How MD Anderson is preparing for health reform

Since the passage of the Affordable Care Act (ACA) in 2010, we’ve heard a tremendous amount about health care reform in America. Many of the bill’s provisions take effect in 2014, so it’s reasonable to ask what MD Anderson is doing to prepare.

Since a landmark piece of legislation like the ACA has many components, there’s a lot of uncertainty about what effect different provisions will have on our patients and organization. Rather than thinking about how we’re preparing for specific aspects of the bill’s implementation, it’s probably best to think of how MD Anderson is preparing for a changing health care delivery environment.

MD Anderson’s Institute for Cancer Care Innovation focuses on demonstrating and continually improving the value of MD Anderson care for our patients. In health care, value is defined as the balance between the outcomes we achieve and the costs required to achieve them. Using that framework, let’s look at what we’re doing.  

Cancer care costs

We constantly hear that the costs of health care in America are the highest in the world, yet for many people, our health outcomes are not the best. At MD Anderson, we know that multidisciplinary, research-driven patient care offers patients the best possible outcomes, but our cost structure is extremely high. We also know that in the future it’s unlikely we’ll be paid more for our care.  

So what are we doing to control our costs? 

Throughout the organization, teams have been looking for opportunities to control costs, reduce redundancies, decrease practice variability and achieve administrative savings without adversely affecting the quality of the care we provide. We’ll grow more slowly and do more with less. We must:

Optimize the performance of clinical professionals to practice to the full extent of their education, training and licensure.

Limit the services we provide, especially those that do not have a significant effect on patient outcome.

These are huge challenges for an organization that’s had an abundance of resources and achieved tremendous growth over the past 15 years.

Cancer care reimbursement 

Currently, cancer care is paid for through America’s long-standing fee-for-service system. Every procedure and visit is billed separately through a complex and costly process. Now, we’re investigating new reimbursement systems that pay for episodes of care for specific diseases, which, in turn, provide payments to us for the defined period of time we care for a patient.

Developing such a system requires that we actually know our true costs of care delivery. We’ve partnered with Harvard Business School to develop a new cost accounting system for health care — one that actually measures exactly how much each step in the care delivery process costs. This system, called time-driven, activity-based costing, has created the framework to begin to develop models for episode-based payments as our reimbursement system gradually changes. It also provides an opportunity to identify our highest-cost processes and address them directly through performance improvement.

Cancer quality metrics

To constantly improve, we must measure the outcomes of our care. The Affordable Care Act mandated that we measure and report cancer metrics by 2014.

We’ll do that, and we’ve taken this a step further. We’re developing programs to better understand which outcomes of care are really important to our patients, and how we can develop measurement systems to report them internally for improvement and externally for others to see.

We’re conducting patient focus groups to ask them which outcomes are important, and how they want to receive this information. Our ultimate aim is to demonstrate the best patient-centered care at the lowest possible cost.

In addition to the Institute for Cancer Care Innovation, there are many 
MD Anderson teams involved in our preparations.

• Governmental Relations monitors legislative activities in Washington and Austin and provides expert opinion as needed.
• Health Policy is engaged in our state activities, including changes to the Medicaid program and cancer control.
• Teams in clinical operations, especially Performance Improvement, have been identifying opportunities to improve patient flow through our system.
• Clinical Cancer Prevention has been preparing to handle the increased number of patients who will have cancer prevention and screening available to them through prevention provisions of the ACA.

The bottom line is that while the ultimate fate of the act is uncertain, the need for health reform is real, and we’ll be affected over the coming five to 10 years. We must find ways of making more effective use of our existing resources to continue Making Cancer History®.