Advancing Payment & Delivery System Reform

Although performance measurement efforts have made a positive impact on quality, only so much can be done when healthcare payment systems penalize improvement and the fragmentation of providers impedes coordination. Significant changes in the way healthcare is paid for, the way providers are organized, and the way consumer benefits are structured will be needed to achieve greater value in healthcare. To be successful, these changes must be made in a coordinated way. Regional Health Improvement Collaboratives can serve as catalysts for payment and delivery system reforms, as neutral planning and problem-solving forums where win-win multi-payer, multi-provider payment and delivery reforms can be designed, and as sources of both leadership and technical assistance in implementing needed reforms.

Pay-for-Performance and Performance-Based Contracting Using Collaborative-Generated Performance Measures

In a number of cases, the performance measures collected and reported by Regional Health Improvement Collaboratives are being used by all employers and health plans in the community to reward providers that deliver higher-quality care and to encourage patients to use higher-quality providers. Using a common set of measures developed by the Regional Health Improvement Collaborative reduces administrative costs for both plans and providers. For example:

Results of the Integrated Healthcare Association’s P4P Program

The Integrated Healthcare Association (IHA) in California assembles quality and utilization information to support the largest non-governmental pay-for-performance (P4P) system in the country, involving 221 physician organizations and 35,000 physicians. IHA runs the program on behalf of eight commercial health plans representing 10 million insured persons. IHA is responsible for collecting and aggregating data, deploying a common measure set, and producing results that are used for health plan incentives to physician organizations, public reporting, and awards. Using a common measure set and aggregating data across plans avoids potentially conflicting measurement systems that would result from uncoordinated health plan initiatives, and also provides larger sample sizes for more reliable results. IHA is also currently facilitating the re-design of current P4P incentives awarded by the health plans in California into a common Performance Based Contracting incentive structure that will incorporate both cost and quality.

Designing and Implementing More Fundamental Payment Reforms

Recommendations of the 2008 NRHI Payment Reform Summit Regional Health Improvement Collaboratives were among the first healthcare leaders in the country to recognize that more fundamental payment reforms were needed than Pay-for-Performance systems. In 2007 and 2008, the Network for Regional Healthcare Improvement convened national Payment Reform Summits that brought together national thought leaders and regional stakeholders and made detailed recommendations on the types of reforms needed to payment systems and what was needed to successfully implement these payment reforms in regions across the country.

Building on NRHI’s national summits, a number of Regional Health Improvement Collaboratives have held regional Payment Reform Summits to build consensus in their communities on the types of payment reforms which should be implemented by all payers, so that physicians and other healthcare providers are not forced to deal with multiple, disparate new payment structures. For example:

Recommendations of the Nevada Payment Reform Summit

HealthInsight and its Nevada Partnership for Value-Driven Healthcare held a statewide Payment Reform Summit in Las Vegas on April 22, 2010. At the Summit, 140 attendees,including healthcare provider and health plan executives, outpatient practice managers, employers and members of purchasing coalitions, consumer groups, and other interested stakeholders, developed recommendations for payment reforms to support medical homes for chronic disease patients and more efficient, successful care of major acute episodes.

A number of Regional Health Improvement Collaboratives are working with stakeholders to implement fundamental payment reforms in their communities on a multi-payer basis. For example:

  • The Institute for Clinical Systems Improvement reached agreement among all of the major health plans in Minnesota on several major changes in payments to support higher-value care. The DIAMOND Initiative includes changes in payments to both primary care practices and specialists to support better care for patients with depression, and has resulted in significant improvements in remission rates. The Diagnostic Imaging Project has helped physician practices reduce overutilization of high-tech diagnostic imaging, saving tens of millions of dollars.
  • The Integrated Healthcare Association has led the development of a program in California to pay hospitals and physicians for certain surgeries on a bundled episode-of-care basis.
  • The Washington Health Alliance is co-sponsoring a demonstration project to test a significant change in the way primary care practices are paid in Washington State. The payment model to be tested will give participating primary care practices both greater resources and greater accountability for helping patients avoid unnecessary emergency room visits and hospitalizations. Under the Medical Home Reimbursement Project, all of the major health plans in Washington State will change their payment systems beginning in 2011 so that primary care practices in the project will be paid the same way for a significant number of their patients.

Ensuring Costs Are Not Reduced at the Expense of Quality

As more communities begin efforts to develop and implement payment changes, the need for the performance measurement capabilities of Regional Health Improvement Collaboratives will grow. For example, in order to define outcome targets and strategies for reaching them, healthcare providers will need information about the current costs and outcomes associated with their patients. The data that many Collaboratives are already collecting can serve as a trusted source of information that both providers and payers can use to design and implement new payment models. For example:

  • The Louisiana Health Care Quality Forum’s Quality MAP (Measurement Analysis Portal) allows users to do their own analyses of healthcare claims data for Louisiana as well as to get pre-defined standard reports.
  • The Pittsburgh Regional Health Initiative’s Readmission Briefs provide guidance on the causes of hospital readmissions for all types of patients that can help guide healthcare providers seeking to reduce them.

Resolving Implementation Problems in Payment and Delivery System Reform

Finally, no matter how much effort is put into designing new payment systems and delivery system reforms, implementation problems will inevitably arise. A Regional Health Improvement Collaborative that is supported by all stakeholders and perceived by them as neutral can provide a critical mediation mechanism for resolving problems quickly and effectively.