Cut costs, raise quality: Payment reform top priority in health
care, experts say
Health Affairs briefing convenes experts in field to assess
strategies for bending the cost curve.
Curbing the growth of health care spending is a far greater issue
than how to finance health care reform, according to Michael
Chernow, professor of health policy at Harvard Medical School. In
remarks at a Health Affairs briefing on September 9, Chernow
said that health care spending growth has exceeded income growth every
year for decades, adding that the government’s mission should be
to “preserve value as we slow spending.”
An ever-increasing percentage of Americans’ personal incomes is
devoted to health care, and experts see this percentage increasing
rapidly in the coming years. How to slow the rising spending—and
predictions for future trends in health care reform—is the theme
of the September/October
issue of Health Affairs, which was previewed at the
briefing.
Achieving lower health care costs without depriving patients of
needed treatments was a focus for Henry
Aaron of the Brookings Institute. He said, “It is
necessary to identify what procedures are effective at reasonable cost,
to develop protocols that enable providers to identify in advance
patients in whom expected benefits of treatment are lower than costs, to
design incentives that encourage providers to act on those protocols,
and to provide research support to maintain the flow of beneficial
innovations.”
The main reasons for increased health care expenditure were
identified by Joseph
Newhouse of Harvard University: growth in income (29–43% of
total growth in expenditure); changing medical technology
(27–48%); aging of the population (7%); and increased insurance
coverage (11%). In the future, Newhouse expected insurance companies to
be less permissive on reimbursement. His solutions included less
“low-value care” and better patient adherence.
Payment reform was the primary concern of Mai
Pham, senior health researcher at the Center for Studying Health
System Change. This area is susceptible to “political
micromanagement by Congress, the White House, and the direct lobbying of
CMS itself,” she said. Politics are not data driven, economically
sound, or transparent in their making, Pham added, and even when CMS can
correctly interpret lawmakers’ intentions, it often lacks the
funds to carry them out.
Pham posited two solutions: Implement a well-funded Medical Policy
Board, similar to President Obama’s proposed Independent Medicare
Advisory Council, with high-prestige members accountable to both
President and Congress, and make reviews of CMS and MedPAC more
independent.
Concluding the discussion by identifying better ways to pay for
health care, Harold
D. Miller, executive director of the Center for Healthcare Quality
and Payment Reform, said that comprehensive care payments are needed to
give incentives to keep patients healthier and lower the use of costly
services. He argued against current fee-for-service payments, as they
“pay more for bad outcomes and less when people stay
healthy.” Two concepts have the potential to address this problem,
he added: the episode-of-care payment (ECP), and comprehensive care
payment (CCP). ECPs—single payments for all care needed from all
providers in an episode—have been shown to save, on average,
10%–40% per episode, Miller said. CCPs provide single payments for
all care needed in a year, and these are used in the Minnesota Patient
Choice program. Miller said they are working well, generating savings
and producing quality care.
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Beth Farnstrom, (bfarnstrom)
Posted September 18, 2009, 11:00 AM EDT
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