Americans today are facing an epidemic of chronic illness, including arthritis, diabetes, and heart disease. In fact, chronic illness is now the biggest single driver of medical costs.

The Centers for Disease Control and Prevention reports that chronic diseases are the leading cause of death and disability in America. As of 2012, the last time the agency collected data, approximately 117 million U.S. adults had one or more chronic health conditions.

The challenge of effectively caring for the growing numbers of Americans suffering with these conditions, particularly as they age into retirement, is enormous.

That is why Sens. Orrin Hatch, R-Utah; Ron Wyden, D-Ore.; Johnny Isakson, R-Ga.; and Mark Warner, D-Va., have come together to address the problem.

For two years, they have closely studied the impact of the chronic illness problem, particularly as it relates to Medicare, the health program for America’s senior and disabled citizens.

Medicare is facing significant challenges from cost increases related to chronic illnesses, at a time when the program already faces many other challenges.

While a large number of factors contribute to Medicare’s rising costs—including the rapid aging of the population, the expense of newer prescription therapies, as well as the unit costs of increasingly expensive medical treatments and procedures—one cannot overlook the fact that an estimated 68 percent of Medicare recipients suffer with multiple chronic conditions.

Medicare beneficiaries who suffer from chronic illnesses, of course, disproportionately contribute to costly hospital readmissions.

Under Hatch’s leadership, the Senate Finance Committee on Thursday held a mark-up session on S. 870, the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017. The committee approved the bill by a vote of 26-0.

With 17 bipartisan co-sponsors, the bill aims to amend Title XVIII of the Social Security Act to implement Medicare payment policies designed to improve management of chronic disease, streamline care coordination, and improve quality outcomes without adding to the deficit.

The Senate legislation would largely build upon the success of Medicare Advantage, the large and growing system of competing private health plans in the Medicare program.

Today, almost one-third of all enrollees in the Medicare program are enrolled in these private health plans, and that number is projected to grow significantly.

The bill would also extend new care delivery options for the so-called “accountable care organizations” (ACOs) that currently deliver medical care in the traditional Medicare program as well.

Thus far, the ACOs have had a mixed success in delivering cost-effective care in the Medicare program. This legislative effort, focused on chronic illness, may help to improve their performance.

Hatch and his colleagues build on the potential of Medicare Advantage plans to cope with the chronic illness problem because the traditional fee-for-service Medicare program does not respond nearly as well to the growing challenge of chronic illness.

Traditional Medicare does not provide the case management and care coordination that is increasingly routine in competing private health plans in the Medicare Advantage program.

Key Objectives

The Senate legislation has several objectives.

First, it would enhance home-based and “team-based” care, particularly for senior and disabled enrollees in the Medicare Advantage “special needs plans.” These special Medicare Advantage plans are already focused on providing care for complex and difficult patient populations.

The bill also expands opportunities for telehealth.

Second, the bill would broaden opportunities for doctors and patients in Medicare Advantage to make use of advancing medical technology and the latest innovations in benefit designs and care delivery models.

For example, the bill would enable Medicare Advantage plans to offer new benefits to chronically ill patients, not as “supplemental” benefits, but as part of their regular benefit offerings.

In short, the bill would give Medicare Advantage plans more flexibility in their benefit design and reimburse them for it.

Third, the bill would amend the law governing ACOs by enabling ACO patients to see any physician of their choice, while allowing ACOs to offer incentives to patients who take advantage of preventative care services.

An Important Step

In the short term, the Senate bill would improve care delivery for the chronically ill.

The potential for improving patient care across the board would be even greater if seniors’ health plans and providers—including traditional Medicare, Medicare Advantage plans, and ACOs—were able to compete on a level playing field where information on medical prices and outcomes was fully available, and where patients exercised direct control over Medicare dollars in a defined contribution (“premium support”) program.

This bill is an important step forward in a process of improving Medicare, especially for those beneficiaries that experience chronic illness.