CMS Acting Administrator Comments before the National PACE Association

Source: CMS
CMS Acting Administrator Comments before the National PACE Association

Below are the comments as prepared for delivery of CMS Acting Administrator Andy Slavitt at the National PACE Association on April 5, 2016, @aslavitt

Good afternoon. I want to thank you for having me here and I hope you have had, and have, productive meetings here in Washington. I want to talk today about some of the essential changes for our health care system over the next number of years as we move to the next chapter of the implementation of the ACA and this is the perfect audience to do it. Six years ago, prior to the ACA, our health care system was not doing the job for the people who needed it the most.

Health care spending was growing well in excess of inflation virtually every year — and as costs continued to increase without limit, neither the quality we experienced as patients nor the quantity of people covered was getting better.

It’s not as if well-intended people weren’t working on solutions– to the contrary, in each and every quarter people were tackling part of the issue — the “quality” community; the “drug innovation sector”, the “tech” sector; health plans an array of other interventions; pilot programs and legislation here and there . . . But for all the work — the national results never improved because we couldn’t address issues or patients comprehensively as a Nation.

The passage of the ACA disrupted our trajectory as for the first time in many years there became no such things as business as usual. As a nation, we began to collectively move the health care system in a new direction. And over the last 6 years, we have begun a new chapter marked by significant gains.

  1. We started offering more people the opportunity for coverage, and the hunger was real. 20 million Americans have since gained coverage; the uninsured rate is now lower than 10% and if more states expand Medicaid, millions more would have the security of coverage.
  2. Quality outcomes have moved in larger increments than ever before. With the ACA, we used the tools to reward for higher quality outcomes, and since then, 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. 
  3. And medical cost trends are rising at their lowest level in 50 years, at the level of broader inflation measures. The CBO estimates that the ACA is coming in 25% under budget and making an impact on both deficit reduction and on the life of the Medicare Trust Fund.

What is most striking about these national improvements in cost, quality, and access to care since the ACA is that none of these measures had improved in decades. So why have we made this progress and how will it continue? I think it has as much to do with how we react to and implement the law as the law itself; how we keep pressing forward for better and better results.


While we have made tremendous progress, there is still much to be done. We know we need to make care sustainably affordable. Our commitment to quality must become imbedded and we must find ways to reach all the people that are still left behind and left out of the system. As I think about all the work left to be done… we are now trying to evolve the broader system closer toward the principles that have driven PACE for decades by treating people and their needs comprehensively, patient by patient, community by community.

That comprehensive view of care that is a hallmark of the PACE program is a strong example of what we need as a nation. As you know better than anyone, delivering care that accounts for the entire needs of the patient is not simply an operational change; it requires a different way of thinking and we need to get on that path across all sectors where a patient gets care.

So as we enter our next chapter of health care reform, there are three important ingredients that will be critical in shaping our success.

  1. First, when we say patient-centered or consumer-driven, it has to mean something that improves, empowers and engages the life of the consumer.
  2. Second, we need to support what we value. Being treated for all your symptoms is preferable to being treated one off. Your doctor’s office is preferable to an emergency room. Being treated in a comfortable setting — at home or in the community is often better than an institution. Managing a chronic conditions is preferable to neglecting it. High-priced technology or medication is no replacement for understanding and managing a patient’s needs. And prevention is best of all.
  3. And third, our moral commitment must be as strong as our financial one.

As I look at the PACE program and all that it represents, I believe you can show us the way.

The Consumer

In order to put meaning behind a truly consumer-oriented health care system, we first must have a renewed understanding for who we as a country are taking care of and what their needs are. The health care consumer is more diverse, more mobile and more demanding than ever before. CMS now serves — 140 million Americans– most on fixed or low incomes live in every type of care situation–

–they are Medicare patients leaving the hospital with five prescriptions to fill and not sure how to pay for them, but keeping them at home depends on the quality of the transition they make;

marketplace customers who have coverage for the first time and are finally be able to look after conditions they have long ignored. They will bear the cost of every inefficiency and everyone’s margins in their premiums and deductibles and will be a vital weathervane to affordability;

–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 their budgets will impact what is most personal to them;

–and they are parents of children with disabilities that require 24 hour care who spend their lives watching every dollar and interviewing every home care worker.

There are millions of us in a wide diversity of circumstances, but each of us are hoping for the same basic things from the health care system: to intersect with a care system that understands us and provides quality care; to make sure we have access to care we can afford, and when a loved one is sick, to understand what comes next and be able to get them home and productive and with as healthy a life as possible.

The great question, of course, is how we – as a country – are set up to meet those needs, particularly as our country ages, grows in diversity, and as our health needs become more complex.

On Lok

And this really hit me when I had the privilege to visit On Lok in San Francisco last year. What I saw was something familiar to you.

  • The typical person cared for is 83 and has 19 medical diagnosis
    • 59% have Alzheimer’s or dementia
  • The vast majority speaking a language other than English and
  • 90% of the patients are dually eligible.

What I saw at On Lok was a staff that was caring, a kitchen which prepared a diverse set of ethnic meals, vans that brought people in from all over the city to an array of activities, and an interaction with family caregivers in what appeared to be an extension of the family. And I thought to myself . . . wow. For our highest need patients, we can make it work. But to do so, the institutions that make up our health care system will need to compete on how best to solve real life problems for real life consumers and build real relationships. It’s a model the health plans, hospitals, clinics, and government institutions would be wise to pay attention to.

Supporting Value

It leads to my second ingredient of what’s essential in our next chapter of reform– how we support the delivery of the kind of care we want— high value and with a focus on smarter spending and keeping people healthier. To be crystal clear, it’s all of our jobs to allow us to afford all the high quality care we as Americans will need.

Nowhere is this more apparent than when I look at how we care for the elderly and how we afford the care our seniors will need.  According to the Medicare actuaries, we have extended the life of the trust fund since the ACA passed by 13 years—to 2030 by which time we will have twice the number of seniors as in 2000 and the number of Americans over 85 will double. Already people over 80 comprise a quarter of Medicare beneficiaries. And Medicare spending more than doubles between the ages of 70 and 96. Thought of another way, what a typical family may pay in taxes to support the Medicare and Medicaid programs every year may only cover half of the cost of caring for the oldest of the patients. 

How are we going to meet this national challenge? We need a new set of national solutions—not just more money.  It’s the perfect kind of challenge for our country in this next chapter. And this is where we need innovation to come in and where PACE has an opportunity to establish itself as a part of the national solution.

Our agenda is not to sit back and expect all this change to happen on its own, but to help people succeed. Secretary Burwell last year committed the federal government to change how we pay for care. We announced last month that after being entirely FFS through 2011, now over 30% of Medicare FFS payments are now linked to quality and cost outcomes on track for this to become the predominant payment system by 2018. Behind this commitment, are the actions that support the kind of care patients in this country want and deserve.

  • Investing in prevention as we now move to make community-based diabetes prevention more prevalent.
  • Linking the totality of care for a patient together for an entire episode, inpatient and out, for major treatments like joint replacements and cancer care
  • Improving reimbursements for those who demonstrate quality in everything from home health to patient care to surgical care to hospice
  • Paying physicians for something so antiquated, it’s now innovative– paying physicians to talk to patients, not just to prescribe to them, cut them or use expensive technology
  • Focusing on care coordination and population health. There are now over 475 total ACOs with 30,000 participating physicians serving 8.9 million beneficiaries, or better than one in five around the country. And, 64 representing 1.6 million people, are in 2-sided or full risk models, up from 19 just last year and zero before the ACA.
  • AND– Of course — supporting models that bring investment in care to the people who need it the most— home and community based services, dual eligible demos, and PACE.

And we have made investments to support this change – with hundreds of millions of dollars in technical support and a significant effort in simplifying and supporting integrated care delivery – we have major initiatives aligning quality measures, reducing burden, streamlining technology requests, and providing useful and near-real time data to patients and physicians.


We see payment models not as an end, but rather as a change management tool to help physicians and other clinicians increase communication, coordination and improve patient care.   Incentives alone will never be enough to make the health care system work the way we want it to. Our health care needs are too complex and too interdependent and the interests and needs of patients and the care provider community too diverse and heterogeneous. If we appeal to everyone’s self interest better, we can make a certain amount of progress. But I believe we quickly get stuck. Our next chapter must be driven by leaders with a commitment to success beyond their own organizations.

There are three commitments we need to focus on:

-Last year we released our first-ever Health Equity Plan for Medicare. We are calling for the same level of quality care delivery that are targeted at the needs of populations and are culturally-competent for all races, ethnicities, geographies, and other ethnic, sexual or gender-based minorities. This must be measured and highly transparent and we are putting forward more and better data this month as part of National Minority Health Month. As I have seen when I visited On Lok, this is something you all know how to do if we commit to it.

-Second, affordability is all of our jobs and we need to increase the affordability of medicines and emergency room benefits and the premiums we pay. Leaders around the country must seize the mantle of change to reduce unnecessary costs and unnecessary admissions; reduce waste where they see it, redesign care processes and coordinate patient care to better manage chronic disease.

-Finally, to make progress, we must be committed to overcoming barriers as they arrive and work collaboratively. Models of care – whether PACE or ACO or Medical Home -may all be in iterations of what will ultimately become the most successful models. We are still at the stage where Marketplace plans are still experimenting with how to offer benefits and networks in ways that deliver affordability to consumers, and drug companies are seeking to define and deliver value in new models. If we either give up or retrench in these early innings, we risk seeing our progress slip or becoming outmoded as new solutions develop. Which brings me to PACE.


For the many reasons I described, a locally-based, patient-centered and comprehensive commitment to patients is vital to our future. I believe PACE is a model with great promise and I want to affirm my commitment to cultivating that promise. Over the last five years, we have seen demand grow and we at CMS are committed to providing support for further growth. We are committed to proposing a regulatory update which will assist the path to growing successful. For us, this is aimed at facilitating more interdisciplinary care, increasing operational flexibility, improving access to community-based providers, and improving our enforcement processes. We issued a report to Congress last year on the topic of opening the PACE program to for-profits and facilitating conversions as appropriate. And as you heard from Tim this morning, we are working through options on the PACE Innovation Act and look forward to new opportunities to test PACE-like models for new populations.

But PACE is still a secret and in the minds of the public. The challenge is not simply to grow the program, but to define the brand by educating the public and making PACE a clear part of the solution. We need to collect and report on quality metrics so that we can demonstrate a definite proposition that more comprehensive care will led to both better outcomes and lower overall spending. We will, in concert with the NQF, be pushing aggressively on the quality agenda. This is the key to growth. Second, we need the industry to set the standard in compliance. At this still early stage in the evolution of PACE, bad apples sometimes still define the overall brand, often unfairly. And third is to create the innovation that helps manage the population challenge that we as a country are facing. The cry for high-quality patient-focused services is growing more intense for our parents and ourselves. At full potential, PACE will not only be successful but become one aspect of the solution that solve bigger and bigger portions of our national challenge.


I want to close by saying thank you for all the care you and your organizations provide to our Medicare and Medicaid beneficiaries and their families. I get to wake up every day thinking about the 140 million Americans that today rely on CMS’s programs—Medicaid, Medicare, CHIP, the health insurance marketplace. And I have a public email address so I have learned that many of them wake up every day thinking about me too. As that helps me see, and as you can see, there is a great deal of work to do and it is exciting work because we can all play a role in defining the next chapter. Even as we focus on consumer needs today, as my visit to On Lok reminded me, we need to do the work now to think about the lives of our beneficiaries over the next 20 years, and of our future beneficiaries.

With your help, this next chapter will take what we’ve started and impact people more comprehensively, while building a smarter system that can ultimately sustain our needs as a country. We need your leadership to show us the way and we at CMS are committed to working with you to get there.

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CMS Acting Administrator Comments before the National PACE Association

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