GOOD OUTCOMES
Soaring costs prod state to edge toward paying for health care based on value, not volume
Soaring costs prod state to edge toward paying for health care based on value, not volume
New Mexico has begun taking the first steps toward changing the way health care is paid for — rewarding providers for good outcomes rather than just for providing services.
They’ll be getting yet more of a push under changes to the Medicaid and Medicare programs, which in New Mexico together provide coverage for more than half of the state’s residents. Insurers have also begun making changes in private plans they offer under the Affordable Care Act and in policies they sell to large employers in the state.
Changes include setting cost targets for treatments and providing incentives to providers for helping keep chronically ill patients like diabetics on a medication regime so they don’t end up needing costly hospital treatment.
Another concept the Centers for Medicare and Medicaid Services has proposed involves bundled payments, or setting a specific price for all treatment related to a procedure, such as a joint replacement, instead of the present system where providers are paid for each step of the procedure with no incentive to control prices.
Soaring health care costs have been a driving force for change. Studies by the Commonwealth Fund, a private foundation focused on health care, have shown that spending on health care in the U.S. is substantially higher than in other countrie,s but the results are worse in terms of efficiency, equity and outcomes. The nonprofit tracks health care issues and its 2014 study comparing 11 countries showed the U.S. was the most expensive, with annual percapita spending of $8,508, but ranked last. The United Kingdom spent $3,405 per capita, but ranked number one in the survey.
Cultural shift
The Centers for Medicare and Medicaid Services, the country’s largest single payer through Medicare, has been nudging providers toward change by publishing a series of road maps for a new financial model focused on the value rather than the volume of care. And earlier this year, the federal Health and Human Services Department announced a goal of linking 85 percent of traditional Medicare payments to quality or value care by the end of 2016, and 90
percent by the end of 2018.
“The challenge is, it’s a cultural change for everyone unlike anything we’ve seen before as it relates to health care,” said Patricia Montoya of New Mexico Coalition for Health Care Value and Health Insight New Mexico.
The Affordable Care Act, passed in 2010, also has helped accelerate the pace of change. It enabled CMS to revamp the way it reimburses for programs it administers, providing rewards for quality and penalties for inefficient, ineffective care. For example, CMS will reduce Medicare payments to hospitals that have high rates of hospital-acquired infections.
The ACA allowed states to expand their Medicaid programs with federal funding support and about 40 percent of New Mexicans are now covered under Medicaid. CMS administers Medicaid at the federal level and provides funding to the states to run the program at the state level.
In New Mexico, contracts to manage the state’s Centennial Care Medicaid program awarded to Blue Cross Blue Shield of New Mexico, Molina Healthcare of New Mexico, Presbyterian Health Plan and United Healthcare Community Plan of New Mexico directed them to reform their payment models, moving away from the traditional fee for service toward providing incentives for better outcomes.
Full patient picture
For Presbyterian, Molina and Blue Cross Blue Shield, change has centered around a model they call the “patient centered medical home,” an environment where patients, especially those with potentially costly chronic illnesses, get a continuum of care to help keep them healthy.
As Darcie Robran-Marques, Molina’s chief medical officer, explains, it means physicians work closely with pharmacists and clinics share information with insurance companies so they can see the patient’s entire health care picture. What tests did they have? What medications are they taking? Did they get their prescriptions filled? Do they have transportation to get to appointments? she said.
Molina and other payers have also developed financial incentives that reward providers for quality care.
Molina pays providers at clinics around the state a fixed amount per month to care for patients with complex conditions. It also provides bonuses to providers for meeting target criteria for disease management and preventive care by helping members avoid emergency room visits or hospital stays, Robran-Marques said.
“What really made this successful was regular meetings between Molina and the clinic staff to share information about the health status of the members,” she said.
For example, the insurer can share information about whether a high-risk patient has been filling prescriptions and which tests they have undergone.
Blue Cross is also making changes, according to Chief Medical Officer Eugene Sun. He said the insurer has adopted new systems of paying providers who care for its 124,000 Medicaid members. In one model, the insurer pays the provider a set monthly amount per patient for coordinating care. This ensures the provider an upfront revenue stream that will cover extra services such as phone calls to check on patients after a doctor appointment. The other new payment model includes the performance pay incentive that is often part of a corporate executive’s compensation package. Providers can earn performance pay when they ensure adult patients get certain preventive care, such as mammograms or colonoscopies, or if pediatric patients show improvement over time, Sun said.
Payment for value
Outside of the Medicare and Medicaid programs, New Mexico Health Connections, which began selling private insurance plans in 2013 through the health exchange established under the ACA, is also focused on payment for value. Health Connections pays a quality bonus for providers who meet targets on diabetic and asthma care.
And Presbyterian has implemented a cost-sharing program. Presbyterian’s contract with Intel for the clinic it operates at the Rio Rancho plant, for example, sets a monthly per-member target cost for treating employees who join the Presbyterian plan. If care costs less than the target, Intel and Presbyterian share the savings. If more, the companies share the cost.
Presbyterian, which has hospitals, clinics and medical staff, as well as a health plan, began offering free video visits to all of its 440,000 members this year. Members can access a physician on their smartphone to seek advice about things like a rash or sore throat, instead of visiting an urgent care clinic. Presbyterian contracted with an Arizona-based firm, MeMD, to provide the service, which puts patients in voice and video contact with a nationwide network of physicians. Those physicians get $25 per video visit.
Presbyterian Healthcare Services is also looking at the bundled payment concept, specifically for hip and knee replacements, which are some of the most common surgeries Medicare beneficiaries receive.