Subscribe
Share
Share
Embed
Health Affairs This Week places listeners at the center of health policy’s proverbial water cooler. Join editors from Health Affairs, the leading journal of health policy research, and special guests as they discuss this week’s most pressing health policy news. All in 15 minutes or less.
Hello and welcome to Health Affairs This Week. I'm your host, Jeff Byers. We're recording on 04/02/2025. As a reminder, we have a theme issue on food, nutrition, and health coming out next week. Be on the lookout for that, and there's a virtual briefing on that theme issue on April 8.
Jeff Byers:Please join us if you can. You can find a registration link in the show notes. Relatedly, our next insider event is April 23 with Brady Post on-site Neutral Payments, and we're working on some good late spring, early summer events as well. Today, I'm joined by Michael Gerber to discuss the announcement that CMMI will cancel some alternative payment trials. Before we get into that, the biggest policy news this week probably is the series of layoffs inside HHS that began this week.
Jeff Byers:Reuters reported last week that HHS planned to cut 10,000 employees, which would ultimately equate to a reduction of about a quarter of the HHS workforce. Reuters stated that about 3,500 of these cuts would come from the FDA, two thousand four hundred at the CDC, twelve hundred at NIH, and quote, CMS less affected, unquote. Axios reported this morning in their Axios Vitals newsletter that in the immediate aftermath, health care industry players and formal federal workers say the workforce reductions will almost certainly affect drug approvals, low income assistance, disease tracking, and biomedical research once held up as the gold standard, unquote. I'm sure a lot of trade publications will have more details on this, but this is the newsletter that I opened before we began prep today. It's big news.
Jeff Byers:Perhaps we can dive into the implications at a later date and episode as more information becomes available. But with that, Michael, welcome back to the program.
Michael Gerber:Hey, Jeff. Thanks for having me.
Jeff Byers:Yeah. So the Trump administration announced this month it would cancel six alternative payment models, two of which have had yet to start. Of the four that will be canceled early, what can you tell
Michael Gerber:us about them? Yeah. Well, as you said, they they announced they canceled four models about a month ago. These include the Maryland Total Cost of Care model, the primary care first model, the making care primary model, and the end stage renal disease treatment choices model. Those models varied in how long they'd been in existence, some of them for several years now, some really were just about to get started.
Michael Gerber:And they didn't give a lot of reasons as to why, but it's not totally uncommon. The Biden administration also came in four years ago, paused some models, canceled at least at least one that the Trump administration had just created. So it wasn't a a shock at all.
Jeff Byers:The administration estimated that the program cancellations will save about 750,000,000 and stated that this will streamline the focus of CMMI models and reduce spending. How many models were there? When you're looking to health spending, how did CMMI relate to the overall federal budget?
Michael Gerber:Yeah. Great question because CMMI somewhat controversial, but really in a bipartisan way to some extent. The goal of CMMI when it was created as part of the Affordable Care Act was really to test models, specifically, really, the value based payment and that shift to value based payment. And when they finally, a couple years ago, the CBO and and CMS itself started, you know, really trying to do big evaluations of how did all these models perform over years. And that's, you know, upwards of close to a hundred models with about two dozen active now that they increased spending by about $5,000,000,000 as opposed to an expected savings of several billion dollars.
Michael Gerber:Now there are some caveats to that. Some of those that even as they increased spending, they did find some portions of those models that work that they were able to adopt in sort of regular CMS day to day activities. So CMMI itself might have increased spending, but, you know, I think as we know and as maybe some people in the current administration would say, you have to try things, you have to break things to see what works. And so even if not everything worked, a lot of people say a lot was learned that is being used to save money in other areas today. That said, the the Maryland total cost of care model is one that that was found in in the evaluations at least to save some money.
Michael Gerber:So
Jeff Byers:Yeah. Yeah. We'll we'll get into that in a second. But going back to your note of how, these kind of changes were also made in the Biden administration and when you're looking at the CBO report, is this just kind of the ebb and flow of how these trials and, like, general politics go?
Michael Gerber:Yeah. It seems it might be. Again, some of these, when they made the announcement, you know, that there's differences in how they frame it for sure. The Biden administration came in, paused some models, canceled some, although shifted that really to just slightly different variations. You know, they said they were gonna shift models, change models to align with CMS's new strategy, which in the Biden administration focused on things like health equity.
Michael Gerber:You know, no surprise that the Trump administration would not make that argument. They headlined their announcement that they were gonna focus on saving taxpayer money. So they're focused more on you know, they said canceling these models will save 700, I think, $750,000,000 right, you know, right away. You know, with each model, it was a little different. You know, with the Maryland model, yes, they canceled that, but there were already plans.
Michael Gerber:That model was, you know, already set to end in 2026 and shift to, you know, what they call the ahead model. If anything, this this announcement seemed a little less, I mean, it's still very political, but more old fashioned political than what we're seeing in a lot of other decisions, being made right now.
Jeff Byers:Yeah. Yeah. And so looking at that Marilyn model, you mentioned that it doesn't have much, life left in the trial. It's gonna transition. What has the Maryland model showed us when it comes to, like, savings and its actual model?
Jeff Byers:What has the model shown? Was it accomplished?
Michael Gerber:The evaluations, you know, say that in the first three years of the current version of the the Maryland total cost of care model saved almost $700,000,000 over three years. So, you know, not billions, but but a significant chunk of money in in one one state.
Jeff Byers:Small state.
Michael Gerber:Yeah. But the fact that it is one state and a small state also makes some people question how much can be copied from that to other states. Maryland has actually so this model, really a big part of it was these sort of global payments to hospitals where CMS and they both with Medicare and they were incorporating this with other payers, because CMS is trying to get other payers to align to make things simpler, but would just have global payments to hospitals. So we're gonna give you this much money based on, you know, our research and past trends, and that'll cover your costs for treating Medicare patients as opposed to fee for service for each individual, you know, specific service provided. So the thing is in Maryland, that dates back actually decades to the state trying similar models.
Michael Gerber:So this wasn't brand new. And I think that that also brings us, if I can, transition real quick to to broader lessons from that, is that one of the things of some of these models that had just been, like, the newest one that that the Trump administration just paused or or canceled, for example, the making care primary model was scheduled to go for ten years, which most CMMI models had not gone for that long. And some people say you really need to give it more time. So one question is if each administration every, you know, four or eight years or however, when they look at their strategy as they have the right to do and change priorities, if they're canceling models or shifting these models is how hard will it then be to evaluate whether they're successful, and how much of a challenge is that for the health systems and providers, clinicians out there who have to mean, these are not always easy. One of the biggest problems with these models is they can be hard, especially for your midsize or smaller systems or individual clinicians to have, I mean, just the paperwork sort of in the data analysis and the resources, which that was one of the things this making care primary model was supposed to address was making it easier for your individual clinicians to build up to being in the model and giving it ten years to go.
Michael Gerber:So I think that's another question of whether the whole idea of CMMI and testing these innovative models in something as big as health care and Medicare can function if every few years it changes over.
Jeff Byers:Yeah. Yeah. You bring up a a great point. I think with a lot of the I mean, I'm really just restating what you just said, where a lot of these alternative payment models have been questioned about whether they can be emulated or scaled up. While doing research for this episode, I did find that we have a lot of writings on the subject on health affairs forefront.
Jeff Byers:I didn't find as much in our journal, but some of the interesting articles were Maryland Hospital All Payer Model, Can it be Emulated? And then a lot of interesting stuff on Forefront when it comes to alternative payment models. We talked a little bit about this already, but do these cancellations or like what you just mentioned, does it tell us anything about the state of APMs or like primary care versus cost of care or saving health spending dollars?
Michael Gerber:Yeah. I think from a big picture, it it doesn't tell us a lot that we didn't already know. I think one thing one thing we're learning from it so so alternative payment models value based care, I think, has become somewhat popular bipartisan. Now you can really get in there and debate what those mean and the different models, and and then you start to, you know, find breakdowns both partisan, but also among different stakeholders, certainly physicians versus hospitals versus payers. But in general, you know, it is these models to some extent have become popular among the sort of health policy wonks who are running the show for Biden for the previous Trump administration.
Michael Gerber:So from what I read, for example, the head of CMMI one of the heads of CMMI in the first Trump administration named Brad Smith, who actually, is reportedly one of the high ups at Doge, who's making some of these layoff decisions that are impacting HHS this week, you know, is still supportive of value based payment in the between administrations, worked for some companies that, you know, are in this space. And Politico even reported that maybe that's why CMS and CMMI weren't hit as hard, it appears so far, by some of these changes because that's where he had served and and that he's still supportive. And, again, as I said, if you look at this announcement, you know, they they canceled some of these models, but they said they were shifting some to other sort of ACO or alternative payment models. They didn't cancel a lot of other models that are out there, at least not yet. And and they didn't they didn't come out and say, you know, we're against value based payment.
Michael Gerber:And, again, if if you think of value based payment as the big picture, which includes things like Medicare Advantage, so it might just mean shifting into other kinds of value based payment that might be less popular for some people and more popular for others.
Jeff Byers:Okay. Well, as we come to a close, is there anything else we should touch on with this topic?
Michael Gerber:No. I think the one thing is to you know, this announcement certainly, will affect a lot of people who, in the health care space who are in these models and who may be awaiting word on what this means for them exactly. The, again, differently than I think a lot of other things we've read from this administration, it specifically said they will work closely with the providers, clinicians, health systems impacted by this to help with the transition and that they are working on a strategy.
Jeff Byers:Yeah. And just as a quick note, I I have this in our notes. We didn't we didn't touch on this, but there looks to be about 90 models within the CMMI base. 23 of them look to be active. So kinda interesting with that just to just to scale that or put that in perspective.
Jeff Byers:Well, with that, Michael, thanks for joining us today on Health Affairs This Week. And to you, the listener, if you enjoyed this episode, please send it to the huckleberry in your life, and we'll see you next week. Thanks.
Michael Gerber:Thanks a lot, Jeff.