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Former Geisinger Executive to Head CMS Innovation Center

By John Reichard, CQ HealthBeat Editor

September 27, 2010 -- A former executive with one of the nation's leading-edge health systems is the new head of a center that one might say has the hopes of a nation riding on its shoulders—the Center for Medicare and Medicaid Innovation created by the health care overhaul law.

Named on Monday to head the Center, which is supposed to find ways to bend the rising health care cost curve, is Richard Gilfillan, a physician who ran the Geisinger Health Plan in Pennsylvania from 2005 to 2009. The plan is part of Geisinger Health System, which many health policy analysts see as a nation model for delivering quality, affordable care.

CMS Administrator Donald M. Berwick, a fervent believer that the way to lower costs is to improve quality, said he'll work closely with Gilfillan to "improve and update the nation's health care delivery systems." Berwick himself enjoys a national reputation for designing health care work processes that reduce costly—and deadly complications from surgery.

Gilfillan has experience developing "accountable care organizations," "patient-centered medical homes," and "bundled payment systems" Berwick noted in an e-mail message to CMS employees announcing the appointment.

While those terms might be dull to everyone else, they quicken the pulses of policy analysts.

Accountable care organizations (ACOs) bring together various types of providers under new payment incentives with the aim of fostering teamwork that streamlines care.

"Medical homes" are primary care practices designed to better coordinate the care of the chronically ill.

Under a "bundled payment" system, the insurer makes a single lump sum payment to a group of providers for all services related to a treatment or condition. The aim is to encourage close cooperation among practitioners to hold down costs. The lower the costs the more of the bundled payment they get to keep.

Stuart Guterman, vice president for payment and system reform at the Commonwealth Fund said in an interview that "it may well be that the innovation center is the most important part" of the overhaul law.

Without new ways to pay for health care that contain costs, "it's going to be hard to sustain broader coverage," Guterman said.

Naming a director now will help get the Center up and running Jan. 1, its start date under the law. "One way or another they need to get this center up and running," Guterman emphasized. The law specifies various innovations the Center must test in pilot programs while also giving it leeway to experiment on its own. Guterman says he expects the Center to focus on ACO payment methods in its first year.

Guterman says he hopes the Center will work closely with private insurers as part of its work in order to draw on and influence the health care system more broadly. "It's really important to align Medicare and Medicaid and private payers," he said.

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