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Benefits Beat

Changing Health Care — and Payments

We all know that our health care system needs revolutionary change. Fixing the way we pay for health services is key to that change.
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Payment reform efforts promote the idea that our health care system should move away from paying for volume to paying for value.

For any HR pro, feedback is golden. When it is connected to a program that saves significant health care costs, improves the quality of care, and gets an employee back to work sooner, it might even sound too good to be true.

And what if I added that the program was also part of changing the entire health care system for the better? That’s the potential of payment reform, a set of initiatives — and new health care models — being created by employers, advocacy groups, and new companies to change the way we pay for care. We all know that our health care system needs revolutionary change. Fixing the way we pay for health services is key to that change.

WF_WebSite_BlogHeaders-18Currently, the majority of health care falls into a fee-for-service model. This means that doctors, nurses, hospitals and other facilities and providers are paid for each service they deliver — the volume, not the quality of the outcome resulting from that service.

Payment reform efforts promote the idea that our health care system should move away from paying for volume to paying for value. This means that providers will have a stake in the quality of care they provide — such as whether or not the patient gets and stays healthy — and share in the financial risk for providing that care.

Brian Klepper, who leads Health Value Direct, said, “When we vet a high-performance program, one of the key questions is whether the vendor has enough confidence that they’re willing to put a percentage of their fees at financial risk against the performance targets they claim they can achieve.”

It sounds complicated, but every employer can be part of this change. Catalyst for Payment Reform, an independent, nonprofit employer coalition, has been pushing for these changes since 2010. I was thrilled to join CPR’s advisory board and have seen the investment going into tools and resources, including online education courses for employers. The organization is giving every company, big or small, an avenue to engage with payment reform. Its new initiative, the Peterson-CPR Catalyst Lab, is bringing even more energy and resources to the topic.

Another way that employers are already pushing payment reform forward is by pursuing a “centers of excellence” model for high-cost procedures, such as surgeries. In this model, employees are sent to high-quality providers who have agreed to a set price for providing the surgery or treatment, sometimes even including terms that protect the employer from the added costs of preventable complications.

The cost for services is much lower, and the outcomes for the patient are proving much better. This model often goes hand in hand with a very high-touch health care experience — a concierge who ensures the patient gets everything they need before, during, and after surgery. In many cases, it also means that patients are directed away from surgery altogether, to alternatives that will have a better chance of success.

Early adopters of this model are on the rise. The Pacific Business Group on Health created the Employers Centers of Excellence Network, which sends employees to Johns Hopkins Bayview Medical Center in Baltimore, and Virginia Mason in Seattle, for procedures including joint replacements and spinal surgery. The PBGH has also launched the Purchaser Value Network to help educate the employee benefits industry and share best practices and advocacy opportunities.

Carrum Health has created a regional approach to the Centers of Excellence model and built a turnkey solution that makes this model accessible to employers of all sizes. (I’m on Carrum’s advisory board.) They are operating on the West Coast in partnership with health systems such as Stanford, Scripps and Providence.

Payment reform has the potential to create one of the most important win-win scenarios: improving our health care outcomes while lowering costs. I hope you’ll join me by getting your organization involved.

Jennifer Benz is CEO and founder of Benz Communications, a San Francisco-based employee benefits communications agency. She was named one of Workforce’s Game Changers in 2013. Comment below or email editors@workforce.com. Follow Workforce on Twitter at @workforcenews.

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