On Thursday, August 6th, HCEG presented and HTMS?sponsored a Virtual Panel??From Concept to Reality: Practical Considerations of Implementing Alternative Reimbursement Models.?? Below is a summary of the call.
To those of us who have been in the healthcare industry for more than a few years it seems we?re always talking about alternatives to fee-for-service reimbursement.? Lots and lots of talk, and only bits of action?as an industry we?re a bit stuck in the gap between theory and practice.
To help us develop practical reimbursement innovation we were fortunate to have panelists today who are not only expert thinkers, they?re expert doers.? The panelists generously shared their practical experience in value-based reimbursement from both payer and provider perspectives.
- Craig Samitt, MD, MBA, Partner and Global Provider Practice Leader dug into the details of physician incentive alignment, using his experience at Dean Clinic where 75% of provider revenue was capitated. He offered 9 lessons learned:
- Following Dr. DiLoreto, Dan Tuteur, Chief Strategy Officer at Colorado HealthOP shared the pros and cons of being in a startup health plan trying to bring reimbursement and benefit innovation to a well-established marketplace. Benefiting from a blank slate and no historical friction with providers, but handicapped by the inability to promise any patient volume, Colorado HealthOP was successful in finding providers who were already on the path from volume-to-value and capitalize on their interest and experience.? Interestingly, Colorado HealthOP is able to use their benefit agreements to drive change among their members and support from providers.? Members, who complete a health survey, have a basic lab panel done, and select primary care providers are rewarded with richer outpatient mental health and primary care benefits.? Happily, this dynamic has been popular with providers.? Dan predicts Colorado HealthOP will consider capitation for primary care and some limited bundled payments for orthopedics and physical therapy, but significant innovation won?t be implemented until 2017 and thereafter.
- David DiLoreto, MD, CEO at Presence Health Partners, opened the discussion by walking us through how his ACO, which represents the continuum of providers, has leveraged its significant experience with government programs into the commercial arena.
- Moving from volume to value is a team effort; including physicians from the get-go is crucial.
- Don?t look to compensation redesign to fix everything. Peer pressure alone works very well in driving certain desirable changes regardless of reimbursement structures.
- Design a balanced mix of incentives. For example, individual physician production is still important, so don?t build compensation formulae that hurt production unnecessarily.
- Build a multi-tiered structure including global, departmental, and physician level components. Patient satisfaction and productivity should be evaluated for individual physicians, while quality and access are more meaningfully measured at the departmental level.
- Measure at the outset for two reasons?to understand baseline performance, and to benefit from the phenomenon that measurement alone tends to drive behavior changes.
- Offer alternatives. Physicians need multiple ?points of entry? depending on the nature of their specialty and their patients.
- Size matters?incentives, thresholds, have to be big enough to get the attention of providers and make them change in the desirable direction.
- Remember to keep hurdles low enough that providers have confidence they can get over them.
- Prepare to change based on evidence and experience.
The panelists also addressed several questions:
Q: When thinking about both impact and level of interest, what are the thresholds in terms of percent of revenue, percent of patients, or other levels do you think apply when trying to move to value-based reimbursement?? How much of a provider?s business must apply for them to be willing to make the investment in changes in practice to participate in an alternative reimbursement scheme?
A: Dr. DiLoreto shared that in his experience, 10% of a provider?s patients falling under value-based reimbursement is sufficient to get the provider?s attention; for a health system, 20-30% of total revenue is the threshold.
A: Dr. Samitt added that once a practice or patient population yields 30-40% of total revenue from value-based payments, the ROI for the provider is enough to drive the entire practice to a population health approach.? Dr. Samitt volunteered that in talking to physicians, he found using percentages was much less compelling than absolute dollars.? 5% seems small; $5,000 seems ?worth the hassle? of making the necessary changes.
A: Dan Tuteur explained that as a start up, they have no opportunity to drive these kinds of numbers, so instead of focusing on the volume of patients or revenue impact, they gravitated to physician who were already on the road to accepting alternative reimbursement.
Q: Can you comment on whether and how you used both benefits and provider contracts to change provider practices?
A: Dan Tuteur opened the discussion by explaining how they began by encouraging shopping for best prices and developing ways to make price transparency an advantage for members.? Colorado HealthOP hired an outside firm to manage this with members, but they found that providers? contract restrictions (with competing plans) made it difficult, in particular the way some contracts defined tiers.? They were helped by the benefit approach of offering better outpatient mental health and primary care coverage if patients participated in the wellness programs summarized above.
A: Dr. DiLoreto talked about the prevalent under-use of wellness benefits by members.? To offset member reluctance, they incorporated encouraging use of wellness benefits in provider contracts, which in turn gets more patients to their primary care physicians.? This has a secondary advantage for the provider and health plans by generating more primary care claims, which is crucial to member attribution to an ACO.
Q: Do you see a future where fee-for-service is the exception?
A: Dan Tuteur explained that as a start up their challenge in moving beyond vanilla fee-for-service is lack of historical data about their rapidly growing membership, where patterns of utilization were very different in year one than in year two.? With an accumulation of data, he believes it will be possible to estimate how quickly such a change could come.
A: Dr. Samitt wrapped up the conversation by stating that it depends on what we mean by fee-for-service?plain old payments without quality measures will become the exception within the next few years, but fee-for-service with quality incentives can and should persist.