Posted on March 22, 2013

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Nick King, NEHI
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At NEHI Summit, he urges industry to embrace risk, accountability in their payment contracts

WASHINGTON, DC (March 22, 2013) – Medical device and drug innovators concerned about the implications of Accountable Care Organizations could take the initiative in three key ways to help ensure a sound market for their products in the new ACO world, according to Dr. Mark McClellan of the Brookings Institution.

McClellan, a former CMS administrator and one of the architects of the ACO model, said that product innovators need to better understand the outcomes impact of their products, should explore new pricing arrangements based on outcomes not volume, and should incorporate risk adjustment into their payment formulas. 

“If you really want to avoid the squeezes from fee-for-service payment systems and free up more resources for truly innovative products,” McClellan said, “the thing to do might be to actually encourage the adoption of some of these kinds of reforms by building these same kinds of accountability into your payment contracts.”

McClellan made the remarks at an ACO Innovation Summit hosted yesterday at the National Press Club by NEHI, a national health policy institute. The summit explored how the rapid growth and expansion of ACOs will impact the availability of drugs and devices, how ACOs will approach purchasing decisions for new innovations, and how innovators can work with ACOs to improve health care quality and lower health care costs.

McClellan was joined by a number of other national health care leaders, including  Elizabeth Fowler, formerly of the Obama White House and now with Johnson & Johnson; Margaret Anderson of Faster Cures/Center for Accelerating Medical Solutions; Dr. Michael S. Jellinek of Partners HealthCare; Dr. Charles Kennedy of Aetna, and Marc Malloy of the  Renaissance Medical Management Company. 


About NEHI 
NEHI is a national health policy institute focused on enabling innovation to improve health care quality and lower health care costs. In partnership with members from all across the health care system, NEHI conducts evidence-based research and stimulates policy change to improve the quality and the value of health care. Together with this unparalleled network of committed health care leaders, NEHI brings an objective, collaborative and fresh voice to health policy. For more information, visit or follow us @NEHI_News.

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