CMS and Health Care Innovation


Today’s May 21 New England Journal of Medicine contains 2 pro-government innovation articles.

One, R.Rajkumar, M.D, et al, “The CMS Innovation Center- A Five-Year Self-Assessment, “ from the Centers for Medicare and Medicaid Services, Baltimore, which says CMS “will continue working to contribute to U.S. achievement of the goals of better care, smarter spending, and healthier people.”’

Two, L. Casalino, M.D, and Tara F. Bishop, M.D., “Symbol of Health System Innovation? Assessing the CMS Innovation Center,” from the Department of Healthcare Policy Research, Weill Cornell Medical College, New York, which ends, “The annual $1 billion appropriated for CMMI (Center of Medicare and Medicaid Innovation) represents an infinitesimal fraction of the $3 trillion that the United States spends every year on health health care. At that price, CMMI looks like a good investment.”

As evidence of the success of CMMI, the first article cites these examples

$3.724 savings on average for a 90 day post-surgery episode of hospital orthopedic surgery in 4th quarter of 2013 for bundled payments.

2% gross savings for a comprehensive primary care initiative based on reduction in hospitalizations, ER visits, and 30-day readmissions.

$184 million in savings according to independent evaluation and $385 million in risk-adjusted savings for Accountable Care Organizations (ACOs) in Pioneer ACO Model.


Through 2013, 1.3 million “harms” were prevented and $12 billion and 50,000 lives were saved due to the synergistic model called “Partnership for Patients.”


These examples summarize CMS efforts to save costs and lives through bundled payments, primary care initiatives, ACOs, and partnerships with patients. These are said to be only 4 of the 26 models launched by the CMS innovation centers and are in their early stages of development. Not mentioned are the costs of these “innovations,” clinicians installing electronic health records and converting to ICD-10 coding. Savings may be "infinitetesmal" for government but not for clinicians.

I suppose we ought to be impressed by these articles, but I am reserving judgment. Innovations come in all forms –electronic, organizational, communicative, and technological, but most innovations stem from the private not the government sectorsl

We also ought to look at the government track record. It does not have a sterling reputation for innovation. Instead it is noted for its sprawling inefficiciencies and expanding bureaucracies. Government is poor at innovation because.

It cannot manage failure.


It seldom abandons a project.


It is not gambling with its own money.


Its success is measured in good intentions, not results.


It succeeds by growing too big to fail and too influential to stop.


It can’t go out of business, can print money to keep on going, and is propped up by taxpayer money.