$1B aimed at transforming healthcare

CMS' second round of funding targets reduced costs, population health, new clinical and financial models

Nearly $1 billion in new Health Care Innovation Awards from the Department of Health & Human Services will fund applicants that have a high likelihood of driving healthcare system transformation and delivering better outcomes. HHS Secretary Kathleen Sebelius announced this second round of funding May 15.

"These awards will continue our work to drive down healthcare costs while providing high quality care to all Americans, and I’m excited to see the innovative ideas these applicants will bring to the table," Sebelius said in a statement. "Organizations from the public and private sectors throughout the country are finding creative solutions to our healthcare system challenges and these awards will continue to stimulate these ideas."

Funded by the Affordable Care Act, the Health Care Innovation Awards are intended to fund projects that improve the quality of healthcare and bring down costs for taxpayers and patients. 

[See also: HHS awards $300M for innovation.]

The healthcare law includes many tools to avoid costly mistakes and readmissions, keep patients healthy, reward quality instead of quantity, and create health information technology infrastructure that enables new payment and delivery models to work, Sebelius noted.

She said the provisions in the Affordable Care Act are already working to reduce costs: Medicare spending per beneficiary increased by just 0.4 percent last year, far below historical averages.

In the first round last year, the Centers for Medicare & Medicaid Services awarded 107 Health Care Innovation Awards selected from nearly 3,000 applications. The projects are located in urban and rural areas, in all 50 states, the District of Columbia and Puerto Rico.

[See also: $2B carrot, 107 projects to spur innovation.]

They include The Courage Center in Minnesota, which is working to help redefine primary care for adults with disabilities. The Courage Center provides a medical home for people with traumatic brain injury and those in wheel chairs. These patients have significantly lower rates of depression and, as reported by Health Affairs, have reduced rates of hospitalization by 71 percent – from 10.8 days per year to only 3.1 days per year.

Welvie in Ohio is teaming with Anthem Blue Cross Blue Shield in Ohio to enable Medicare beneficiaries make better informed treatment decisions about surgery and their treatment options.  Since September 2012, nearly 3,500 patients have participated, with 48 percent considering surgery alternatives and 17 percent choosing less invasive options, resulting in an average savings of $7,000 for each surgery avoided.  Ninety-five percent of participants have reported high levels of satisfaction with the program.

This second round of Health Care Innovation Awards differs from the first round in that CMS is specifically seeking innovations in four areas:

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