September 12th, 2013
When Catalyst for Payment Reform (CPR) released its first-ever National Scorecard on Payment Reform last March, we faced some tough questions. The Scorecard revealed that just about 11 percent of payments to doctors and hospitals in this country are value-oriented, while the rest remain largely fee-for-service. CPR — a nationwide nonprofit organization led by employers and other health care purchasers committed to advancing payment reform — has an explicit goal of making 20 percent of payments tied to value by 2020.
So does 11 percent represent exciting progress? Is the 2020 goal under-ambitious?
In the three years since its inception, CPR has learned first that not all payment reforms are created equal and no one approach suits every market and situation. A deeper look into our Scorecard figures reveals that among the 11 percent of payments meeting the definition of value-oriented (supporting or reflecting quality), just 57 percent present both an upside and downside financial risk for providers. The rest — with upside potential only — may be starting in the right place but lack strong financial consequences for providers if they fail to deliver value. If the payment reform we’re counting doesn’t change provider behavior in a meaningful way and doesn’t lead to higher quality care, we could achieve our 20 percent by 2020 goal, but fail in our mission.
Second, we have learned that when it comes to payment reform, there is no magic bullet. Employers are always looking for the “it thing,” the new and exciting strategy that is going to bend their spend trend significantly. Is it the patient-centered medical home? Bundled payment? Global payment? More pay for performance? The truth is that there are many ways to advance payment reform, and the right solution is highly dependent on the dynamics of a specific health care marketplace and employee population. This is something CPR has learned by conducting its Market Assessments, looking at the characteristics of particular geographic markets.
A database of payment reform programs. It is also something about which we are hoping to learn more using our new National Compendium on Payment Reform, a searchable sortable website featuring various payment reform programs and pilots underway across the country. Entries in the Compendium are added voluntarily to the website by program “sponsors,” which are typically health plans and provider groups. A visitor to the site can search using many filters, such as: payment reform programs by name; region; type of reform; benefit design; provider type; performance measures; and evaluation.
To date, entries include examples of everything from ACOs to bundled payment pilots to pay for performance programs. So far, sponsors have been curiously shy about participating; to date the Compendium contains about three dozen entries. However, continuing to build this knowledge base is critical and provides an important resource for policymakers, employers, plans and providers searching for models to emulate, as well as for journalists and researchers.
Employer and plans in a “steady slog” together. Third, despite all the industry talk about direct contracting, health plans remain our staunch partners in this effort and a critical ally for the long haul. CPR’s purchaser members meet quarterly with the leading national plans — Aetna, UnitedHealthcare and Wellpoint — to measure and discuss progress. These plans have risen to the challenge, engaging in in-depth, complex dialogue with employers about what is working, where the barriers remain, and how to assess progress.
It hasn’t been an easy road and these questions, like how best to measure ROI, represent a complex new science. CPR recently lost Cigna as a partner in this dialogue, due to what they cited as the heavy workload and commitment required. Indeed there is no magic bullet, just a steady slog, with employers and plans working together, assessing what works, how we can measure it, and openly discussing the opportunities and challenges.
We have seen glimmers of hope from our health plan partners who have worked with providers and large employers to innovate and assess what works to improve value. These innovative models are diverse and far ranging. The plans shared details about these models and others, including the mechanics and results, with CPR’s members and other employers this summer during a webinar series on payment innovation in California. For example, in California Aetna’s Accountable Care Solutions teamed up with Sharp Community Medical Group (SCMG) to evaluate options for providing the HMO care management model to its PPO patients. The two organizations established a new ACO which allows SCMG to leverage its exceptional care management processes to benefit a broader percentage of their patient population.
UnitedHealthcare has a bundled payment and performance-based contracting program for ambulatory surgery centers in California. The model is yielding better health outcomes for patients and real savings. To address a five-fold variation in price for hip and knee replacements, Anthem Blue Cross in California worked with the California Public Employee Retiree System (CalPERS) to develop a reference pricing program that saved $5.5 million over two years. The innovative program helped guide CalPERS members in need of hip or knee replacement to hospitals that met certain quality standards and priced the procedures at or below $30,000.
The path from here. So we know there are several different ways to change how we pay for care, that the better paths forward probably involve both upside and downside risk for providers, and that plans remain our partners in this journey. But what comes next? For CPR, it is rigorous calculation and evaluation of which payment reform strategies are truly delivering value and enhancing the quality of care. A good deal of our time and focus in the coming year will be spent thinking about ROI and benchmarking the success of payment reform programs.
We can have wide varieties of payment reform programs, but at the end of the day, this effort is about improving health outcomes for patients and bending the cost trend for patients, their employers, and other purchasers — we need to know which models really do that. We’re still not sure whether our 20 percent by 2020 goal is on the mark, but we should only count payment reforms that meaningfully move us toward that goal by improving patient care and making it more affordable.
We can’t do it alone. We look forward to continuing to partner with the major national plans, and hope all plans and providers can share their efforts in our National Compendium on Payment Reform.Email This Post Print This Post
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