Acting Administrator Slavitt Speech at the American Hospital Association’s Annual Membership Meeting

Source: CMS
Acting Administrator Slavitt Speech at the American Hospital Association’s Annual Membership Meeting

Acting Administrator Slavitt Speech at the American Hospital Association’s Annual Membership Meeting

Below are the prepared remarks of CMS Acting Administrator Andy Slavitt before the American Hospital Association’s annual membership meeting on May 3, 2016, @aslavitt.

Good morning. I want to thank you for having me here on what looks to be great agenda. I want to publicly acknowledge Rich for the many years of service, straight talk and advocacy. And I want to personally thank Rick for you leadership and partnership as we both began these jobs around the same time. We’re both taken this on at an interesting time.

There is so much going on in health care. Change of every type – new consumers entering the system, changing payment models, advancing technology, issues of real challenge to rural hospitals, consolidation of all types – that it’s hard to keep track of it all. Even our roles are changing – as hospitals and physicians take risk for populations and the relationship with the patient changes and extends beyond traditional boundaries.

You’re right in the center of it. So we need to communicate about our progress and yours, our goals and yours and I’ll pick out some of the salient issues this morning so you know where CMS is heading and you can be better informed about what we need to hear from you.

I hope you take away three things-

First, as I’m sure you probably heard from Denis already this morning, I want to express our gratitude for the partnership we have built as we work together to serve the American public.

Second, I hope you hear and see increased clarity and transparency on our part. You shouldn’t have to guess where we’re headed or what’s important to us. We want to create as much consistency and predictability as possible.

And third, that you view our role not simply as a policy maker, a regulator or a payer, but as an ally in helping you thrive through all this change – thrive at delivering quality care, thrive in adapting your hospitals to the emerging needs, and thrive in meeting a collective set of challenges that are endemic to our health care system and that we all need to meet head on.

We’ve made significant progress as a nation since the passage of the ACA. Six years ago, prior to the ACA, we should all remember, our health care system was stuck in a repetitive loop. 16% uninsured rate, quality not improving, costs skyrocketing. Every year. Every year we would all go to conferences to discuss and bemoan this. We’d attend the same conferences the following year. Same issues, same result. The ACA laid the groundwork for us to make gains in access to care, quality and affordability.

First, 20 million Americans have gained coverage since the start of the ACA. The uninsured rate is now below 10%. And if states that haven’t done so, expanding Medicaid will allow millions more to have the security of coverage. When people have insurance, their lives change in profound ways– from being able to access preventive care to being able to afford the prescription drugs for their chronic conditions. And there of course have been the economic effects – like reducing uncompensated care and hospital bad debt to the tune of billions of dollars.

Second, at the same time, the quality and safety of care has improved more significantly than ever before. Since the ACA has allowed us to begin rewarding for higher quality outcomes, unnecessary hospital admissions are down, 95% of quality metrics have improved nationally and hospital safety has improved by 17%, saving 87,000 lives in the process.

Third, medical cost trends are rising at their lowest level in 50 years, closely paralleling broader inflation measures, and running about half the level prior to the ACA. Affordability is paramount as we seek to cover people with pre-existing conditions, people with hourly and seasonal jobs, and new immigrant communities.

I’m not suggesting that the law, or any law, is a silver bullet. Rather, that if we implement and execute skillfully, with changes we know are good for patients, we make real progress. I know how challenging it is on a day-to-day basis – evolving our business models, changing how we collaborate and coordinate care in a community, reducing unnecessary costs and waste. But because of all your effort, we have made considerable progress over the last six years.

All of this is a good start. We have more to do to sustain and advance the progress to the point where people feel the system work better for them. Community by community, patient by patient, we need to address challenges not just to bend a curve, but frankly to break the mold of our silos, of waste we can see but is challenging to reduce, and of making sure that every American can afford to access to their medications, to the part of the system that keeps them healthy, and to the critical care that we will all inevitably need someday. Americans say health care costs are their number one financial concern so I will start there.

The Consumer

If you want to understand what defines and drives CMS, it’s as simple as this – the care and well-being of 140 million Americans in the Medicare, Medicaid, Children’s Health Insurance and Marketplace programs and the millions more who will need these programs someday. Defining how we make progress together begins with a better understanding of this consumer, most on fixed or modest incomes, who are more diverse, more mobile, more demanding and much more sensitive to the cost of care than ever before.

  • They are Medicare patients leaving the hospital with five prescriptions to fill but unsure how to pay for them. We know keeping them at home will depend on the quality of the transition they make to their own doctor and with their medication;
  • They are daughters and sons who have to make the difficult decisions on how to care for their parents who are losing their independence and need more and more assistance. They want to understand their options for both home and institutional care and how quality, staffing, cultural commitment and budgets will keep their parents healthy and independent for as long as possible;
  • They are parents with children with disabilities that require 24 hour care, who spend their lives watching every dollar and interviewing every home care worker; and,
  • They are marketplace customers who have coverage for the first time and are finally able to address symptoms they have long ignored.

These customers are our weathervane for costs as they feel – in the monthly premiums they pay each month – everything in the system that unnecessarily increases the cost to care.

There are, of course, millions of us in a wide diversity of health circumstances, but each of us are actually looking for a common set of things from the health care system: to intersect with a care system that understands us and provides reliable, quality care; to understand what comes next in the care process so we can get home and have as productive and as healthy life as possible; and increasingly, we worry about having have access to care we can afford.

So what becomes clear from understanding consumers better is that for the millions of us who work in health care, affordable care is now part of everyone’s job. While this question of affordability isn’t new, we are seeing it in a new way – through the eyes of the consumer.

We’ve talked for years about what health care would be like if consumers had a real voice in the health care system – if health care were retail like other industries. The health insurance exchanges have offered us the best insight into how consumer needs are reshaping health care. We’ve learned three things:

First, consumers are very active shoppers when they make their own decisions and unaffordable care is a deal breaker. Seventy percent of consumers changed plans during open enrollment and, those who switched, saved more than $500 a year. Where are they going? The winners are hospitals and plans that have partnered at lower overall costs.

Second, consumers prefer to shop for their health care, not their health coverage. Millions of times over, consumers on the exchange no longer shop by looking for a health plan; instead they select a hospital or physician or prescription they want, and then they see which health plan offers them.

And third, exchange customers are valuable relationships for care providers – most are previously uninsured patients who now have full benefits with no lifetime limits and often higher needs for care that span the spectrum of health care services. And many are looking to build new, solid health care relationships for their families.

With exchanges, we are moving to a world driven by highly engaged, relationship-oriented and valuable retail consumers. This means we all need to be a part of delivering access to care and reducing costs and premiums– governments with subsidies, health plans with MLR limits, and hospitals by reducing costs and passing it on to consumers. Ultimately, consumers will reward those who want their business and have an affordable strategy to get it.

Supporting Value

Access to care is one thing, but of course we want access to a system that delivers and re-enforces quality care. Our new alternative payment models are intended to recognize this and pay more for high quality care, smarter spending and care that results in healthier people.

We announced earlier this year that more than 30% of Medicare FFS payments are now linked to quality and cost outcomes. This means that more than 10 million Medicare patients are getting improved quality of care by having more time with their doctors and better coordinated care. And we are on track for alternative payment models to become the predominant payment system by 2018.

Patrick Conway will be here this afternoon to review the incredible progress over the last few years in the adoption of bundled payments, ACOs, and Medical Home models. He will also talk about the details of our newly released regulations coming out of the bi-partisan MACRA legislation. I will just touch at a high level on how we approached this critical implementation and what we hope to accomplish.


The implementation of MACRA allows us to take the next transformative step in the Medicare program, by introducing the Quality Payment Program to pay physicians and other clinicians for quality, with a more flexible approach, common-sense approach. Over the last several months, we have made an unprecedented commitment to listening to and learning from physicians and patients. We have spoken with more than 6,000 stakeholders across the country, physicians, patients, and other clinicians in a variety of local communities in order to design a proposal that is targeted to meet the needs of care delivery on the front lines.

First, the program is designed to be patient-centric by focusing on quality of care, the total care experience, and care coordination. We have reduced the number of measurements and built a lot of flexibility into the program so that the care measures selected can match the patient need as much as possible.

Next, we structured the program to be practice-driven by allowing physicians to choose their own metrics and the programs – whether the MIPS program introduced by Congress or the Advanced Alternative Payment Models that many clinicians are beginning to have experience with. MIPS is designed to be an attractive option while physicians consider ramping up over time into a variety of more advanced Alternative Payment Models. We also allow physicians who have experience with any ACOs to benefit from their experience.

Third, we have focused on simplicity wherever possible and taken what over time has become a patchwork of quality and other reporting programs and streamlined them into a single framework to reduce the burden on physician offices. Our proposal to replace Meaningful Use in the physician’s office with a new program Advancing Care Information, is an example of where we have responded to considerable feedback to move the focus from “clicking” to care provision and collaboration.

Over the next 60 days, the proposal will be available for public comment. We need meaningful engagement on this proposal and the team and I will be conducting dozens of listening sessions and educational sessions to collect feedback.

I offer one editorial comment on new payment models. We should all take a step back and recognize that all of them are at early stages. I compare them to the first and second generation iPhones, still getting their first use and allowing us to see what works and what doesn’t. We should – however – expect these models to get better and better with every release.

Our new Next Generation ACO model is a good example. It contains the features you have told us would best enable you to coordinate care, including innovative options like telemedicine, home visits, and direct patient incentive and engagement options.

We also clearly heard that hospitals want us to fundamentally re-think the benchmarking and rebasing methodologies in our Shared Savings ACO models and we published a proposed rule that reflected a lot of the input we received.  As they develop, it would be a mistake to view these models as fully calibrated incentives; rather they offer change management opportunities for the changes we all see ahead. Culture and leadership will always drive quality care; our job is to recognize it and reward it and enable investment in it.

Unfinished Business

For CMS to be successful, we must be committed to improving the lines of communication that allow us to close the gap between policy making and the realities of frontline care delivery.

CMS has significant responsibility for implementing new laws that must intersect with an already complex system with many demands. Good policy must be ultimately informed by the impact it has at the kitchen table of the American family and in the clinic or office where people seek care.

This translates into an aggressive agenda for CMS along several fronts which I want to be sure you’re aware of– simplification, rural health and interoperability.

Simplification. We must lead a simplification kick to reduce burden and give physicians back more time to spend with patients. Several years ago, we launched an initiative that is reducing regulatory burden and saving hospitals $3.2 billion over five years on burden and regulatory reduction. But we are barely scratching the surface. The work we’ve done recently over the two-midnight policy and the RAC program reflects the result of paying attention to significant feedback and is intended to create more discretion for care providers and move the RAC program from a “gotcha” feeling to a more educational and partner-oriented approach using QIOs. And we are in conversations now about finding opportunities to find ways to extend the simplifications of Advancing Care Information, the successor to Meaningful Use, into the hospital setting.

Rural health is another priority area for us. I recently announced a Rural Health Task Force to focus on short- and long-term steps to address the economics of health care in rural America, to look at access to care issues, and to make sure innovation gets driven evenly into rural America. That task force has hit the ground running and we have dedicated payment models, technical assistance funds, and provisions set up to specifically assist rural hospitals and other care providers.

We have worked with many of you and the vendors in the area of interoperability. Business models and practices that limit the flow of data and that don’t put the patient at the center must become a thing of the past. I encourage all of you to become part of our effort by using established standards and adopting contracts with vendors which doesn’t permit charges and other pernicious practices that prevent data from safely moving to where the care of the patient warrants. Together, we have made significant investments in new technology, but they will only be fully realized if Health IT becomes a connected platform for collaboration and innovation. Interoperability is a priority at the very highest levels of government.


I want to thank all of you for the work you do with Medicare and Medicaid beneficiaries every day.

I want to close by repeating the theme I hope you’ve heard from me as I laid out a very candid look at our agenda and the challenges we must all address. Success for us is helping build a better health care system for all Americans, with smarter spending, and that results in healthier people. As we move forward, we need to listen and stay close to the realities on the ground and work together with you to create new generations of solutions that work better and are simpler and reduce the distractions from patient care.

As leaders we have the opportunity to build on the record progress of the last several years and seize the mantle of delivering affordable care in this country. We look forward to doing everything we can as we work alongside in this in the months and years ahead.

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Acting Administrator Slavitt Speech at the American Hospital Association’s Annual Membership Meeting

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