Business & Tech

Obama official speaks out on health care industry in Boston visit

Andy Slavitt.
Centers for Medicare & Medicaid Services
Andy Slavitt.

A top Obama administration health care official stopped in Boston on Tuesday to share his thoughts on the direction of the health care industry.

Andy Slavitt is the acting administrator for the Centers for Medicare & Medicaid Services, or CMS, the agency that oversees health coverage for 140 million Americans covered by Medicare, Medicaid, and the Affordable Care Act.

He’s a government official, but Partners HealthCare chief executive Dr. David Torchiana calls Slavitt the most important person in health care. That’s because Slavitt’s agency plays a critical role in setting health care policy, with big implications for the hospital and insurance industry in Boston and beyond.

Advertisement

Slavitt spoke at the Partners-sponsored World Medical Innovation Forum, and later in an interview with the Globe. Here are a few takeaways from his remarks:

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

 Many drugs to treat conditions from hepatitis to cancer now cost tens or even hundreds of thousands of dollars per patient per year, and drug costs are rising fast. With that in mind, Slavitt said the government and the health care industry need to make medical treatments affordable for patients who need them.

“It’s an important thing for us to debate,” he said. “We have to run some experiments. We have to run some pilots. We have to figure out what works.”

 CMS is already trying some of those experiments. It is on track to change how it pays doctors and hospitals so that payments are tied to quality measures and value, and not based simply on the number of medical services performed. Slavitt summed it up this way: “If the quality outcomes are better, and it’s done at an efficient cost, then we pay more.”

Medicare and commercial insurers have started adopting these so-called alternative or value-based payments, which pay health care providers a budget for delivering care. These kinds of payments are supposed to encourage better coordination of patient care while helping to contain costs, but the results so far are mixed. Some health care providers have lost money, and others report only modest savings. But Slavitt said new payment models need more time to work.

Advertisement

“We are really in what I would consider to be generation one or maybe generation two of these models,” he said. “We are still at the learning stages.”

Slavitt compared these payment models to the evolution of the iPhone, which advanced from its earliest version to the more powerful device of today.

 The federal government has imposed numerous new health care regulations in recent years, prompting doctors to describe them regulations as time-consuming burdens that hamper patient care. Earlier this year, Slavitt acknowledged regulators have lost the “hearts and minds” of physicians. “I do think it can be won back,” he said Tuesday.

Slavitt said the way CMS pays doctors in the future will be more aligned with how doctors want to practice. He did not specify how new regulations would work.

“When you see what actually does engage physicians, which is more freedom, less control, less burden, it’s quite exciting,” he said. “They’re quite excited by these new models that accomplish that.”

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.