Inaugurating Health Care Reform: The Nuts and Bolts (Part I-g)

February 24, 2009

We need to move away from the current fee-for-service (FFS) payment system: it fosters piecework; that fractionalizes care, which is costly

Health Care Assurance—Not!

By moving from 'let's see what we can exclude from coverage,' and employment-based health service insurance to continuous, prevention-emphasizing, no barrier insurance coverage, administrative costs of health insurance can be reduced while providing comprehensible and rational payment and heathcare system reforms.

We need to move away from the current fee-for-service (FFS) payment system: it fosters piecework; that fractionalizes care, which is costly. For the FFS-paid, front line physician the 'game' becomes, how many visits / procedures / tests can I churn out? There is, however, one good thing about this method of payment: it produces more visits, which is an opportunity for the practitioner to practice prevention: primary prevention—example, getting a flu shot; secondary prevention—after the fact of the disease, but pre-clinical; and tertiary prevention—the nitty gritty diagnosis and treatment of diseases. Of course, the patient has a role to play (that is, don't blame the doctor for every shortfall): there's the patient's willingness to take the medicine, change their behavior, and then the externalities—they must properly weigh opportunity costs, stay employed and be able to afford the copays and deductibles.

Regarding practice incentives and how we practitioners are compensated, prepayment (ie, capitation) has no business in health care, except, perhaps for specialists, especially when there is a surfeit of them. Capitating a physician is inherently dangerous—with it, governmental agencies and insurers are (inadvertently?) putting us in conflict with patients who are worried and want to be seen.

I suggest we move toward a method of payment that emphasizes "value," defined for our purposes as a relationship of five (5) factors:

The salience of this equation is that it tells a lot about the valences of success and failure as far as health care providers are concerned—it shows the power of all the critical factors in their logical relationships. For instance:

• Value increases as quality is enhanced, for example through effective disease state management (DSM) initiatives, by better patient education and/or health care coordination, by giving constructive feedback such as comparative and normative statistics with the goal of quality improvement, or as accessibility improves, even as the cost stays the same

• "Value" improves for a given level of quality or accessibility as the relative cost decreases through efficiency measures, use of protocols and guidelines and other focused approaches.

I also suggest that for prevention, health stabilization or improvement, we should expect using the more coherent bio-psycho-social model, meaning we can no longer afford a silo mentality with doctor "A" working on the mind and soul, doctor "B," the corpus and practitioner "C," social services and survival needs.

"The Path to a High Performance U.S. Health System: A 2020 Vision and the Policies to Pave the Way" augurs for establishing a national health insurance exchange program that would "operate at national, state, and regional levels to allow participation of regional private health plans and integrated delivery systems." That would strengthen and reinforce patient-centered primary care, which, of course is a major problem as new graduates and FMGs saturate the ranks of sub-specialists in this country. In addition, it would foster the concept of the "medical home," which is vital, as well.

• The "Path to High Performance" expects "bundling"—a construct, more properly identified as an 'episode of care'—a view of all care over time, regardless of setting. This longitudinal aggregation of information should help discern which care is cost-effective, comprehensive and continuous, clinically integrated and efficient.

• Another critical concept in health care reform is incentive realignment, and with it, we can be sure that a 'carrot and stick' approach will follow. (I can hear the cry 'unfair!' already.)

• Unfortunately, the 'devil's in the details' and he "Path" lacks operational specificity. For instance, it stipulates that: "The effectiveness of these reforms depends on payers becoming more prudent purchasers." How? Will practitioners cooperate, and if so, for how long if data collection interferes with clinician-patient workflow or if they receive poor grades on public report cards? In a sense, one could argue that health care is still a cottage industry when it comes to data generation and information sharing.

• And, when we have the necessary data to know what is going on in health care, there's the lingering fear that it will be leaked, breeching confidentiality or it will be used against the provider.

• How does the Path "Correct price signals in health care markets to better align payments with value"?

• How does it "Accelerate adoption and use of health information technology" (HIT) for doctors who are already overwhelmed by information technology? Or,

• Cultivate "accountable leadership and collaboration including a "Center for Comparative Effectiveness and Health Care Decision-Making"? Or,

• Provide for "more transparent information.... with benchmarks of top performance"?

• Target public health initiatives? Or,

• "Design health insurance benefits to encourage and support preventive care and essential care for chronic conditions, with positive incentives for patients to engage in health promotion and keep existing chronic conditions under control?"

The challenge to reforming healthcare has six (6) critical 'managed care'-like components:

1) Methodically measure and then manage.

2) Notwithstanding concerns, build a 'comparative effectiveness' database that recognizes excellence, especially in primary care.

3) Follow the 'medical home' concept, assuring that the care delivered is both continuous and comprehensive.

4) Keep an eye on appropriateness, especially by using juried standards, non-prescriptive guidelines, and cost sharing; this is intended to modestly teach accountability both for clinicians and patients, while not erecting access barriers. (An example of the latter is using cost—minimization or cost-only to decide about coverage.)

5) Make quality improvement, continuous and utilization review and monitoring, fair and transparent.

6) Align all incentives: once you can identify the 'best practices,' celebrate them and compensate accordingly.

Source of the Commonwealth Fund Report's data:

The Lewin Group

technical report, "The Path to a High Performance U.S. Health System: Technical Documentation" provided data and parameters used to estimate 2010—2020 impacts.

For more discussion please see the ongoing Series, "Managed Care 101 in 2010" (Parts XI-XV).