Innovative Approaches to Healthcare Reform | April Editor’s Choice

By Samantha Cunningham | Senior Editor

Illustration by: Chloe Chan | Director of Art & Layout

In our Fall 2015 issue, writer Patrick Lin discussed two issues that persisted after the introduction of the Patient Protection and Affordable Care Act (ACA): rising costs and inadequate access to care. To address these problems, the ACA included a provision for the creation of the Center for Medicare and Medicaid Innovation (CMMI). The Center’s primary goal is to test new payment and delivery solutions via a series of pilot programs across different states. Among the largest of these programs is the Delivery System Reform Incentive Payment Program (DSRIP) in New York State. The State has allocated $6.42 billion over 5 years to fundamentally restructure health care delivery by implementing a value-based payment system, while simultaneously reducing avoidable hospitalization of Medicaid patients by 25%.1

Nearly one-third of New Yorkers are enrolled in Medicaid and it represents the single largest component of total state expenditures, accounting for nearly 30% of New York’s spending in fiscal 2015.2,3,4 DSRIP employs several unique initiatives which aim to ameliorate this increasingly significant cost, such as the Value-Based Payment Program. American healthcare providers typically utilize a fee-for-service model, where they charge insurance and patients based on the services rendered. In such a system, physicians are incentivized to increase the quantity of care delivered; they see more patients and over-utilize costly procedures.

On the other hand, a value-based payment system reimburses providers primarily based on the quality of care delivered, as measured by specific health outcomes. DSRIP’s current implementation timeline aims to use this value-based payment methodology for 90% of its managed care payments by 2020. Current DSRIP outcome metrics include “potentially avoidable (re)admissions, emergency department visits, and other potentially avoidable complications.” 5 These metrics incentivize physicians to provide thoughtful patient-centered care. A successful proof of concept in New York State would encourage other states to adopt similar payment reforms, leading to more efficient spending and improved outcomes across the nation

1. “Delivery System Reform Incentive Payment (DSRIP) Program.” New York State Department of Health
2. Bennet JD. “Why should you care about DSRIP?” Albany Business Review. 2015.
3. “Total Monthly Medicaid and CHIP Enrollment.” The Henry J. Kaiser Family Foundation.
4. “State Expenditure Report: Examining 2014-2016 State Spending.” National Association of State Budget Officers. 2016.
5. “A Path Toward Value-Based Payment.” New York State Department of Health. 2015.

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