Health Care Payment Reform

Dr. Bradley Perkins, chief strategy and innovation officer for the Centers for Disease Control and Prevention, tells me that Americans should change the words we use to describe our …well, I no longer want to use the term “health care” because that is too limiting. Read what he told me:

One of the things that we’ve been looking at very carefully is what is the current national dialogue  about health and health care? And it was clear that, for the most part, the dialogue has been about health care, and specifically about access to health care, uninsured people, quality of health care, and the cost of health care.

But the truth is that health is much broader than what happens in the doctor’s office. In fact, most of our health actually occurs outside of the doctor’s office, not as a result of health care. So, we’ve been working very hard to broaden the conversation in this country about what we need to become the healthiest nation in the world.

It’s going to require that all of us work together around notions that we’ve been talking about  as “health protection.” We feel like the word “prevention” is slightly narrow and sometimes gives the context that we’re only talking about what happens in the clinical world. “Health protection” might be a better concept or word to talk about a broader set of efforts around health promotion-how we encourage people to stay healthy;  around prevention -both clinical and community-level prevention; and preparedness-preparedness for emergency threats to our health, which we think are vital for national security.

Everyone agrees that payment reform is needed, but the enthusiasm for simply paying primary care physicians at a higher rate does not do much for George Halvorson, chairman and chief executive officer of Kaiser Foundation Health Plan and Kaiser Foundation Hospitals. Here’s what he thinks:

To make payment reform really work, we need to focus on the end points that we want to achieve in care delivery, and not focus on pieces or individual process units. We should set goals that say we’re going to cut the number of kidney failures in half-for example – and then use payment reform to incent the care delivery infrastructure to actually achieve that goal.

But the model unfortunately that people keep using is a model that focuses on little incremental units of care, or doing things like changing the reimbursement model for primary care doctors. Frankly, the suggestion that people are making is that we increase the primary care doctor payment level by 5 percent in the hopes that somehow the primary care doctors, as a result of that, would ultimately do something positive relative to preventing kidney failure. I think that’s far too indirect. I don’t think it’s a good, crisp business model.

We will be far better off if we identify the steps needed to reduce kidney failure, and then pay primary care doctors and specialists more for doing those particular steps. Instead of doing an indirect model that doesn’t really focus the energy and the creativity, we need a model that very specifically identifies targets, and then reforms payment relative to those targets.

One of the people with the most hands-on health reform experience in America is losing confidence that  much hoped-for federal-level reform will occur after the presidential election.

Jon Kingsdale, executive director of the Commonwealth Connector in Massachusetts, told me that America’s economic implosion may endanger the chances of health care reform proposals.

Clearly there’s a lot of interest and it’s a big domestic policy priority. Senator Obama has, in particular, identified that as a priority. However, the straightened financial circumstances are such that, on the one hand, there may be all the more need for it, but on the other hand, far fewer federal and state resources are available to finance reform. So, myself, I’m a little bit less optimistic than before the recent financial services meltdown and the accompanying federal bail-out. But I wouldn’t rule it out.

Kingsdale will speak at the 6th Annual World Health Care Congress in Washington DC.  One of the “lessons learned” from the Massachusetts experience is that, while waiting for legislators to turn their attention to health reform, the private sector can take a lead. Kingsdale appreciates “the tremendous effort that went into it on the part of private sector groups to try to promote reform, really for two or three years before the legislature even enacted something.”

That coalition of support, which is very broad, has stayed actively involved in the implementation as well. And that’s just, I think, a critical lesson. You know, frankly, we did health reform here 20 years ago under Governor Dukakis by a slim, it passed by a slim, slim majority, and never really was implemented. By contrast, there’s a very broad consensus here, and we’ve done everything we can in a difficult implementation process to actually build on and enhance that consensus.