Making the Business Casefor Payment and Delivery Reform
In order to support improvements in both healthcare delivery and payment systems, individuals and organizations that purchase healthcare services need a clear business case showing that the proposed change in care will achieve sufficient benefits to justify whatever change in payment healthcare providers need to support the change in care. Healthcare providers also need a clear business case showing that they will be able to successfully deliver high-quality care in a financially sustainable way.
Making the Business Case for Payment and Delivery Reform describes a ten-step process to develop such a business case, and provides a detailed example for how to apply the process to an initiative to improve management of chronic disease patients. The report also describes the types of data that are needed to carry out all of the steps in a good business case analysis.
Regional Health Improvement Collaboratives
Regional Health Improvement Collaboratives: Essential Elements for Successful Healthcare Reform describes the key roles that non-profit, multi-stakeholder Regional Health Improvement Collaboratives are playing all across the country in transforming the healthcare delivery system and improving the health of citizens.
The report provides an overview of what Collaboratives are doing in performance measurement, payment and delivery system reform, training and assistance for providers to help improve performance, and patient education and engagement. The updated Second Edition includes detailed profiles on 22 Collaboratives and their leaders.
NRHI Payment Reform Series
Thanks to generous support from the Robert Wood Johnson Foundation, NRHI will be issuing a series of reports on issues related to healthcare payment reform.
The newest report in the series is Pay for Innovation or Pay for Standardization: How to Best Support the Patient-Centered Medical Home. The report recommends improved ways in which primary care practices should be paid for delivering services to patients in order to improve health care quality and control costs, ranging from new fees for services such as nurse care managers to help patients manage chronic diseases, to comprehensive payments that would completely replace the fee-for-service system. It also cautions against moving too quickly to require primary care practices to meet detailed accreditation standards in order to receive improved payments, and particularly cautions against establishing requirements that serve as barriers to participation by small physician practices without strong evidence that the requirements improve quality.
The second report in the series was Better Ways to Pay for Health Care: A Primer on Healthcare Payment Reform. The concise report provides an easy-to-understand explanation of the problems with current healthcare systems and describes 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. 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 and 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 first report in the series was the Executive Summary of the recommendations from the 2008 NRHI Payment Reform Summit. This document makes recommendations for addressing key issues and challenges in order to implement healthcare payment reforms, including:
- The kinds of standards health insurance plans and other payers should demand of primary care practices in order to provide improved payments;
- The number of cost/quality tiers into which providers should be grouped;
- The magnitude of the payment differences for consumers choosing providers in different tiers;
- The reporting requirements providers should be expected to meet in order to protect patients; and
- The types of assistance that hospitals and small physician practices should be given to help transition to new payment systems.
Upcoming reports in the NRHI Payment Reform Series include:
- Creating incentives for consumers to use higher-value providers and services; and
- The important role that regional healthcare collaboratives must play in implementing payment reform.
A major cause of the quality and cost problems in healthcare today is that payment systems encourage volume-driven healthcare rather than value-driven healthcare. Fortunately, there are better ways to pay for healthcare, called episode-of-care payment systems and condition-specific capitation systems, which give healthcare providers more responsibility for increasing quality and controlling costs of services without penalizing them financially for treating sicker patients.
There are a number of important issues that need to be addressed and a variety of challenges that need to be overcome in order to move these improvements from concept to reality:
- Which healthcare providers are able and willing to accept new payment structures and deliver value-based care?
- How should the use of high-value providers and services be encouraged? What protections are needed to ensure appropriate quality for patients?
- How can payers and providers be encouraged to participate in new payment and delivery systems? How similar do different payers' systems need to be?
- What kinds of pilot projects are needed to test new payment systems?
- What community-wide structures are needed to support payment reform?
The recommendations of more than 100 healthcare leaders from across the country for addressing these issues are described in detail in this report.
In many cases, current healthcare payment systems don't reward efforts by physicians, hospitals, and others to improve the quality and reduce the costs of health care. In fact, all too often, they actually financially penalize them. This has led to a variety of pay-for-performance ("P4P") programs which add a new layer of rewards and incentives on top of the existing payment systems. While well-intended, there is a growing recognition that most current pay-for-performance initiatives won't by themselves solve the fundamental problems and disincentives that are built into the underlying payment systems.
On March 29, 2007, the Network for Regional Healthcare Improvement convened a one-day, invitation-only national Summit on Creating Payment Systems to Accelerate Value-Driven Health Care in Pittsburgh, Pennsylvania. The Summit was designed to accelerate thinking about how healthcare payment systems can be redesigned to reward improved quality and lower costs. The Summit was not a typical "conference," but rather a working meeting that brought together the people who must collaborate if innovative solutions will ever succeed - major healthcare payers, health plans, regional coalitions, researchers, and other thought leaders. Attendance included nearly 100 regional and national leaders from around the country who are working at the frontier of these issues.
This report describes the recommendations of the Summit participants regarding the types of payment systems that should be implemented in order to improve the quality and reduce the costs of healthcare.