Obama’s health secretary wants to make patients healthier by transforming how doctors and hospitals get paid

As President Obama closes in on his final months in office, few parts of his legacy loom larger than the Affordable Care Act, the landmark healthcare overhaul he signed in 2010 that helped extend health coverage to more than 20 million previously uninsured Americans.

But largely out of the spotlight, Obama administration officials have labored on an equally sweeping project to transform the way America’s doctors, hospitals and other medical providers deliver care.

The foundation of this effort involves scrapping the way medicine has traditionally been paid for – a system akin to auto repair in which each service a doctor or hospital provides is billed separately, no matter how well it is performed and what the long-term outcome is.

In place of that, the Obama administration is trying to build a system that pays doctors, hospitals and others based on how their patients recover and how much their care costs.

Among the biggest advocates for this initiative is Health and Human Services Secretary Sylvia M. Burwell.


Recently, Burwell traveled to a hospital in Jacksonville, Fla., to talk about a new part of this effort – a proposal by Medicare to make all hospitals in selected metropolitan areas responsible for the quality and total cost of care for patients undergoing heart and hip surgeries, including what happens after the patients leave the hospital.

Burwell sat down with The Times to discuss the initiative, why it’s important and whether it would continue even under a President Trump.

The interview has been edited for length and clarity.

Why, when so much attention is focused on Obamacare’s insurance marketplaces, did you come to Jacksonville to talk about paying differently for medical care?

It’s frustrating. The Affordable Care Act was about so much more than coverage. Yet it’s become defined by these marketplaces, which provide coverage to just about 12 million people.

We have to broaden the concept. The increased access is tremendous, but health outcomes are the place where we have to make historic changes.

This is about health and well-being. And when you get medical care, it’s about how you experience that care and what the outcome is.

Can you play basketball again, if that is what you want to be able to do? Or, can you walk to the beach, if that is your thing?

So, by paying differently for care, the federal government can improve outcomes for patients?

Yes. Financial incentives will cause better coordination of care. That will lead to better quality and lower costs.

We already see example after example of this around the country.

Sometimes it is simple stuff. Your mom isn’t re-hospitalized because she didn’t fall at home because someone told her to move a rug in her house that she could have tripped on.

Or a physical therapist knows that a hip-surgery patient had a bad reaction to the anesthesia, so the therapist can plan differently and take the right approach with the patient.

That’s a more complex example, but it is exactly what we are driving toward.

You say better coordination will make medical care more affordable, but the opposite seems to be happening: Americans see deductibles spiking while insurance premiums continue to rise.

That’s why when I arrived at HHS, we met about delivery system reform in my first week. Because it needs to be accelerated.

The growth in premiums is slower than it has been historically, and the growth in total out-of-pocket spending is about the same. But we need to do better.

Then why not require all doctors and hospitals to participate in these new payment systems, rather than rolling them out in select parts of the country?

We have evidence from the best players that this can work. But to understand how we can scale it to the whole nation, you have to take it step by step.

Some people thought this step was too aggressive. We are trying to be as aggressive as we can.

What we are doing is creating a model for the nation.

When you look five or 10 years in the future, will all doctors and hospitals be paid in this new way?

Certainly by 2018, 50% of all Medicare payments will be linked to the value of the care that is being delivered. That was our goal. We are on that path.

And the fee-for-service system of paying for medical care will go away.

What will come in its place, I’m not sure. But the idea that doctors practice medicine based on doing individual tests or procedures will go away.

You obviously can’t talk about the presidential election, but as you look into the future, are you worried these changes could be reversed?

There is a ball that is rolling, and part of what this new proposal is about is keeping that going. The reason for that is that people do not want to go back.

I’m confident that the energy behind this is big enough that the ball is going to keep rolling.

The private sector is behind this, and medical providers want this.

I think they want to be at a place where they can practice medicine for the reasons they went into medicine.

And young people, they are all about it, especially using data and information.

So, what will keep up the momentum?

Everybody has to understand that the customer is at the center of these changes. The federal government has to understand that, too.

That is the key concept. We need to focus on outcomes and remember the people who are experiencing those outcomes.

Twitter: @noamlevey


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