When it comes to health care payment reform, Dr. Robert Galvin, director of global healthcare for General Electric, is keeping his eye on MedPAC. That means I have my eye on MedPAC because I think major employers will be a huge influence on how health care reform evolves.
Here’s what I heard in my recent interview with Dr. Galvin:
There’s a lot going on in payment reform, and if you look just in the private sector, we think there are now well over 200 pay-for-performance pilots going on. If you look in Medicare, at least seven or eight of their demonstration projects are on payment reform. So, it is a really active area that is, frankly, a bit chaotic at the moment.
I think that with this new administration, the focus is going to go more and more to Medicare, and if you look at Medicare and look at what they’re doing in payment reform, that really drives you right back to MedPAC, which is the agency that advises Congress, particularly on Medicare and particularly on payment reform.
And so I think a good place to start is to look at what MedPAC is suggesting, and it turns out that what MedPAC is suggesting is really pretty similar to what’s going on in the private sector. And I see several big ideas going on. One of the big ideas is that primary care doctors need to be paid more, and that the re-balancing, as it’s called, between specialty care that pays more for more interventions–and the more invasive the intervention, the more it gets paid—is something that people are really looking at. And they’re using the word “re-balancing.”
I think there’s a big push toward coordination of care, and I think you see that in two ways. One is in this concept of medical home, which is the idea that primary care doctors would be paid a new fee that doesn’t exist yet for coordinating care, if they meet the requirements of a medical home. And the other coordination idea going on has to do with this idea of blended payment, or instead of paying hospitals through Part A Medicare and doctors through Part B in a disconnected fashion, that you actually give a lump sum on A and B around particular diagnoses, and then let the doctors and hospitals figure out how to share that money. That’s another kind of coordination play.
The third big thrust I see is in this idea of not paying either for errors or unnecessary care. You see this in the never-events policy where Medicare has listed several events that they are not going to pay for, and some private insurers have followed. And you see it in an idea from MedPAC which says that preventable re-admissions–and they think actually up to 20 percent of people who are re-admitted on the Medicare program could have been avoided with better coordination of care, medication compliance, etc.—that those preventable re-admissions should be paid at a degree much less than the original DRG would tell you
So, those are three big trends – primary trend, coordinated care, and really looking at not paying for errors.