Sebelius, Jain Reflect on Power of Innovation Center to Change Healthcare

Getting 20 million people health coverage for the first time through the Affordable Care Act (ACA) is no small feat. But the law’s politics may have overshadowed a more lasting effect: the power of the Center for Medicare and Medicaid Innovation (CMMI) to remake the healthcare system over time, say two people who were there at its inception.

Former HHS Secretary Kathleen Sebelius, who led the department when the ACA passed, and Sachin H. Jain, M.D., MBA, the CEO of SCAN Health who helped launch CMMI in the Obama administration, discussed the center’s missed opportunities and untapped potential during a session, “What’s Next for the ACA and Health Reform,” during Academy Health’s Datapalooza and National Health Policy Conference. The virtual event opened Tuesday and continues through Thursday.

The Shift to Payment for Value

Sebelius reminded the audience that the focus on health IT really started before the ACA passed. A part of the Recovery Act called HITECH—the Health Information Technology for Economic and Clinical Health Act—offered up to $37 billion to spur investment in health information technology and specifically into the nationwide adoption of electronic health records.

That step, Sebelius said, allowed for the data gathering led to value-based payment models and payment for performance, instead of payment for doing tasks. Before he moved to CMMI, Jain played a central role in implementing HITECH.

The law “laid the foundation for the next generation of healthcare,” Sebelius said, “Although people had talked about value-based payments and there was a lot of conversation about changing the way the government looked at health care, Medicare—which was the largest payer—and the federal government was entirely fee-for-service and entirely just paid for stuff you did. You did more stuff you got more payment.”

At that time, she said, Medicare “was disconnected from value or from outcomes that it was impossible for the private sector, for the health systems or providers to really shift into quality performance, and there was basically no payment for keeping people healthy. It was all about doing more procedures.”

Creating data systems was the first step toward paying for value, she said. “And that, I think, was one of the most revolutionary parts of what happened in those early days.”

The Best Kept Secret: the Innovation Center

The controversy and delays to get the ACA passed meant many overlooked a key tenet of the law: the creation of a government research and development center, which would have money and a testing protocol—and most of all, the authority to implement models if it found that they could be shown to have the same quality at a cost savings. This was extraordinary, Sebelius said.

“You can put them in place administratively. So, for the first time, you really had administrative authority that could change the way the system worked,” she said. “The fact that you didn't [have to] run clinical trials and then come back to Congress and get permission, because Congress always protects the status quo. They always have winners and losers they're always playing a zero sum game. All that would happen in Congress is you would just add a new payment system on top of the old payment systems and things would get more expensive. So CMMI finally broke that open."

Plus, it had a $10 billion self-funding pool, which still exists.

Jain asked whether it would have been better, in retrospect to focus the early funding rounds on fewer, more focused projects that could have been quickly brought to scale instead of funding lots of smaller pilot projects. But Sebelius, a former Kansas governor and state insurance commissioner, explained the value in sharing the wealth and creating buy-in for an entity that had just received a huge level of statutory power.

“It did give everybody a little bit of something,” she said. It was a “soft launch,” instead of “a hammer launch.”

“And I still don’t think most people know it even exists,” Sebelius said. “And that’s just fine.”

Similarities to Today

Jain pointed out that when Sebelius arrived on the job in 2009, the country was also in the midst of a pandemic, H1N1, which at the time was the first one in 70 years.

Back then, the United States devised a national vaccination campaign to deal with the outbreak. “Some of what we’re going through right now seems very familiar,” Sebelius said.

In addition, a major health bill had not been passed since the creation of Medicare and Medicaid in 1965. Sebelius felt the desire in Congress to enact new health legislation had been pent up over the years and was encouraged under the new president.

“He [Obama] was a believer and said over and over again, you can't fix the economy unless you fix healthcare and believed that, and that was really our mission,” Sebelius said.

Looking back, the former secretary said she would not have fought so hard to gain Republican support of the bill by adding amendments only to ultimately have the bill pass without any Republican votes. “If we knew we would not have Republican votes we could have moved a lot faster and had a different version of the Affordable Care Act at the outset, because we would not have tried to incorporate so broadly ideas that we thought might bring votes with them. But unfortunately, we got the ideas and not the votes,” she said.

Referring to how the politics played out, the ACA, “was really, essentially a very pro-private sector healthcare bill that ultimately got painted as something very different,” Jain said.

Touching on the challenging road ahead for President Biden’s HHS secretary nominee, California Attorney General Xavier Becerra, Sebelius endorsed the nominee’s previous defense the ACA in his home state and lauded his previous work with immigrant children, family issues, and underserved populations. “I think he is really well equipped to come into that job with a lot of experience, a lot of expertise, and knows where the administrative levers are to roll back some of the really dangerous precedent that's been put in place by the Trump administration.”

The bigger challenge, says Sebelius, will be whether the Biden administration pauses to build a bipartisan coalition or take advantage of the Senate and House majorities to quickly enact reforms. “I'm hoping they really put the gas down,” said Sebelius, “because there's an opportunity, not only to put the framework of the ACA back together, but there's a lot in this COVID-19 [relief] package that would actually enhance the affordability of health insurance. For a lot of people who qualify, it still is not affordable.”

Capping out-of-pocket costs, removing barriers to Medicaid enrollment, and more robust subsidies could all aid in improving uninsured rates that spiked as a result of the pandemic, she added. With newly proposed programs aimed at increasing health equity and public health more broadly, Sebelius hopes Biden-era policies will make it so “people will have less contact, hopefully, with the clinical side of health care and more contact with communities where they can live, and eat, and work, and breathe in, and live in a healthier fashion for longer lives.”