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Suzanne Delbanco, Ph.D.Executive Director, Catalyst for Payment Reformc/o PBGHFebruary 21, 2012
California Health Benefit Exchange Board:Private Purchaser Strategies
Big Picture
www.catalyzepaymentreform.org
TWO STRATEGIES
Creating the Environment• Coordinating the ask• Understanding the value
and cost of care
Implementing reforms• Align payment to the
evidence• Value-oriented payment
and benefit design• Enhancing primary care
through payment
The health care payment systems of the status quo continue to drain the value out of the care we buy.
• Only about 1% of payments to doctors and hospitals are tied to performance
• The system is failing in safety and quality
• Factors that have nothing to do with quality and value are driving up health care costs
February 21, 2012 1
Creating the environment #1: Coordinating the ask on payment reform
www.catalyzepaymentreform.org
Topics include• Value-oriented payment• Transparency • Market competition and
consumerism • Alignment with Medicare• Oversight of ACOs• Evaluating Results
Health Plan RFI Questions
Model Contract Language
GOALS
• Define a shared purchaser agenda
• Send clear signals and create business case for health plans
• Lead to better quality and lower costs for all
• Reduce opportunities for cost shifting
February 21, 2012 2
Creating the environment #2: Understanding Value and Cost of Care
February 21, 2012www.catalyzepaymentreform.org 3
Information must be available to understand and compare the quality, cost, patient experience, etc., among providers in the network.
Key elements
1. Provider Background
2. Quality performance
3. Efficiency 4. Price of services5. Volume6. Patient Experience
Usability is key
Transparency is essential
• Need to shine the light on payment variation - masked by lack of transparency
• Payment variation across and within markets - paying up to 500% of Medicare
• Phase-out gag-clauses• Support informed consumer decision
making
February 21, 2012www.catalyzepaymentreform.org 4
Implementing Reforms #1: Align Payment to the Evidence
www.catalyzepaymentreform.org
Example: Maternity Care
• Practice patterns straying from the evidence• Pre-term elective births• Unnecessary medical intervention in labor and delivery• Worse outcomes and higher costs
• Payment options• Providing one case rate for delivery, regardless of mode,
removes the financial incentives for unnecessary intervention in delivery
• Creating a “do not pay” policy for elective deliveries prior to 39 weeks
• Bundled payments
Payment changes need to be accompanied by facility, provider and patient education and supportive clinical policies and benefit design
Implementing Reforms #2: Value-Oriented Payment and Benefit Design
February 21, 2012www.catalyzepaymentreform.org 5
Example: Spectrum of Reference to Value Pricing
Implementing Reforms #3: Enhancing Primary Care through Payment
February 21, 2012www.catalyzepaymentreform.org 6
Patient Centered Medical Homes• Increased compensation for primary care
doctors and gain-sharing agreement
Medical Home for Patients with Severe Chronic Disease• Monthly fee paid to physician groups plus
the usual fee for service• Gain-sharing based on total cost of care
savings
*Pilot site results = unit price-standardized per capita spending dropped by estimated 20%
*Implementation planned for 1/1/13 in Midland, MI
February 21, 2012www.catalyzepaymentreform.org 7
Large Purchaser Strategies: Key Lessons Learned
1. Send clear and consistent signals
2. Transparency is essential
3. Carefully monitor health plan compliance
4. Benefit design should complement payment reform
5. Purchasers in all sectors must align
Appendices
February 21, 2012www.catalyzepaymentreform.org 8
• Appendix A – Additional Background on CPR (slides 9-11)
• Appendix B – RFI http://www.catalyzepaymentreform.org/uploads/CPR_Health_Plan_RFI_010412.xlsx
• Appendix C – Model Contract Languagehttp://www.catalyzepaymentreform.org/uploads/CPR_Model_Health_Plan_Contract_Language_011212.docx
• Appendix D – Maternity Care Action Briefhttp://www.catalyzepaymentreform.org/uploads/CPR_Action_Brief_Maternity_Care.pdf
• Appendix E – Reference and Value Pricing Action Brief http://www.catalyzepaymentreform.org/uploads/CPR_Action_Brief_Reference_Pricing.pdf
All CPR materials available in the public domain at:www.catalyzepaymentreform.org
Appendix A:CPR Purchasers Working Together
www.centerforpaymentreform.org February 21, 2012 9
Contact information: Suzanne Delbanco, Ph.D., Executive [email protected], 510-435-2364
• 3M• The Boeing Company• CalPERS• Capital One• Carlson • Delta Air Lines• Dow• eBay
• Equity Healthcare• FedEx• GE• Group Insurance
Commission, State of Massachusetts
• Intel• Marriott
• Ohio Medicaid• Ohio PERS• OSI Partners, LLC• Safeway• US Foods• Verizon• Wal-Mart• Xerox
A national independent organization led by large employers, with the active involvement of providers, health plans, consumers and labor groups working to improve health care quality and reduce costs by identifying and
coordinating workable solutions to improve how we pay for health care in the U.S.
Appendix A continued:Purchasers Have a Catalyst Role
Leverage Purchaser Power: Critical Mass
Environment Conducive to Reform
Shared vision - payment reform framework & principles
Aligned employer agenda - short term wins, longer-term bold approaches
Clear signals to plans – RFIs and contracts
Toolkit for local action – Market Assessment, Action Briefs, etc.
Direct dialogue with HHS for alignment and influence
National Scorecard on Payment
Compendium of Payment Reform Efforts – what works?
Analyze and raise visibility of provider market power and cost shifting issues
Coordinated Purchaser Action
www.catalyzepaymentreform.org February 21, 2012 10
CPR Toolkit developed to create shared understanding of opportunities and to encourage actions that leverage payment to improve value.
Payment Framework
• Help purchasers understand range of payment models and associated benefits and challenges
Action Briefs Market Assessment
• Outline steps to implement payment reforms and ways to mitigate potential unintended consequences
Sourcing Tools
• Support purchaser initiatives though standardized RFI/RFP language and contract modules
• Identify opportunities based on market conditions, health plan capacity, and delivery system organization
Plus, a National Scorecard to monitor the nation’s progress
Appendix A continued: Critical Mass Starts With Active Purchasers
www.catalyzepaymentreform.org February 21, 2012 11
SPECIAL INITIATIVES• Maternity Care
Payment • Value Pricing
• Price Transparency