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Administration Allocates $1 Billion for ‘Health Care Innovation Awards’

HHS seeks new ideas for improving care and lowering costs (May 15)

Department of Health and Human Services (HHS) Secretary Kathleen Sebelius has announced a nearly $1 billion initiative that will fund awards and evaluation aimed at delivering better health care and lowering costs. This second round of Health Care Innovation Awards will fund applicants that have a high likelihood of driving health care system transformation and of delivering better outcomes, according to the HHS.

Last year, the Centers for Medicare & Medicaid Services (CMS) awarded 107 "round one" Health Care Innovation Awards (out of nearly 3,000 applications) to organizations that are currently testing possible ways to improve outcomes and reduce costs. The projects, which are located in urban and rural areas in all 50 states, include:

  • The Courage Center in Minnesota is helping to redefine primary care for adults with disabilities. The center provides a medical home for people with traumatic brain injury and those in wheelchairs. As reported in Health Affairs, the center has reduced hospitalization rates by 71% — from 10.8 days per year to 3.1 days per year.
  • In Ohio, Welvie, LLC is teaming with Anthem Blue Cross Blue Shield to enable Medicare beneficiaries to make better-informed decisions about surgery and their treatment options. Since September 2012, nearly 3,500 patients have participated, with 48% considering surgery alternatives and 17% choosing less-invasive options, resulting in an average savings of $7,000 for each surgery avoided. Ninety-five percent of participants have reported “very high” levels of satisfaction with the program.

This second round of Health Care Innovation Awards differs from the first round in that the CMS is specifically seeking innovations in four areas: 1) rapidly reducing costs for patients with Medicare and Medicaid in outpatient hospital and other settings; 2) improving care for populations with specialized needs; 3) testing improved financial and clinical models for specific types of providers, including specialists; and 4) linking clinical care delivery to preventive and population health.

Marilyn Tavenner, CMS acting administrator, said: “Over the last 3 years, we have seen national health care cost growth slow significantly, and we want to continue that trend by helping to improve the delivery of health care by testing new models of paying for quality care, and these awards will help spur private and public sector innovation in this endeavor.”

Last year, Medicare spending per beneficiary increased by only 0.4% — far below historical averages, the HHS says.

Source: HHS; May 15, 2013.

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