Transcript Slide 1

THE
COMMONWEALTH
FUND
Developing Innovative Payment Approaches:
Finding the Path to High Performance
Stuart Guterman
Vice President, Payment and System Reform
The Commonwealth Fund
National Academy for State Health Policy
23rd Annual State Health Policy Conference
New Orleans, LA
October 6, 2010
“The country needs, and unless I
mistake its temper, the country
demands, bold, persistent
experimentation. It is common
sense to take a method and try it.
If it fails, admit it frankly and try
another. But above all, try
something.”
Franklin D. Roosevelt, 1932
THE
COMMONWEALTH
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Problems with the Current Payment System
and Goals of Reform
• Problems:
–
–
–
–
Fragmented care
Lack of coordination
Variable quality
High and rapidly-growing costs
• Goals:
– Create incentives for providers to take broader
accountability for patient care, outcomes, and resource
use
– Provide rewards for improved care coordination among
providers
– Slow growth in health spending
– Put in place an infrastructure to support providers in
improving quality and efficiency
THE
COMMONWEALTH
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Outcome
measures; large
% of total
payment
Global
Payment
Global Case
Rates
Less
Feasible
More
Feasible
Blended
FFS/Care
Management fee
Fee-forService
Care
coordination and
intermediate
outcome
measures;
moderate % of
total payment
Continuum of Rewards for
High Performance
Continuum of Payment Bundling
The Relationship Between
Payment Methods and Organizational Models
Simple process and
structure measures;
small % of total
payment
Small practices;
unrelated
hospitals
Independent Practice
Associations; Physician
Hospital Organizations
Fully integrated
delivery system
Continuum of Organization
THE
COMMONWEALTH
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Source: Adapted from A. Shih, K. Davis, S. Schoenbaum, A. Gauthier, R. Nuzum, and D. McCarthy, Organizing the U.S. Health Care Delivery System for High
Performance, The Commonwealth Fund, August 2008.
Implications for
Payment and System Reform
• There is an array of organizational models in the
health care system, and corresponding arrays of
payment approaches and approaches to
rewarding high performance
• We aren’t starting from a single point on the
continuum of organization, and we won’t end up
at one point—even high-performing, integrated
systems can be very different from each other
• There is no single ‘right’ way for care to be
organized or to pay for care
• But the results we demand from our health
system should be consistent everywhere, and
we have a right to expect that those demands
will be met everywhere
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COMMONWEALTH
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Payment Innovation in
Health Reform Legislation
• Medical home: Expansion of current Medicare
demonstration, new Medicare pilots, Medicaid
initiatives
• ACO: Broad responsibility for quality and cost
of patient care, rewards for quality, shared
savings
• Bundled payments: Medicare pilots for
hospital and post-acute care, Medicaid
initiatives
• Medicare Advantage: Rates based on plan
performance
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COMMONWEALTH
FUND
• Center for Medicare and Medicaid Innovation
Center for Medicare and Medicaid Innovation
• Beginning in 2011, Center in CMS to test innovative
payment and service delivery models to reduce
program expenditures under Medicare, Medicaid, and
CHIP while preserving or enhancing the quality of care;
current demonstration authority expanded
• Models to be selected based on evidence that they
address a defined population for which there are
deficits in care leading to poor clinical outcomes or
potentially avoidable expenditures
• Emphasis on care coordination, patient-centeredness
• Could increase spending initially, but over time must
improve quality without increasing spending, reduce
spending without reducing quality, or both
• Evaluation should include quality of care, including
patient-level outcomes, and changes in spending;
could consider cross-program impact
• Secretary could expand duration and scope if model
reduces spending without reducing quality
THE
COMMONWEALTH
FUND
Key Considerations for Successful Pilots
• Multi-payer involvement
• ‘Ground-up’ as well as ‘top-down’
development
• Array of potential models
• Flexibility in design and implementation
• Try vs. test/trust but verify
• Establish infrastructure to support success
• Work with MedPAC, MACPAC/feed into IPAB
deliberations
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COMMONWEALTH
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Improving the Process
• Transparency
• Site selection and approval
• Evaluation
• Translating pilots into policy
• Resource availability
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COMMONWEALTH
FUND
“At this point, we can’t afford any illusions:
the system won’t fix itself, and there’s no
piece of legislation that will have all the
answers, either. The task will require
dedicated and talented people in government
agencies and in communities who recognize
that the country’s future depends on their
sidestepping the ideological battles,
encouraging local change, and following the
results. But if we’re willing to accept an
arduous, messy, and continuous process we
can come to grips with a problem even of this
immensity. We’ve done it before.”
Atul Gawande, 2010
THE
COMMONWEALTH
FUND
Thank You!
Heather Drake,
Program Associate
Payment System
Reform
[email protected]
For more information, please visit:
www.commonwealthfund.org
THE
COMMONWEALTH
FUND