Package cuts red tape, speeds shift to value-over-volume

December 08, 2009

(Washington, D.C.) -U.S. Senator Jeanne Shaheen, along with ten other freshmen Democratic Senators, today introduced a package of amendments that will broaden and accelerate efforts to encourage innovation and lower costs for consumers across the nation's health care system. The Freshmen Innovation and Value package, which has been endorsed by some of the nation's leading business, consumer and health provider organizations, including Business Roundtable, AARP, AFL-CIO, New America Foundation, and others.  In New Hampshire, these cost containment provisions have been endorsed by the Dartmouth Hitchcock Health System and New Hampshire Voices for Health.  The Freshmen Innovation and Value package would amend the Patient Protection and Affordable Care Act currently under consideration by the Senate. 

 "We know that more care isn't better care, that higher costs don't result in better outcomes, and that cost containment is essential to every bottom line-whether it's the bottom line of a business, a household, a hospital, or our economy," said Shaheen. "These amendments build on the cost savings measures already included in the Senate bill, and will help make our nation's health care system work more effectively."

"As a small business owner, I'm thankful to know that Senator Shaheen and her colleagues are continuing their work to find ways to lower costs and improve health outcomes in the health care system.  In particular we are excited to see that Senator Shaheen and her colleagues are submitting legislation that will invest in technology by modernizing current data collection systems and establish standards for health care financial transactions. This effort will lead to reduction of costs to our nation by identifying fraud through smart technologies and enhancing reporting tools by which key decisions will be made. This package of amendments is extremely important to containing costs that have put an undue burden on small businesses," said Scott Baetz, founder and owner of SOS Computer Services in Windham, New Hampshire.  

Shaheen worked closely with her colleagues to draft the cost savings measures in the freshmen cost containment package, and she led the charge to include provisions on Accountable Care Organizations (ACO), a concept championed by Dr. Elliot Fisher of Dartmouth.  The provision would allow ACOs - a group of providers held responsible for the quality and cost of health care for a population of Medicare beneficiaries - to work with private plans to align Medicare, Medicaid and private sector strategies for improving care.  Doing so will maximize the effectiveness of quality improvement and reform initiatives and help ensure that all Americans receive high quality care, no matter how they are insured.  And because ACO members are held jointly accountable for the care they provide, they share in any cost savings that stem from the quality gains.

"The Accountable Care Organization shared savings concept would eliminate waste, reduce overuse and misuse of care, and support the development of health systems that can deliver high quality, affordable care," said Dr. James N. Weinstein, Director of The Dartmouth Institute for Health Policy and Clinical Practice.  "From her support for shared decision-making to comparative effectiveness research and ACO's, Senator Shaheen has been a strong ally in looking for ways to reduce costs while improving care."

Shaheen worked with Sens. Mark Begich (D-AK), Michael Bennet (D-CO), Roland Burris (D-IL), Kay Hagan (D-NC), Ted Kaufman (D-DE), Paul Kirk (D-MA), Jeff Merkley (D-OR), Mark Udall (D-NM), Tom Udall (D-CO) and Mark Warner (D-VA) to complete the Freshmen Innovation and Value package.  Since Labor Day, the Senators have joined together on six occasions to deliver back-to-back Senate floor speeches on the need for commonsense health reform.

The cost containment amendments strengthen the Senate's current health reform proposal by establishing public-private arrangements to better synchronize changes across medicine, with an eye towards preventing cost-shifting to others; eliminating red tape and fighting fraud, which drives-up costs; and compelling Medicare to become a leader in overall health reform by speeding the move toward a higher-value, lower-cost model for the future.

A summary of the specific amendments follows:

Working More Closely with the Private Sector on Cost Containment


These amendments transform payment systems and require the public and private sectors to move forward together on the shared goals of cost containment, improved quality, and delivery system reform.

  • CMS Innovation Center:  We give the new Innovation Center explicit authority to work with private plans to align Medicare, Medicaid and private sector strategies for improving care.
  • Independent Medicare Advisory Board:  We broaden the scope of the new Independent Medicare Advisory Board to look at total health system spending and make nonbinding, system-wide recommendations.
  • Quality and Value in Private Insurance:  We require the Secretary to consult with relevant stakeholders to develop a methodology for measuring health plan value, which would include the cost, quality of care, efficiency, actuarial value of plans.  Developing the tools to assess health plan value will help consumers and employers make better apples-to-apples comparisons when they shop for health insurance and get the best value for their health care dollar.

Stepping-up the Commitment to Reduce Regulatory Barriers and Fight Fraud


These amendments require the U.S. Secretary of Health and Human Services (HHS) to aggressively pursue streamlined regulations and anti-fraud initiatives to ensure that all sectors of the health care system work together to improve value.

  • Administrative Simplification:  We require HHS to develop standards that will allow efficient electronic exchange and streamlining of information among patients, providers and insurers.
  • Health Care Fraud Enforcement:  We direct HHS to better utilize technology to prevent health care fraud.
  • Eliminating Legal Barriers to Care Improvement:  In tandem with this package, the freshman Senators will be requesting that the U.S. Government Accountability Office study current laws and regulations to identify barriers to implementing innovative delivery system reforms.  We also will request that the U.S. Department of Justice and the Federal Trade Commission work together to provide clearer guidance to providers who wish to enter into innovative collaborative arrangements that promote patient-centered, high quality care.

Aggressively Moving Toward Delivery System Reform


These amendments allow HHS to experiment with promising new models to further lower costs, increase quality and improve patient health.

  • Value-Based Purchasing: We require Medicare to implement pay-for-performance for more providers sooner, adding hospices, ambulatory surgical centers, psychiatric hospitals and others.
  • Broader Payment Innovation:  We allow a broader, more flexible transition to new payment models for Accountable Care Organizations (ACO).
  • Medicare System Upgrades:  We require HHS to modernize data systems so that valuable Medicare data can be shared in a reliable, complete, and timely manner.

Good Quality Everywhere:  We promote greater access to tele-health services, strengthen the provider workforce and the availability of high-quality hospital services to bolster health care access for Americans in underserved and rural regions.

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