Aledade’s Farzad Mostashari on the Future of Value Transformation Under Trump

With the “repeal” wheels already well in motion, health leaders are eagerly awaiting any news of the administration’s “replace” plan. One of the many unknowns is how the Trump administration will handle the value-based initiatives launched by the Affordable Care Act. Here, Farzad Mostashari, MD, shares his thoughts on the future of value transformation under a Trump White House. Dr. Mostashari is well versed in both DC sports and the push to value. He previously served as National Health IT Coordinator and in 2014 he co-founded Aledade, a start-up designed to help primary care doctors participate in value-based initiatives and form Accountable Care Organizations (ACOs). Not surprisingly, he – and Aledade’s backers – remain bullish on ACOs: On January 11, Aledade announced that it raised $20 million in funding. It plans to use the investment to grow partnerships with both commercial and Medicare Advantage health plans. With this latest round, Aledade has raised a total of $55 million in funding.

Oliver Wyman Health: Broadly, what are your predictions for value transformation under a Trump administration? 

Dr. Farzad Mostashari: There remains much to be seen about the Trump administration’s healthcare plans. But I am fairly certain that the transition from a fee-for-service to a value-based health care system will continue. It has been underway for years, as a bipartisan effort, both under Democratic and Republican presidents and congressional majorities of both parties. This movement is focused on developing a health system that delivers better outcomes at a lower cost to all payers, public and private, as well as for the American people. And while people may differ on the means to get there, there is widespread agreement on the ends.

But I am fairly certain that the transition from a fee-for-service to a value-based health care system will continue.

OWH: More specifically, what does the future hold for the Medicare Shared Savings Program, and other value-focused initiatives launched by the ACA? 

FM: While there will be lots of attention paid to the repeal of “Obamacare” and dealing with the fallout in the individual insurance marketplace, there will be lots of action on the delivery side to get ready for the shift from volume to value. The commitment to this shift to value-based models extends from the provider community to both public and private payers and large employers. There will certainly be changes to specific value-based programs – as there should be to improve and refine; but generally, we expect that value-based initiatives will continue to expand in the future, with continued bipartisan support. As one Republican staffer put it, “we had pushed for value-based payment before the ACA, and we took that ball off the ACA field and ran it onto a new field, which is MACRA.” MACRA passed with overwhelming bipartisan support in both the House and Senate, and Republican leaders are fully committed to seeing its successful implementation.

OWH: What should be at the top of provider organization's MACRA to-do list?

FM: The top priority for every provider organization in my view should be figuring out how to graduate out of the MIPS track into Advanced Alternative Payment Models. One-sided ACO models do provide a measure of protection from the compliance-oriented checkbox burden of traditional “pay for performance” programs, but getting to the outcomes—better care at lower cost—that is the future. Transforming one’s practice – from adjusting workflows to utilizing technology resources – to excel in alternative payment models should be a primary focus for providers. For many independent practices, staying atomic is no longer feasible, but the question is going to be, do I join a hospital or health system, or band together with other independent practices, with the support of a partner like Aledade.

OWH: If you were asked to advise the Trump administration on the next stage of health reform, what would you ask them to focus on first?

FM: If the emphasis is on grassroots market-based solutions rather than top-down regulatory approaches, the primary focus must be on ensuring that there is competition in the provider markets. In the final MACRA rule, CMS responded to political and private sector calls to support independent physician practices. This was an encouraging – and critical – sign in an industry that has seen continuing consolidation in recent years. Recent studies suggest that small, physician-owned practices have lower average costs per patient as well as better measures in areas like preventable hospital admissions or readmissions. Furthermore, independent practices are performing better in value-based programs – such as Accountable Care Organizations (ACOs) – delivering better care at lower costs. But the wave of consolidation that has been encouraged by perverse payment policies and increased administrative burden on practices must be halted or reversed if these efforts are to succeed at scale.