SEPTEMBER 23, 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,
the National Medical Home Summit, and the National MACRA MIPS/APM Summit

Relatively Modest Health Reform May Create More Value Than 'Medicare for All'
Noted healthcare policy expert Jeff Golfsmith, Ph.D., writes in Health Affairs: "As we enter a new political cycle, like swallows returning to Capistrano, aspiring Democratic presidential candidates have returned to universal coverage through the strategy of "Medicare for All," as a rallying point. If anything, true Medicare for All is a far more ambitious policy goal than either Obama or President Bill Clinton and First Lady Hillary Clinton advocated: It abolishes private insurance (which covers about half of Americans) and places health spending (and provider incomes) firmly under the control of the federal government. ... Below, I advocate a three-fold approach: block grants for community-based efforts to address social determinants of health, expanded public health funding targeted at strengthening primary care and social care, and a limited expansion of Medicare targeted at the oldest and sickest uninsured." (Health Affairs, September 5, 2019)

Here's What True Grit Looks Like in Health Care
As a medical director and practicing physician, I count myself fortunate to meet and engage in meaningful conversations with many health care professionals throughout the state of Pennsylvania. Recently I was both humbled and inspired when I visited with a group of primary care physicians who operate their private practice in a rural community. These doctors are not only staunchly committed to serving a community that so desperately needs them, but they are also convinced that the best way to do so is to remain in full ownership of their practice. I have been traveling and meeting a lot of these passionately independent physicians, and their heartfelt stories are, not surprisingly, very similar. Regrettably, there are many examples of published research indicating how physicians in rural communities across the United States are under strong economic pressure. As the health care industry moves towards risk-based payments, reimbursements that reward value, quality, and cost reduction are replacing fee-for-service payments. Unfortunately, the stark reality for many rural and remote communities is that a large number of physicians serving these areas are being left behind in reimbursements because they lack the human and technological resources necessary to access the quality and value rewards typically offered to larger health care systems. In addition, many newer "value-based contracts" include increased administrative burdens and additional overhead costs, which are often insurmountable to small independent practices. (Kevin MD, September 5, 2019)

Better Health at Lower Costs: Why the U.S. Needs Value-Based Care Now - A Viewpoint
Health care spending in the United States ballooned from about 5% of the total economy in 1960 to nearly 18% in 2016, currently totaling upwards of $3.5 trillion annually.1 Perhaps the most telling statistic: We spend two to three times more than most developed countries each year, yet achieve worse results.2 And all of us shoulder that burden. Navigating a complex health care system can be a daunting task for anyone. Add financial, behavioral or other barriers to the mix, and it can be extremely difficult to reach your health goals. How can you achieve better health care outcomes and lower the cost of care in the U.S.? Enter value-based care (VBC). In these care models, doctors and hospitals are rewarded for getting people healthy and keeping them healthy. Rather than focusing on the quantity of care, the value-based model pays for quality. The core idea is paying for treatments and services that lead to better outcomes and a better experience for health care consumers. Some 5% of the U.S. population accounts for 50% of total health care costs, often because they spend long periods in hospitals while seeing little improvement. "Introducing value-based products that align payer and provider with shared goals related to quality, efficiency, and total cost of care is paramount to addressing our health care crisis. As we share data, and align incentives, we begin to approach solutions from a common viewpoint," says John Stockton, middle market regional vice president for Aetna. Value-based care is a proactive, data-driven approach which means providers, patients and insurance companies are better aligned in the goals of keeping patients healthy and keeping costs down over time. It's no surprise that addressing risk factors and early-stage disease is better for patients and less expensive than late-stage interventions and hospitalizations. Similarly, well-controlled chronic conditions incur fewer costs compared to uncontrolled conditions that often progress. Enhanced care coordination and data sharing can also help streamline administrative processes and reduce wasted spending. It provides services in the right place at the right time. (Kansas City Business Journal, September 6, 2019)

Pay-for-Performance Doesn't Improve Hospital Care: Study
Trying to improve medical care by giving hospitals extra money to follow treatment guidelines doesn't make a difference in the end, new research contends. However, the researcher who led the study said it's too early to give up on the pay-for-performance concept. "What we found was that all the hospitals in the study improved over time: those in the improvement group, which received money, but also those in the control group," said Dr. Seth W. Glickman, an assistant professor in the division of emergency medicine at Duke University. "All reduced errors at the same rate over time and had the same improvement in survival over time." In 2003, the Centers for Medicare and Medicaid Services (CMS) launched the largest pay-for-performance pilot project ever in the United States. It included financial incentives for sticking to heart attack care guidelines, the study said. A first look at data from 54 hospitals in the "pay-for-performance" group found some improvement in performance, such as better attention to the rule for prescribing aspirin in heart attack cases, according to the report published in the June 6 issue of the Journal of the American Medical Association. But when the researchers looked at comparable data from 446 hospitals with a voluntary quality improvement program that paid no money, they found similar improvements in quality of care and outcome. "But I don't think this is the end of the pay-for-performance idea," Glickman said. "It is the end of the beginning." (ABC News, June 5, 2019)

How and Why Value Based Purchasing Is Trending in the Healthcare Industry
As digital transformation continues rolling through the healthcare industry, value-based care is gaining momentum as an increasingly popular alternative to more traditional healthcare models. But what is value-based care? How do hospitals get reimbursed under this model? What are the advantages and disadvantages to value-based care? We dive into all these questions below.

What is Value-Based Care?

Value-based care is a type of reimbursement that rewards healthcare providers with incentives based on the quality of care they provide to patients. Essentially, value-based care models revolve around the patient's treatment and how well healthcare providers can improve their quality of care based on certain metrics, such as reducing hospital readmissions, improving preventative care, and using particular kinds of certified health technology. Fee-for-service is the more traditional healthcare reimbursement model, based on the amount of services a healthcare provider performed. Another common term for this model is pay-for-performance. This system incentivized providers to order batteries of tests and procedures and increase their total number of patients in order to bring in more money. That's the key difference with value-based care vs. fee-for-service care; the former provides incentives for quality, while the latter emphasizes quantity. (Business Insider, June 27, 2019)

Why Data Integrity Is Key to Achieving Value in Healthcare
Value is extremely hard to define when it comes to healthcare, according to University of Washington computer science professor Ankur Teredesai, co-founder and chief technology officer of Seattle-based KenSci, a company that provides a risk prediction platform powered by artificial intelligence and machine learning. Teredesai, who co-chaired this year's Association for Computing Machinery's KDD Conference, held in August in Anchorage, says the entire premise of value in healthcare is based on the ability to measure performance metrics while simultaneously establishing baselines for reducing unwarranted variation. "Data is central to cost prediction and estimating unwanted variation," he adds, noting that eventually, providers will use data and AI-driven decision-making for optimizing schedules and assessing patient risk. (Health Data Management, September 6, 2019)

Digital Disruption Will Help in Making Evidence-Based Healthcare a Norm
Are we making a world in which all humans can live together, or are we sinking into the abyss of an unequal future and hampered growth? Despite the economic success of India Inc, this is a question that is worrying when we look at the situation of healthcare in India. The health of a nation is intrinsically associated with the wellbeing of its citizens. Though the performance of India with respect to health and nutrition on the millennium development goals (MDGs) has improved, it has not matched the growth expectations needed to make India into a truly healthy society. As of June 2019, India's ranking in sustainable development goals (SDG) of good health and wellbeing was the highest at 79.9. We need to ensure that health remains a policy issue so that various stakeholders can actively participate in the process of making India truly healthy. (WION.com, September 5, 2019)

Quality and Patient Safety Resources

Pay for Performance Update e-Newsletter is one of a family of free e-Newsletters providing a complimentary video presentation and regularly updated news and key resources on major health care issues such as ACOs, comparative effectiveness, patient safety, bundled payment, readmissions, and Medicaid. To view and subscribe to other e-Newsletters go to www.HealthCareeNewsletters.com.

Debating the Most Efficient Delivery and Payment Models: Consolidation vs. Clinical Integration; Hospital vs. Physician Control; Capitation vs. Shared Risk

Thomas M. Priselac
President and Chief Executive Officer and Warschaw Law Chair in Health Care Leadership, Cedars-Sinai Health System; Adjunct Professor, UCLA Fielding School of Public Health, Los Angeles, CA