Today’s Managing Health Care Costs Number is Four
Catalyze Payment Reform,an employer and purchaser non-profit established to promote health care payment reform to improve value, just published a tool kit to evaluate the effectiveness of health care payment reforms. Executive Director Suzanne Delbanco has a blog post about this at Health Affairs.
The toolkit poses four basic questions:
1. Did the program reduce health care spending in relationship to the trend, or at least keep the trend flat?
2. Did quality of care improve, or at least stay the same?
3. Was consumer feedback positive, or at least neutral?
4. Is the program feasible to implement, replicate, scale, and maintain over time?
It’s an important time for this work – there is enormous (and positive) ferment in the world of provider reimbursement, with Medicare and health plans seeking to move a majority of their payments into “value based” frameworks in the next few years. But simply moving to a value based framework doesn’t mean that more value will be delivered. Here are some examples of how value based payments might inadvertently lead to lower value:
· A health plan pays a disparate group of physicians to become a “patient centered medical home.” They check the boxes to qualify for the payment, but make few or no changes to their actual practice. Extra money has been paid, and no extra quality or access or value has been created.
· A health plan or purchaser offers many different provider organizations an “accountable care organization” contract that includes up front payments and upside only risk sharing where the provider organization receives a portion of the “surplus” if they are under budget and meet quality targets. Some provider organizations take the up front payment, don’t change their processes, and is happy if they “win” by randomness, but has no accountability if costs are higher than budgeted of if quality goals are not attained.
· A purchaser arranges a direct contract with a provider group, but the cost targets include excessive medical inflation, guaranteeing a “shared savings” payout for savings that do not reflect actual performance.
Changing payment will be important to drive better value in health care – but it’s not enough. We need committed leadership on the provider side. We need a large enough portion of revenue in “value based” contracts to overcome the perverse financial incentives in fee for service that can doom operational reform. We need an abiding belief that payment reform is here to stay, and it’s worth changing organizational processes that have served hospitals and physicians well for decades. We also need measurement, because well-intentioned payment reform deliberately designed by the nation’s experts won’t always have the impact we expect.
The CPR efforts are an important component of the measurement necessary to be sure that payment reform genuinely offers us greater value, and helps improve the financial performance of providers who are genuinely committed to improving health care value.
Disclosure: I serve on one of CPR’s technical expert panels.
