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Controlling Costs While Improving Care

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NORC uses an innovative mixed-methods approach to evaluate cutting-edge health care models. We collect and analyze both quantitative and qualitative data from patients’ and providers’ experiences to get the whole picture.

Shriram Parashuram, Principal Health Economist
Health Care

Americans spent about $3.65 trillion on health care in 2018, by far the highest level of spending in the developed world. This figure is 4.4 percent higher than spending in 2017, and it will certainly increase through 2020. Despite these spending levels, about 40 percent of Americans reported skipping a recommended medical test or treatment, and 44 percent said they didn’t go to a doctor when they were sick or injured in the last year because of cost, according to a national poll NORC conducted with the West Health Institute.

Both federal and state policymakers are working on lowering costs while maintaining or improving the quality of care patients receive. NORC has stepped in to evaluate a variety of models for payment and delivery reform, generating results that are shaping the contours of the debate.

Our flagship health care evaluation project is an evaluation of the Next Generation Accountable Care Organization (NGACO) program, a Medicare payment model that launched in 2016 and will continue through 2022.

The NGACO program offers financial incentives to providers who collaborate with the aim of improving quality and containing costs for Medicare fee-for-service enrollees.

The Center for Medicare & Medicaid Innovation at the Centers for Medicare & Medicaid Services (CMS) asked us to assess the performance of three NGACO cohorts—2016, 2017, and 2018—over multiple years. Our evaluation describes features of accountable care organizations (ACO) and providers; examines implementation across ACOs; estimates the NGACO model’s impact on cost of care and measures of utilization, quality, and beneficiary health; and identifies variations in the model’s impact across ACOs.

At the state level, we are evaluating the Vermont All-Payer Accountable Care Organization Model (VTAPM), which aims to improve statewide health care spending, population health outcomes, quality, and value by aligning payment structure and incentives across payers. The VTAPM has created multiple layers of accountability so that providers are accountable to insurers, insurers are accountable to the state, and each shareholder works to meet specific goals in order to ensure the model’s success.

For another state-based project, NORC led a team advising the Alaska Healthcare Transformation Project on next steps in health care reform for the state, focusing on the goals of reducing the per capita costs of care across multiple payers, advancing health care delivery, and improving population health. With our academic partners in the state, we conducted a meta-analysis of recent studies on delivery system and payment reform in Alaska, a historical scan of health reform experiments in the state since 2008, a national scan to develop case studies and lessons learned from states that implemented delivery system reforms of interest to Alaska, and an assessment of cost drivers and spending in the state to inform a roadmap for future innovations.

The Medicaid Innovation Accelerator Program (IAP) gives state Medicaid agencies resources and technical support to expedite Medicaid-focused payment innovations. Through CMS’s IAP, NORC leads a team that has provided technical support to 20 state Medicaid agencies in designing, developing, and implementing value-based payment approaches.