…is to test new ways of paying for and delivering health-care services in federal health programs through pilot programs called “models.” These models are required by law to reduce costs and/or improve quality of care, which they pursue by enacting major policy changes.
That sounds like a great idea. I mean, what could go wrong when a government bureaucracy creates a think tank of sorts to experiment with payment reform? More from National Review:
Policy experts predicted that this legal mandate, combined with CMMI’s focus on evidence-based policy-making and its insulation from the daily politics of Capitol Hill, would enable CMMI to transform federal health programs. By 2016, in CBO’s previous report on CMMI, it projected that the new authorities and flexibilities given to CMMI would empower it to save $34 billion over a decade. In its new report, CBO calculated savings would be $77.5 billion from 2021 to 2030 under the same analytical methodology.
All is not well, however. The estimated savings due to innovation were always questionable, something the CBO basically admits. In a new report the Congressional watchdog now concludes the CMMI will cost money rather than save money. Joe Albanese explains:
CBO’s previous analyses were always suspect, as it was premised on an excessive faith in the wisdom of giving government officials more power. Essentially, CBO assumed that through robust empiricism and constant experimentation, CMMI would develop and expand models that saved money and modify or discard those that didn’t. Therefore, CMMI would inherently find success by virtue of its own managerial competence.
Albanese makes the case that CMMI has failed and needs reformed, saying:
Given CMMI’s disappointing performance and its power to essentially amend federal law unilaterally, it would make sense for Congress to impose guardrails on CMMI by requiring transparency for model performance, enforcing higher standards for model design and evaluation, and generally exhibiting more oversight. Given that the office’s operational funding ($10 billion per decade) far outweighs any projected gross savings, that funding should also be cut.
Something that CBO probably knows but is unlikely to say is that if any of CMMI’s models actually save money (say, by forcing health care providers to compete) stakeholders would complain to Congress and force CMS to back down.
The entire article is worth reading: Medicare Reform: Washington Central Planners Fail Again | National Review.
Also, the CBO report can be found at the following: Federal Budgetary Effects of the Activities of the Center for Medicare & Medicaid Innovation (cbo.gov)