Today applications for the Center for Medicare and Medicaid Innovation (CMMI) Health Care Innovation Challenge grants are due. There is a lot of money on the table — $1 billion. And many health care organizations are in the final stages of writing detailed proposals that describe innovative programs that will add new jobs and improve the quality of Medicare and Medicaid services at a lower cost. It is huge job to prepare these applications and applicants are not paid. The proposals must provide a blueprint of how a fragmented and inefficient health care system can be transformed. And right in the middle of the grant writing process the Congressional Budget Office released an issue brief describing how difficult it is to change the health care system. The CBO report concluded that most of the past Medicare demonstrations on Disease Management, Care Coordination and Value-Based Payment have failed.
It takes leaders with vision and optimism to undertake the huge task of trying to turn the Titanic of Medicare spending around. There is definitely an opportunity to achieve success since we know that there are huge inefficiencies that result in unnecessary spending, possibly up to 30 percent of costs. We also know that quality can be improved. The CBO report found some programs succeeded in reducing costs, for example through reduced hospital admissions and bundled payments. The Innovation Challenge grants are designed to be rapidly deployed and begin improvements within six months. Hopefully this challenge will be more successful.