VOLUME 9 - ISSUE 122
MAY 29, 2019



Welcome to the Pay for Performance Update eNewsletter
Editor: Philip L. Ronning
This issue is sponsored by the National ACO Summit, the National Bundled Payment Summit,
and the National MACRA MIPS/APM Summit



HHS to Implement Pay-for-Performance Models for Primary Care Practices Serving Medicare
Two weeks ago, the Department of Human and Health Services (HHS) unveiled the "Primary Cares Initiative," a program that aims to "reduce administrative burdens" and enable primary care physicians to earn "performance-based payments" if they deliver care to Medicare patients that meets certain targets and decreases downstream healthcare costs. CMS has posted a request for applications for the first cohort of primary care practices. The program is intended to go into effect January 2020 and continue for five years. It is hoped that if the Primary Cares Initiative is successful in Medicare, state Medicaid programs and commercial payers will follow suit. The ultimate purpose of the initiative, according to the Director of HHS, Alex Azar, is to move primary care from a fee-for-service to a value-based system, predicated on paying for healthcare outcomes rather than numbers of procedures. The Primary Cares Initiative includes five value-based payment models that will be tested along two tracks: Primary Care First and Direct Contracting. The former track is geared towards comparatively small primary care practices that are ready to assume financial risk. At the base of the first payment model are risk-adjusted population-based payments and flat primary care visit fees. The Centers for Medicare and Medicaid Services (CMS) will provide primary care practices with a flat fee for each patient, and they will pay practices bonuses as high as 50% of their revenue if they meet certain blood pressure, hemoglobin A1c, and colorectal cancer screening targets, in addition to reduced hospitalizations, patient satisfaction indices as measured in a patient care survey, and proof of incorporation of advance care planning for patients. Primary care practices will be responsible for added costs, if patients end up sicker than expected. Physicians in these practices could lose 10% of their revenue. (Forbes, May 10, 2019)

The Future of Health Care: Embracing Value-based Health Care
Employers and health insurers are moving quickly away from fee-for-service health care benefits plans and toward value-based network delivery to employees and their families, driven by timely data, cost efficiencies, wellness incentives and better-coordinated care. But don't expect an overnight cultural transformation among employees, according to Jim Patton, area vice president of the Mid-Atlantic region for Arthur Gallagher and Co. Patton was the keynote speaker at the Future of Health Care panel program hosted by the Pittsburgh Business Times in partnership with UPMC Health Plan on May 14 at the Fairmont Pittsburgh. "I wish you could just turn on a switch," Patton said. "If you really want to get great results, it's a three- to five-year education strategy, buy in from leadership, full-court press every day, walking, talking and believing in the message and delivering that message to the employees to where the culture changes....They have to understand the big picture." (Pittsburgh Business Times, May 16, 2019)

Todd Berner on the Consumerization of Healthcare
The unfortunate truth about healthcare, and one that every organization must consider when making decisions, is that consumers will try to shop for providers due to the fact that they bear much of the financial burden. As such, organizations are placing a higher emphasis on creating a satisfying experience for patients when they visit hospitals and other care facilities. The good news is that overlaps with trends of patient engagement and feed into practices that really should be going on anyway. The other factor that has contributed to the mass consumerization of healthcare in the last decade is the information boon. Given that patients are now able to access information (accurate or not) over the internet, providers are forced to compete with external forces to ensure that patients receive the care they need. Very seldom is self-diagnosis better than a visit with a doctor--though mounting prices make the mass pursuit of the former more understandable. A happy medium to this issue is the rise of telehealth and the ability of doctors to meet virtually with patients. While the information age may contribute to the proliferation of misleading information, it can also facilitate easier (and therefore less expensive) visits to the doctor. The possibility of face-to-face communication also provides a personalized experience without the difficulty inherent in waiting rooms. However, even though consumers may want to shop around for their ideal healthcare, it's still very difficult for them to make decisions. In fact, a study concluded that only 12 percent of people given access to a healthcare pricing transparency tool used it in the first 15 months. The difficulty lies in the highly-variable nature of healthcare--price alone may not be a good indicator of what patients want, even if they are price-sensitive. For future healthcare shopping platforms, any developers should spend time creating the best possible UI to simplify the process for consumers that may find it challenging. Personalizing things like apps and portals to the patient in question is valuable to ensure that they feel like their needs are being heard in the often-chaotic exchange of information. For healthcare organizations, it's worth considering ways to add value outside of standard services offered, including ways to align with their lifestyle needs. (Forbes, May 16, 2019)



Senate, House Split Over How to End Surprise Medical Bills
Newly released Senate legislation to curb surprise medical bills would allow third parties to settle billing disputes, a provision that could complicate passage because it opposed by the White House and absent from a House draft. The Senate bill represents nearly a year of work led by Sens. Bill Cassidy, R-La., and Maggie Hassan, D-N.H. If lawmakers aren't able to resolve the differences between the two chambers and win over the White House, then a victory on healthcare that was once in sight this year may escape them. The bill would have insurers pay out-of-network doctors and hospitals for the difference between a patient's in-network cost-sharing requirements and the median in-network rate for their services. If either party wants to appeal the amount, they can do so using an arbitration process. That allows an independent arbiter to determine a fair price after evaluating what a hospital and doctor is charging compared with what an insurer is willing to pay. The method is binding, and it's supposed to give both sides an incentive to offer a realistic figure. It's often referred to as "baseball-style arbitration" because it's similar to how salaries are decided in Major League Baseball. (The Washington Examiner, May 16, 2019)

Uwe Reinhardt's 'Priced Out' Offers Lessons in Health Care Costs for All
I had the pleasure -- and the misfortune -- of publishing several articles with Uwe Reinhardt, the legendary Princeton economist who died in 2017 as a very young 80-year-old. The pleasure was that Uwe was a great co-author with amazing insights. His ability to present complex ideas in an accessible way will be clear if you read his just-published final book, "Priced Out," which explores the economic and ethical costs of health care in the U.S. The misfortune occurred whenever I used the paper we had written together to give a talk: Uwe's were always funnier and had more insight than mine. While working with Uwe, I learned that he kept three audiences in mind. The first was students; they were perhaps his primary audience. This book is entirely appropriate for undergraduate or graduate students interested in how our health system operates. His second audience was policy makers and the media. Uwe spoke about topics that were on everyone's mind and almost always provided memorable one liners. "Priced Out" explores the underpinnings of our health care system and identifies the values that form its foundation. His third audience is everyone engaged in delivering health care. The book illustrates Uwe's ability to take on powerful interests and have them accept his humorous critique of their actions. Students will benefit from the first chapter, which offers a primer on factors that explain why the U.S. has greater spending on health care than any other industrialized country (with poorer outcomes) and then discusses how these high prices affect the average patient. The third chapter, "Some Interesting or Curious Facts about Our Health Care System," is classic Uwe relating to students. He begins with a joke that I can see him telling during a presentation: "According to a cosmic law whose discovery I attribute the legendary Harvard professor Alfred E. Neuman: Every dollar health spending = Someone's health-care income." The reference may be to Mad magazine, but the sentiment is serious and explains why it is so difficult to control health spending. (STAT May 14, 2019)

Not Texting kin Healthcare? Here's Why You Should
A perceived lack of communication is the primary reason for patient dissatisfaction, not a doctor's qualifications, expertise or the diagnosis given. A study of 35,000 physician reviews posted online shows that 96 percent of complaints could be linked to poor communications or poor customer service by physicians or office staff. We've all experienced the frustration often associated with contacting a physician: the phone tree of choices, the wait to speak to someone, the inevitable leaving of a message and hoping for a return phone call in a day (or two). So, it's no wonder that younger patients, especially, are embracing newer forms of communication such as text and social media messaging. Physicians, practices and health systems, however, must tread carefully when communicating via text with patients. HIPAA prohibitions regarding the sharing of protected health information (PHI) apply, and compliance isn't as simple as deleting communications from a phone. (MedCity News, May 14, 2019)




Value-Based Health Care: Strategic Partnerships

(Bloomberg Law, April 23, 2019)


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