Payment Reform: From Distant Dream to Hard Reality
If health care payment reform once seemed a distant dream, now it’s a hard reality.
Payers and providers are fast adopting new ways of paying for care and shedding fee-for-service constraints to doing what they’ve long known to be in the best interest of patients. “It finally feels like there’s a critical mass of institutions…pointing in the right direction,” says Kelly Hall, a former adviser to the Obama administration and founder and president of Pembroke Policy Consulting.
It’s not easy. There’s no plug-and-play format or gold standard to follow. “There are as many payment reform models as there are health organizations,” said Hall, moderating a panel discussion Sunday at the annual conference of the American Association of Medical Colleges.
Yet many academic centers have shown it’s possible to transition from the traditional model that admittedly served them quite well. “They are doing bundled payments…and leading ACOs and taking capitated payments,” said Hall, introducing as examples representatives from two pioneering institutions:
University of California, San Francisco (UCSF) | Ami Parekh, M.D., J.D., Medical Director, Health Systems Innovation
UCSF is an academically-oriented, tertiary care system with a small but growing primary care footprint, says Parekh. In the past eight months it has morphed into an integrated health system, acquiring and affiliating with new hospitals and more closely aligning with those already under its wing. The system started small, adopting full risk for 5,000 city/county employees and then later expanding to take risk for its own employees. “Public and private payers are shifting how they are paying for care and we need to be prepared for it,” said Parekh who shared these words of wisdom:- In order to be successful in risk-based program, you do have to reduce your hospital days. This means sacrificing revenue. “But for volume, safety and cost reasons we don’t want patients to get care in the hospital that they don’t need to be getting in the hospital,” Parekh says. “We are often at capacity and have an aging population. So the need for beds is not going down. But lots of patients are getting care in hospitals now that could be getting care in outpatient centers and hopefully one day in their homes.”
- Freeing yourself from fee-for-service payments frees you to deliver care differently, to proble-solve. But every time you solve a problem, you discover five more things that need to be fixed. Be prepared for that.
University of Vermont Medical Center and Health Network | John R. Brumsted, M.D., President and CEO
University of Vermont Medical Center’s strategy of taking on risk has been to grow its primary care footprint through affiliation partnerships, not mergers or acquisitions. “The Federal Trade Commission won’t let us have all entities under one tent, so…we did a shared savings program, which is like accountable care on wheels,” Brumsted says. “There’s a better way to deliver care unencumbered by benefit design and rules.”Kirsten Stewart is a Senior Health Writer for University of Utah Health Sciences
