By MARIE COPOULOS & MONICA NAKIELSKI
After a year of many conversations about the relationship between the climate and our health, the new rules proposed by the CMS Center for Innovation (CMMI) link value-based payment innovation and sustainability for the first time, setting an important precedent for the connection that develops in the health sector and for the system strategy.
In mid-May, CMMI proposed the first innovation model with a sustainability component, Transforming Episode-Based Accountability, or TEAM. The TEAM model is the successor to the episode-based alternative payment model and is notable for its overall mandatory payment model, although the sustainability component is voluntary. As proposed, acute care organizations that choose to participate will have the option to choose to report emissions, opening the door to receiving feedback and technical assistance. This is the first visible link between value-based payments and sustainability from CMMI, a concept test that—like all initiatives that come from CMMI—can provide measurement.
This follows a year in which emissions reporting and the intersection of climate and health in general (including thinking about the health implications of factors like heat, air, and water, or simply framing climate as a social determinant of health) have become more important. . The Joint Commission has begun offering Sustainable Health Care certification, a voluntary program. The Securities and Exchange Commission (SEC) passed a decision requiring the disclosure of carbon emissions and related risks. This SEC ruling requires Scope 1 and Scope 2 emissions reporting from all publicly traded companies, which would include many of the largest health systems. And the rule follows new reporting requirements for organizations operating in California, which require emissions reporting for organizations larger than $1B not only in Scope 1 and Scope 2, but also Scope 3 emissions and climate risk disclosures for organizations operating in excess of $ 500 million. Most hospitals and systems fall within these financial parameters. The reporting rules follow the Task Force for Climate-related Financial Disclosures (TCFD) standards, which are used by several organizations today.
The proposal and the program are still in their infancy. The SEC and California rulings are sure to be disputed and the CMMI proposal is voluntary in nature. However, there is a clear trend in climate initiatives regarding the impact on health and grappling with the role of the health industry in reducing overall emissions. CMMI’s proposed rule is important because it places the sustainability discussion in the context of health care delivery and payment innovation broadly within CMS.
This is important because sustainability initiatives need the same core success factors to deliver reforms and benefit from alignment. In fact, some of the breakthrough thinking happening in the sustainability space is built on the skill sets and experience gained in value-based payments over the past decade, including:
- Financial modeling: Sustainability investing challenges existing financial models because of the long timelines for return on investment – ​​like population health models that push preventive care over long periods of time.
- Workforce Development: In climate sustainability and adaptation (i.e. supporting more resilient health systems), new skills are needed. In value-based payment, building competencies in care management and data analysis has been a major focus over the last decade. Both these skill sets (identifying and working closely with patients at significant health risk and using data to inform that work) and current workforce completion practices set important precedents.
- Data strategy: While ESG reporting generally focuses on risk and finance, we expect to see the latest set of practices in data collection, monitoring, and measurement – ​​tapping existing data sources as the field evolves. As sustainability reporting moves beyond the financial context into strategy, there is plenty of room to take advantage of the health system’s improved data functionality for impact.
Finally, and perhaps most critically, the natural evolution of this pilot initiative is to think not only about reducing emissions, but to reduce the impact of environmental factors (such as heat and poor air and water quality) on the health of the population and in particular on patients who have abide. complex needs. Viewed in this long-term context, as a determinant of social health, it underscores the importance of connecting new payment and delivery models to this conversation. While this new proposal from CMMI is a small step in this direction, it is an important one that we hope will lead to greater participation and conversation in the health innovation space.
Marie Copoulos is the Managing Principal of Horta Health, LLC and a subject matter expert on healthcare delivery and payment reform in the Medicare and Medicaid models. Monica Nakielski is an ESG & Sustainability Advisor at Hameda Inca and an expert on sustainability and ESG efforts.
