My organization, Catalyst for Payment Reform, empowers employers and other health care purchasers to drive change in our health care system so that employees and other consumers receive better and more affordable health care. We do this by organizing big purchasers around a shared agenda for payment reform, providing them with the tools they need to implement it, and fostering collaboration with health insurance companies, hospitals, doctors and other stakeholders.

Yet as we focus on reforming how we pay for health care, it is vital that we address key questions involving the very consumers who receive that care: How many consumers are directly touched by payment reform? How does payment reform impact employees and consumers and their experience with care? What, if anything, do consumers need to know about payment reform?

As health plans implement a growing number of reforms to payment, these questions will only become more relevant. In 2014, our National Scorecard on Payment Reform showed a dramatic jump in the percent of commercial health care payments tied to value: 40 percent, in comparison to just 11 percent one year prior. The Scorecard also showed that 15 percent of commercial health plan members are “attributed” to a provider participating in a payment reform contract, meaning members who choose to enroll in, or do not opt out of, an accountable care organization (ACO), patient-centered medical home, or other delivery model. This means that at least one in every six commercial health plan members is touched directly by payment reform.

Although CPR’s Scorecard looked only at commercial health plans, we know a portion of individuals enrolled in Medicare and Medicaid are also attributed to providers with payment reform contracts. The continuing proliferation of ACOs and patient-centered medical homes means this percentage is likely to grow.

How Does Payment Reform Affect Consumers?

The answer is, “It depends.”  Pay for performance, for example, may be completely unknown to the consumer; the provider might earn a bonus payment for meeting quality standards, but the patient’s experience with care may not change. In an ACO setting, by contrast, the consumer’s care may be noticeably different. Ideally, the care an ACO delivers (where the payment reform may be shared savings or shared risk) is more coordinated and provides a better experience for the patient. The same holds for patient-centered medical homes, for which providers may be paid care coordination fees and share in any savings.

Medicare has significant information about how ACO patients experience care. ACOs participating in the Medicare Shared Savings Program and the Pioneer ACO Model use the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey to measure patients’ experience with care, including providers’ communication and access to care.

Last fall, a study by the Department of Health Care Policy at Harvard Medical School examined the CAHPS data and found beneficiaries served by Medicare ACOs reported improvements in timely access to care, perceived coordination of their care, and access to their medical information. And some research indicates that patients seeking care from patient-centered medical homes experience higher satisfaction (although the transition to the PCMH model can be disruptive for patients).

Non-payment policies may also play a major part in improving patient care without being on patients’ radar. A prime example of this can be found in South Carolina, where the state’s Medicaid program partnered with the largest local commercial insurer to improve birth outcomes. The state and insurer stopped paying providers for early elective deliveries, which can have negative health effects on newborns. The non-payment policy reduced early elective deliveries by 50 percent and saved millions of dollars.  Many doctors changed their practices, though the pregnant mothers they were now urging to deliver their babies at full term probably had no idea that their doctors were no longer being paid for early elective deliveries.

What Do Consumers Need To Know About Payment Reform?

At the 30,000-foot level, most consumers don’t want to know or talk about payment reform. If plans, providers, and employers do try to broach the subject with consumers, they should choose their language carefully, according to focus group research conducted for the Robert Wood Johnson Foundation (RWJF).

A report summarizing the research states:

Focus group participants made it abundantly clear that consumers do not want to think or talk about how, when or why their health care providers are paid. They have little to no knowledge about how the current reimbursement process works, and linking money or payment to their health and health care makes them uncomfortable at best, very angry at worst.

The RWJF-commissioned work also advised against using the term “value,” a term very popular with the purchasers and health plans with whom we work.

(Consumers) think of value as something they “go to a big box store for” – certainly not their doctor’s office. Anything that makes them feel that their care will be cheapened, time with their physician will be lessened, or – worst of all – that the care that they want will be curtailed, is a massive threat and not supported.

In contrast, consumers are eager for more from the health care system, especially regarding the quality of care:

Patients want to spend more time with their physicians, and they want the care they receive from different doctors to be better coordinated among them. While they are not keen to think about the role of money in their own personal health care, they are open to hearing about new methods of structuring the system if it would result in more of what they want without more cost to them.

Again, depending on the payment reform, consumers may want and need different levels of information. For consumers participating in an ACO, for example, it may be helpful to know their care is being coordinated in new ways with the goal of better quality; they may alter their own behavior to support those goals.

Payment reform may be most relevant to consumers in the context of how their own benefits are designed. For example, “You have a lower co-pay for seeing these physicians because they have proven they deliver the highest quality care.” The benefit design then drives patient volume to these providers, helping to make new payment models more palatable.

Finally, although it may not be prudent to discuss how doctors and hospitals get paid with individual consumers, it can be extremely helpful to engage consumer advocates in the creation of new payment reform programs. There have been several examples where consumer advocates and representatives have been critical to success, helping ensure new models are structured to improve the patient experience. For example, Aligning Forces for Quality communities in Humboldt County, CA; Maine; and Oregon used Patient and Family Consumer Advisory Councils, and have documented their efforts and success in a toolkit. This type of consumer involvement may grow now that Consumers Union, the policy and advocacy arm of Consumer Reports, launched the Health Care Value Hub, an online tool that facilitates networking and provides resources for consumer advocates across the country.

As we answer these questions about the impact of payment reform on consumers, it is clear they are becoming savvier about the phenomena that convince many of us reforms are needed. According to a new study by the nonprofit, nonpartisan organization Public Agenda, 71 percent of consumers do not think higher prices indicate better quality of care, and 63 percent do not think lower prices “are typically a sign of lower quality care.” At the same time, 56 percent of Americans have actively looked for out-of-pocket health care prices before getting care, including 21 percent who have compared prices across multiple providers. As the report concludes, “Americans are open to looking for better-value care.”

Clearly consumers understand the need for payment reform. Just don’t use that exact term when communicating with them directly….

Tags: Consumers