Scor­ing progress on pay­ment re­form —what’s work­ing, what’s not—one state at a time

Modern Healthcare - - Comment - By Suzanne Del­banco

Medi­care, Med­i­caid and com­mer­cial pay­ers have made broad and sweep­ing changes to how they pay health­care providers over the past eight years, with the goal of im­prov­ing the qual­ity, ef­fi­ciency and af­ford­abil­ity of health­care. The in­dus­try is ea­ger to know if, at a macro level, these ef­forts have suc­ceeded.

Al­though eval­u­a­tions of spe­cific pay­ment re­form pro­grams have pro­duced mixed re­sults, there is enough prom­ise in each that ex­per­i­men­ta­tion will con­tinue. But as­sess­ing the im­pact of one pro­gram at a time means look­ing at a tree, not the for­est. Given how adapt­able our health­care sys­tem is, we may miss the real story un­less we also take stock of the big­ger pic­ture.

Since 2013, Cat­a­lyst for Pay­ment Re­form has fielded score­cards on pay­ment re­form that mea­sure both how much and what type of re­forms are in place. We have since added met­rics to shed light on whether pay­ment re­form cor­re­lates with im­proved qual­ity and af­ford­abil­ity across the health­care sys­tem. Lo­cal health­care im­prove­ment groups in Colorado, New Jer­sey and Vir­ginia ap­plied to pilot the new score­cards in their states and are us­ing the re­sult­ing base­line in­for­ma­tion to steer strate­gic ac­tion. We are now work­ing with a fourth state—New York—to repli­cate the score­card with re­sults ex­pected in late 2019.

While my or­ga­ni­za­tion’s score­cards do not iden­tify di­rect causal re­la­tion­ships be­tween spe­cific pay­ment meth­ods and spe­cific out­comes, they do ex­plore the re­la­tion­ship be­tween the types of pay­ment meth­ods tak­ing root and con­cur­rent changes in health­care qual­ity and cost. The suc­cess of one pay­ment re­form pro­gram may not be scal­able or may have neg­a­tive ram­i­fi­ca­tions as health­care providers seek to main­tain or max­i­mize their rev­enue. Thus, it is crit­i­cal to de- ter­mine at the sys­tem level whether this flurry of ac­tiv­ity to re­form how we pay health­care providers is lead­ing to the in­tended out­comes.

While the re­sults from the three pilot states show sig­nif­i­cant geo­graphic vari­a­tion, the states share sim­i­lar rea­sons for their in­ter­est in the find­ings, in­clud­ing:

Tra­di­tional pay­ments still dom­i­nate, de­spite the com­mon opin­ion that we must “move away from fee-for-ser­vice.” In fact, shared sav­ings and pay-for-per­for­mance—both of which are built on top of fee-for-ser­vice—are the most prom­i­nent pay­ment re­form meth­ods in all three states.

Only in Colorado’s Med­i­caid mar­ket did a no­table per­cent­age of dol­lars flow through meth­ods not based on fee-for-ser­vice, like pay­ment for “non-visit func­tions” (a catchall cat­e­gory for pay­ments in­tended to sup­port qual­ity im­prove­ments, but not di­rectly tied to the de­liv­ery of ser­vices, such as pay­ment for care co­or­di­na­tion and af­ter-hours avail­abil­ity) and bun­dled pay­ments, which ac­counted for 9.5% of to­tal Med­i­caid dol­lars in the state. Mean­while, in com­mer­cial mar­kets, bun­dled pay­ments barely fig­ure in the ac­count­ing, mak­ing up less than 1% of pay­ments.

In each of the three states, more than 1 of ev­ery 10 peo­ple re­ported for­go­ing med­i­cal care due to con­cerns about cost. A com­mit­ment to in­crease the af­ford­abil­ity of health­care for res­i­dents was at the fore­front of stake­holder re­ac­tions. Con­tain­ing costs in the Med­i­caid mar­ket is a top con­cern for pol­i­cy­mak­ers, par­tic­u­larly in states like Vir­ginia, which re­cently moved to ex­pand Med­i­caid to an ad­di­tional 400,000 Vir­gini­ans in 2019.

Na­tional av­er­ages for qual­ity of care aren’t a high enough as­pi­ra­tion. Even though New Jer­sey beat the na­tional aver­age for the per­cent­age of pa­tients with di­a­betes who had ad­e­quately con­trolled he­mo­glo­bin A1c lev­els, stake­hold­ers want to know which pay­ment meth­ods could help achieve qual­ity re­sults that are far bet­ter.

Pay­ment re­form is a means to use fi­nan­cial in­cen­tives to change be­hav­ior and potentially drive de­liv­ery re­forms that im­prove out­comes. But the jury is still out on whether it’s work­ing to im­prove care and make it more ef­fi­cient and af­ford­able. Go­ing for­ward, we need bold ex­per­i­men­ta­tion and rigorous eval­u­a­tion—of both the trees and the for­est—to fig­ure out how to get it right.●

Suzanne Del­banco is ex­ec­u­tive di­rec­tor of Cat­a­lyst for Pay­ment Re­form.

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