Reducing the National deficit is a critical issue for everyone. Fundamental to addressing the deficit is tackling the rising healthcare costs. A 27.5% cut in reimbursement is looming for physicians in January 2012 while the Super Committee’s inability to reach agreement on proposed cuts may result in an automatic 2% decrease in Medicare reimbursement in 2013. However, merely reducing reimbursement rates does not address the issues that drive the increases in healthcare costs. Specifically, reducing providers’ reimbursement may not encourage providers to engage in best practice protocols that support better patient outcomes, thus, reducing readmissions in the hospitals. Likewise, reimbursement cuts may have little impact on encouraging providers to electronically exchange medical records to support clinical care coordination and minimize duplicate procedures. Instead, reimbursement cuts may deter individuals from becoming healthcare providers which reduces access to healthcare. Thus, in order to address the underlying causes of increased healthcare costs, the federal government is offering $1 Billion in grants to encourage providers to provide innovative ideas to change how healthcare is delivered.
Specifically, the Patient Protection and Affordable and Accountable Care Act created the Centers for Medicare and Medicaid Innovation (“CMI”). CMI engages in and evaluates payment and service delivery models that reduce the costs to the Medicare program while improving patient outcomes. Recently, CMI announced $1 Billion in grants that it plans to award to organizations that identify and test service and payment models that lowers the costs of care. The innovative model must be deployed within six months and the organization should establish a model that is sustainable within three (3) years. The innovative models should also develop an infrastructure to expand the delivery model that can be replicated. The proposals are also encouraged to focus upon populations that have multiple chronic conditions, mental and substance abuse issues and individuals with poor health. Likewise, the innovative models should include new ideas and methods of developing a workforce that can deliver care through the new proposed systems. Therefore, CMI is offering financial incentives to drive projects that will change the underlying foundation of how healthcare is delivered today by changing the actual infrastructure and developing a new type of workforce to provide such services.
The grants will range from $1 Million to $30 Million to organizations that include, among others, healthcare providers, public-private partnerships, community collaborations, for profit, nonprofit and faith based organizations. Organizations that develop innovative projects and desire to apply for the grant funding must submit a letter of intent by December 19, 2011 and the application is due as of January 27, 2012. The grants will be awarded by March 30, 2012.
There are numerous innovative ideas and models that have been tested in communities, between hospitals and their medical staffs, public-private collaborations, and payers and their participating providers. Now, each organization can apply for federal funding to implement, develop and expand their programs to change how healthcare services are delivered. In order to make a real impact on the deficit, the healthcare industry stakeholders must harvest their ideas and implement the projects to transform the foundation of the current healthcare delivery system. This Healthcare Innovation Challenge goes beyond changing reimbursement rates or paying providers for quality outcomes. This CMI Challenge should encourage change to some of the foundational components of the healthcare system; namely, the infrastructure, the work force and the healthcare delivery service models. More importantly, the grants will fund projects that are developed by organizations that are stakeholders in the community-wide healthcare delivery system and understand what service and payment models could have the greatest impact on the healthcare industry while improving quality outcomes. Hopefully, this Healthcare Innovation Challenge will lead to innovative and sustainable models for healthcare that reduces costs while improving patient outcomes.