NRHI Releases Report on the Patient-Centered Medical Home
February 18, 2009
As federal and state government officials seek ways to address escalating health care costs, NRHI urged major reforms in the way Medicare, Medicaid, and private health insurance plans pay primary care physicians. In its new report, "Pay for Innovation or Pay for Standardization: How to Best Support the Patient-Centered Medical Home," the Network for Regional Healthcare Improvement (NRHI) also cautioned that higher payments to primary care practices should be based primarily on whether they improve outcomes for their patients, rather than whether they meet detailed accreditation standards.
Produced with support from the Robert Wood Johnson Foundation, the report said a significant cause of increasing health care costs and poor health care quality is that many primary care services with proven effectiveness are not currently paid for at all, and others receive inadequate reimbursement. The report recommends that primary care practices should be paid for services such as nurse care managers and physician phone contacts with patients, together with bonuses or penalties based on outcomes such as rates of preventable hospitalizations and emergency room visits. The report recommends that ultimately the current system of fees for individual services should be completely replaced with a single, comprehensive payment to cover all of the costs of a person's outpatient care.
"Health care leaders from across the country agreed that better methods of paying for primary care are needed in order to prevent illnesses and unnecessary hospitalizations and to help control the growth in health care costs," said Harold D. Miller, president and CEO of NRHI, who authored the report. "Rather than rewarding physicians for how many services they deliver, we should reward them for improving patient outcomes."
Many health care reform proposals have recommended higher payments, but only for primary care practices designated as a "patient-centered medical home." (The goal of the medical home is for each patient to have an ongoing relationship with a personal primary care physician and a team of other health care professionals who collectively take responsibility for providing or arranging for all of the patient's health care needs in a coordinated way.) The report urges that before requiring physician practices to meet detailed standards in order to be designated as patient-centered medical homes, additional evaluations should be completed to determine which specific processes and structures produce better outcomes.
"No one yet knows exactly which specific changes in primary care delivery will have the biggest impacts on health care quality and control costs, so initiatives to implement the medical home should encourage innovative approaches focused on improving patient care outcomes," said Michael W. Painter, J.D., M.D., a senior program officer at the Robert Wood Johnson Foundation. "Moreover, we should encourage and assist small physician practices to participate in medical home initiatives, since that is where the majority of primary care physicians in the nation practice."
The recommendations in the report were developed by more than 100 health care leaders from across the country who participated in NRHI's 2008 national Summit on Healthcare Payment Reform. The full set of recommendations from the Summit is included in NRHI's previously released report, "From Volume to Value: Transforming Health Care Payment and Delivery Systems to Improve Quality and Reduce Costs."
This is the third in a series of reports from NRHI examining ways to reform payment systems in order to improve quality and reduce costs in the health care system. NRHI plans to hold another national summit on payment reform this year, and to encourage implementation of the reforms the report recommends in regions across the nation.
NRHI Calls for Federal Help for Regional Healthcare Collaboratives
January 14, 2009
The Network for Regional Healthcare Improvement has joined with the American Health Quality Association, the National Business Coalition on Health, and the National Partnership for Women and Families in calling on Congress and the Obama Administration to provide federal assistance to Regional Healthcare Collaboratives in their efforts to improve healthcare quality. In a letter, the four organizations identified three critical needs which must be addressed this year:
- the ability to include Medicare data in regional quality reporting initiatives;
- authorization for Medicare participation in regional payment and delivery system reform initiatives; and
- funding to support regional initiatives that promote greater accountability and faster improvement in the quality of American health care.
The full text of NRHI's letter can be downloaded here.
NRHI Releases Primer on Payment Reform
January 14, 2009
As Congress and the Obama Administration search for ways to reform health care, a new report demonstrates that rationing and price controls are not the only ways to control health care costs. Better Ways to Pay for Health Care: A Primer on Healthcare Payment Reform provides an easy-to-understand explanation of the problems with current health care payment systems and describes alternative payment systems that will address these problems.
The concise guidebook, produced by the national nonprofit Network for Regional Healthcare Improvement (NRHI) with support from the Robert Wood Johnson Foundation, demonstrates how the way we pay for health care today drives up costs and penalizes doctors and hospitals that deliver higher-quality care. But the report doesn't just document the problems - it explains alternative payment systems that can solve the problems without placing the kinds of restrictions on doctors and patients that doomed many managed care initiatives a decade ago.
For example, the report shows how "episode of care" payment systems provide the incentives for hospitals and physicians to coordinate their efforts in order to eliminate quality problems, such as hospital-acquired infections, and to improve efficiencies in care delivery. It also shows how "risk-adjusted global fees" can provide primary care physicians the resources they need to help people with chronic diseases stay well enough to avoid preventable hospitalizations, which is consistent with current national efforts to promote the use of "patient-centered medical homes."
The information in the guidebook was originally prepared for NRHI's 2008 national Summit on Healthcare Payment Reform. At that Summit, more than 100 health care leaders from across the country developed recommendations on how to implement the improved payment systems described in the report. (The recommendations on implementation are described in NRHI's previously released report, From Volume to Value: Transforming Health Care Payment and Delivery Systems to Improve Quality and Reduce Costs.) The payment systems described in the Better Ways to Pay for Health Care report were developed and endorsed at a previous national summit organized by NRHI in 2007.
"Creating a better health care payment system is an essential part of any health care reform initiative. This report should help policymakers and others interested in health reform understand that there are alternative payment systems that can foster higher-quality care while helping control costs," said Michael W. Painter, J.D., M.D., a Senior Program Officer at the Robert Wood Johnson Foundation, which has provided financial support for NRHI and the 2008 Payment Reform Summit.
"The improved payment systems described in this report are not ivory-tower theories-versions of them have been tested successfully in various parts of the country over the past two decades," said Harold Miller, President and CEO of NRHI, who authored the report. "Moreover, health care leaders from across the country have endorsed these payment systems in two successive national summits convened by the Network for Regional Healthcare Improvement."
This is the second in a series of reports from NRHI examining ways to reform payment systems in order to improve quality and reduce costs in the health care system. NRHI plans to hold another national summit on payment reform this year, and to encourage implementation of the reforms the report recommends in regions across the nation.
NRHI Releases Recommendations on Healthcare Payment Reform
November 12, 2008
Health care is so expensive in the U.S. - $2.2 trillion last year - in part because we don't reimburse doctors and hospitals intelligently. The Network for Regional Healthcare Improvement (NRHI) today urged fixes that could save billions of dollars and make expanding health insurance to the uninsured more affordable.
Our health care payment system is built to reward the quantity of treatment, not the quality, says the report, "From Volume to Value: Transforming Health Care Payment and Delivery Systems to Improve Quality and Reduce Costs." This backward payment system penalizes doctors and hospitals financially for eliminating unnecessary tests and treatments, preventing infections, and keeping people healthy.
A summit of more than 100 leaders from across the country - doctors, hospitals, insurers, academics, foundations, government, regional healthcare collaboratives, and others - generated the recommendations. All endorse a profound transformation in the way hospitals, doctors and other health care professionals are paid.
"We can help lift the quality of health care by fixing the way we pay for it," said Michael W. Painter, J.D., M.D., a senior program officer at the nonprofit Robert Wood Johnson Foundation, which funded the summit and the report. "We need to quit paying for things that don't work - like unnecessary and even dangerous tests and treatments - and pay for things that we know do work, like helping patients manage their chronic illnesses better."
The report recommends that insurers pay doctors and hospitals a single amount that covers all the services a patient needs instead of separate fees for each service. Moreover, insurers should change the system from paying more to correct errors and preventable complications to rewarding health care providers for successfully treating patients.
The report also addresses ways to encourage patients to use higher-quality, lower-cost doctors and hospitals; how to protect patients from receiving too few services; and how to help health care providers change to new payment systems and lower-cost care.
"Higher quality health care can actually cost less if we reward doctors and hospitals for providing the most effective, efficient, and least expensive care," said Harold D. Miller, president and CEO of the NRHI, who organized the summit and authored the report. "This report shows that health care leaders from across the country agree, not only on the changes that should be made in payment systems, but on many of the key steps to actually implement those changes."
To change payment systems, the report recommends the following:
- Pay primary-care physicians for services they are not reimbursed for now, such as care management, that have been demonstrated to help people stay healthy. But doctors should also take greater responsibility for reducing preventable hospitalizations and controlling the cost of patient care. Primary-care physicians should be evaluated on whether they help patients stay well, rather than requiring them to meet rigid formulas for organizing their services.
- Pay hospitals and doctors jointly for the full episode of care for a patient, in order to encourage coordination and efficiency.
- Although consumers should be free to choose their doctor or hospital, they should also have access to easy-to-understand information about the quality and cost of health care providers and services, and insurers should reward them financially for using the most efficient, high-quality providers. Consumers should also have financial incentives to maintain their health.
- Do not penalize doctors and hospitals financially for serving patients who are sicker or who require more time and assistance. In addition, healthcare providers should report publicly on the quality of services they provide, particularly to minorities and poor people.
- Test new payment systems as pilot programs at the regional level. Health insurers and Medicare should support projects that improve quality and reduce or control costs, and the federal government should provide funding to help regional healthcare collaboratives design and evaluate pilot projects.
- Businesses, individuals, and governmental agencies that buy health insurance should choose only health plans that implement improved payment systems.
- Provide technical and financial assistance to hospitals, small physician practices, and other health care providers to help them make the transition to a more efficient, cost-conscious health care system.
- Neutral organizations such as regional healthcare collaboratives should compile and issue public reports on the quality and cost of health care providers and services; encourage insurance plans to align their payment structures and incentives; and educate consumers about changes in payment and care.
This is the first in a series of reports from NRHI examining ways to reform payment systems, improve quality, and reduce costs in the health care system. NRHI plans to hold another national summit on payment reform in 2009, and to encourage implementation of the reforms the report recommends.
To read the report: www.nrhi.org/reports.html
NRHI Appoints Harold Miller as President and CEO
November 10, 2008
The Network for Regional Healthcare Improvement appointed Harold D. Miller as its new President and Chief Executive Officer. Miller has been working as a consultant to NRHI for the past two years, and he organized NRHI's national summits on healthcare payment reform in 2007 and 2008.
"Regional efforts offer the greatest promise for successfully improving the quality and reducing the cost of healthcare in the U.S.," said Miller. "I am excited about the opportunity to work even more closely with the country's leading regional healthcare collaboratives as president of NRHI."
"NRHI provides valuable support to our regional efforts to improve the quality and value of health care," said Jim Chase, President of Minnesota Community Measurement and Chair of the NRHI Board. "With Harold's leadership, NRHI can help us have an even greater impact on our communities and across the country."
Miller replaces Maulik Joshi, who had served as NRHI's first president since July, 2007. In October, Joshi was appointed senior vice president for research at the American Hospital Association (AHA) and president of the Health Research and Education Trust.
Miller has experience in both regional and national efforts to improve the quality of health care services and to change the fundamental structure of health care payment systems in order to support improved quality. His report prepared for the 2007 NRHI Payment Reform Summit, Creating Payment Systems to Accelerate Value-Driven Health Care: Issues and Options for Policy Reform, was published by the Commonwealth Fund in September, 2007, and the reports prepared for the 2008 Payment Reform Summit will be released later this month in cooperation with the Robert Wood Johnson Foundation. Since 2006, Miller has served as the Strategic Initiatives Consultant for the Pittsburgh Regional Health Initiative (PRHI); his work with PRHI on how health care payment systems impede quality improvement was featured in Modern Healthcare magazine in December, 2007. In 2007 and 2008 he served as the Facilitator for the Minnesota Health Care Transformation Task Force. Miller also has an appointment as Adjunct Professor of Public Policy and Management at Carnegie Mellon University's Heinz School of Public Policy and Management.
National Experts and Regional Coalitions Call for Healthcare Payment Reforms
October 4, 2007
Although healthcare reform is at the top of the national agenda, most of the current debate focuses on coverage for the uninsured when an equally serious problem is the high cost and unreliable quality of health care. A group of 100 healthcare leaders from across the nation convened by the Network for Regional Healthcare Improvement (NRHI) agreed that one major cause of cost and quality problems is that current healthcare payment methods penalize hospitals, physicians, and other healthcare providers who deliver the highest quality, most efficient care. They called for changes in the payment system.
NRHI convened experts at an invitation-only Summit on Creating Payment Systems to Accelerate Value-Driven Health Care to propose options for restructuring payment practices. The conferees proposed new payment methods and recommended that they be tested through regional demonstrations. They rejected marginal pay-for-performance bonuses that many insurers use to encourage practice improvements as insufficient to incentivize major care improvements in an inherently flawed payment system.
A summary of their conclusions and the new payment models they proposed have just been published in Roots, a special publication of the Jewish Healthcare Foundation (JHF) and the Pittsburgh Regional Health Initiative (PRHI), a founding member of NRHI. JHF, the Commonwealth Fund, and the California HealthCare Foundation funded the Summit. The full report on the Summit findings is available on NRHI's web site, http://www.nrhi.org.
"Our current payment system is one of the chief culprits behind the high cost of health care and it's also responsible for many of the quality problems," said NRHI President and Chief Executive Officer Maulik Joshi, DrPH. "As we move toward the presidential primaries, these findings should weigh heavily in any discussion of healthcare reform."
Under the current reimbursement system, physicians are paid fees for each service they provide and hospitals typically receive lump sums for every patient admitted or readmitted. As a result, the incentives of health care are weighted toward the number of services delivered, not the quality. Mishaps that result in additional need for treatment, such as infections contracted because of hospital stays, can even mean additional payments. Because of that, improvements in the quality of care often financially penalize doctors and hospitals by diminishing the number of services patients need or reducing the need for hospital care. Similarly, physicians often are not compensated adequately for the time-intensive care and counseling involved in preventive medicine or optimum treatment of patients with chronic illnesses, such as diabetes and high blood pressure.
"We need to improve the quality of care to control costs," said Karen Wolk Feinstein, PhD., who serves as Chairman of NRHI and is President and Chief Executive Officer of JHF and PRHI. "Without payment reform, quality improvements are doomed to be anecdotal in nature and glacial in pace."
Summit conferees proposed payment reforms for several broad categories of health care, including preventive care; care for patients with chronic illnesses such as diabetes, asthma, and high blood pressure; major, acute conditions such as heart attacks and strokes that come on suddenly and require hospitalization; and end-of-life care. The proposed payment methods were designed to shift the incentives of care toward the best, evidence-based practices of medicine and improved outcomes for patients. For example, instead of paying physicians for each office visit from a diabetic patient, reimbursements might be restructured to provide periodic (e.g. monthly) Comprehensive Care Payments to cover all of the care management, preventive care and minor, acute services associated with the patient's chronic illness. The payments would be based on specific diseases and on patient-specific factors, such as age, that are likely to affect the level of services required.
In addition to the conferees' conclusions and recommendations, the edition of Roots in which they are published provides firsthand accounts from physicians about ways the current system of incentives frustrates their efforts to provide the best care or prevents them from improving substandard care. For example, a Pittsburgh physician who implemented a new model for treating diabetic patients, which has both improved outcomes and efficiency at a government-funded VA Hospital clinic, lamented he would be unable to use the same model in his university hospital-based practice because of private payment restrictions.
Roots also describes some innovative payment approaches, including a warranty on open-heart surgery at Pennsylvania's Geisinger Health System and a change in reimbursement that helped Seattle-based Virginia Mason Health System implement a new, cost-saving protocol for treating patients with back pain.
The Geisinger and Virginia Mason experiments are examples of creative reform initiatives percolating around the country, including some under Medicare and Medicaid. Building on those, PRHI and other NRHI members plan regional demonstrations of payment reforms.
"Summit participants agreed that reforming payment systems will be challenging, but changes are essential in order to achieve efficient, effective, and sustainable improvements in the quality and costs of health care," said Harold Miller, the Summit Coordinator, who also authored the paper that framed the discussions at the Summit. "Summit participants agreed that the next step should be a variety of regional demonstration projects to test the real consequences of innovations," Miller added.