Last month, Federal agencies issued frameworks for improving the U.S. health care system by increasingly tying value based payments to the delivery of health care services and achieving nationwide interoperability of electronic health data, setting the stage for accomplishing these goals in an aggressive timeline over the next three years.

In a brief article published on January 26th in the New England Journal of Medicine,1 Sylvia Burwell, the U.S. Secretary of Health and Human Services (HHS), summarized HHS’s plans for improving the U.S. health care system. According to Ms. Burwell, efforts will be focused on three methods for improvement: (1) using incentives to motivate higher-value care by increasingly tying payment to value through alternative payment models; (2) changing the way care is delivered through greater teamwork and integration, more effective coordination of providers across settings, and greater attention by providers to population health; and (3) harnessing the power of information to improve care for patients.

It should come to us as no surprise that HHS intends to ramp up its efforts to tie payment for health care services provided to Medicare beneficiaries to quality and cost. Perhaps surprising to some, however, is the aggressiveness of this goal, in particular as it relates to alternative payment models ("APMs"). According to Ms. Burwell, HHS’s objective is to tie 85% of all Medicare fee for service payments to quality or value by 2016 and 90% by 2018. As part of this, by the end of 2016, 30% would be paid through APMs (such as accountable care organizations and bundled payment arrangements tied to quality and cost) and by the end of 2018, 50%.

It is estimated that currently 20 percent of the $362 billion in Medicare fee-for-service payments are made through APMs.2 According to HHS, as recently as 2011, Medicare had "made almost no" payments through APMs.3 HHS’s plan represents an aggressive 50 percent increase in that level by the end of 2016.

Oncology care, the only health care specialty that was specifically mentioned in the article, was targeted as the starting point for developing and testing HHS’ new payment models for specialty care. Last August, the Center for Medicare & Medicaid Innovation (CMMI) released a preliminary design of the Oncology Care Model,4 an initiative for alternative payment in chemotherapy services provided to Medicare fee for service beneficiaries by "physician practices furnishing chemotherapy." We could see additional APMs tested for oncology care, and will likely see similar plans for other specialty care providers over the coming year.

Four days after the publication of Ms. Burwell’s article, the U.S. Office of National Coordinator for Health Information Technology (ONC) issued its proposed plan for nationwide interoperability of electronic health data5 (the "Plan"). In the Plan, ONC outlined short term and long term goals over the next 10 years, setting 2017 as the deadline for which a "majority of individuals and providers across the care continuum should be able to send, receive, find and use a common set of electronic clinical information." 6

Under the Plan, the ONC does not expect that every health care provider will use the same software tool, nor does the ONC envision a national healthcare software platform. The ONC recognizes that there is no "one size fits all" approach and therefore seeks what is called "baseline interoperability." Baseline interoperability requires technical and policy conformance among networks, technical systems and their components in a manner that allows innovators and technologists to vary the usability in order to best meet the user’s needs based on the scenario at hand, technology available, workflow design, personal preferences and other factors. 7

Ms. Burwell’s article and the ONC Plan have now set the stage for accomplishing the Federal government’s methods for improving the delivery of healthcare in the U.S. If accomplished within the estimated timeframes, the U.S. health care system will look dramatically different in the next three years. Along those lines, healthcare providers and suppliers should expect no break in upcoming issuances of new guidelines, rules and regulations in furtherance of these interests.