for Medicare and Medicaid Innovation (CMI) will test a series of voluntary pilot programs, including a national payment-bundling demonstration and a program allowing accountable care organizations that successfully control growth in per-beneficiary spending while meeting quality goals to share in Medicare’s savings.
As Robert Mechanic and Stuart Altman reported in the March 3, 2010 issue of The New England Journal of Medicine, a key component of the new CMI initiative includes a $10 billion appropriation for the CMI through 2019. This would “…allow the CMI to pay for services such as care coordination that aren’t covered by traditional Medicare and to support activities such as electronic data sharing, performance measurement, and quality improvement at participating health care systems.” The CMI would also encourage delivery innovation by creating alternative payment structures for organizations that are motivated to reduce clinical waste but that have been held back by the negative financial implications of doing so under fee-for-service reimbursement.
As Mechanic and Altman report, “…although pilot projects will not have much effect on national health care spending in the short run, they can encourage innovation in health care delivery by reducing or eliminating the link between service volume and provider revenue.”
What does all of this mean for Catholic Health East?
I strongly believe that CMS’s announced plans for developing a Center for Innovation presents CHE with an important window of opportunity. Often, a window of opportunity closes quickly, meaning that someone must take decisive action at the time or risk wondering what would have happened had he or she acted.
CHE is uniquely positioned to take best advantage of this window of opportunity. As evidenced by our detailed Vision 2017, we have been fully engaged and committed as a ministry to the tenets of health care reform, long before it was legislated. Many of the key goals enunciated by CMS – such as finding innovative ways to reduce costs while enhancing quality - are already shared and are being implemented by our ACT, comprehensive care management, and CareLink initiatives. And our commitment to wholistic, person-centered care is completely in synch with what is happening at the federal level.
We believe that we can position Catholic Health East as a “one stop shop” for many of CMS’s future pilots and anticipated program funding. Unlike many other, more homogenous health systems, CHE is a “real world”, geographically dispersed ministry, representing the entire spectrum of services along the health care continuum. We have teaching hospitals in urban locations, community hospitals in suburban and rural locations, and home care, assisted living, and long term care facilities located throughout the East Coast.
Based on an inventory of our existing ministry, and our plans for the future, we view a commitment to innovation as an engine for attaining our Vision for 2017. Our public commitment to innovation – through the establishment and development of CHE’s own Innovation Center - can create a competitive advantage for CHE. With our emphasis on “person-centeredness” , we can help demonstrate the efficacy and effectiveness of innovative care models that provide the right care at the right time in the right setting at the right cost.
CMS will seek models of care that place the patient/resident at the center of the care team, utilizes technology (e.g. EHRs and remote monitoring) to coordinate care over time and across settings, maintain a close relationship between care coordinators and providers, and relies on team-based approach to interventions. Do these models of care sound familiar? They should! Our PACE programs and the three care management pilot projects – at Sisters of Providence Health System, Mercy Health System of SEPA, and St. Peter’s Health Care System – all incorporate these characteristics into their models of care.
We believe that the creation of a CHE Innovation Center is the vehicle that will enable us bring our Vision 2017 to life…and “to scale.” A coordinated, system-wide effort will allow CHE to mobilize and accelerate initiatives in Person Centered Care, replicate and scale practices and programs, coordinate initiatives, accelerate and cultivate local and System-wide innovation, serve as a data repository of innovative practices, and serve as a resource for information and idea exchange.
The implementation of a CHE Innovation Center will serve as a resource for RHCs developing innovative initiatives and seeking funding opportunities, serve as a public face of real-world “demonstration/pilot” sites, partner with external organizations, identify funding possibilities, and pursue system-wide initiatives. I have asked Scott Ash, CHE’s vice president of business development, to lead this effort.
Local participation will be key to the success of the CHE Innovation Center. System office leaders will work hand-in-hand with local RHC/JOA experts to develop work plans, create replicable tool kits, prioritize and seek funding opportunities, and implement a communications plan.
Innovation is defined as “…a new invention or way of doing something.” By disrupting our “old” care models so that our future health system incorporates the best of what we have with new ways to improve health and reduce costs, we will truly become innovators.
Together, Catholic Health East can transform our communities…and ourselves. I will keep you informed on the development of the CHE Innovation Center – and what that means for your local ministry, your colleagues, your patients and residents, and your communities – as this important initiative takes shape. In the meantime, if you have any questions or suggestions, please contact Scott Ash at sash@che.org.
Sincerely yours,
Judith M. Persichilli
President and Chief Executive Officer,
Catholic Health East
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