Payment Reform Really Works

At the 4th National Pay for Performance Summit in San Francisco on March 10, a Mini-Summit on Payment Reform organized by the Center for Healthcare Quality and Payment Reform and the Network for Regional Healthcare Improvement demonstrated that significant reforms in healthcare payment systems can be made and that they result in improvements in both quality and cost of healthcare. You can download the PowerPoints and audio recordings of the presentations below.

Harold Miller, Executive Director of the Center for Healthcare Quality and Payment Reform and CEO of NRHI, chaired the Mini-Summit and gave an overview of payment systems that remove the problematic incentives in the fee-for-service system without putting healthcare providers at financial risk because they care for sicker patients, as traditional capitation systems did. He described some of the major implementation issues that regions face in implementing payment reforms, and showed how they can be overcome.

Ann Robinow, President of Robinow Consulting, described the Patient Choice Health Care Payment model, which pays healthcare providers using a global fee. The providers, rather than payers, determine the fee, and consumers choose providers based on the providers' cost and quality. The Patient Choice system shows that consumers will choose providers based on value, and that providers will lower their costs in response.

Gary Oftedahl, Chief Knowledge Officer for the Institute for Clinical Systems Improvement, described the DIAMOND Initiative, which has dramatically changed the way both primary care physicians and specialists are paid for treating patients with depression. All commercial payers in Minnesota have jointly changed their payment systems consistent with this new payment model, and outcomes for patients with depression have improved dramatically.

Francois de Brantes, CEO of Bridges to Excellence and the National Coordinator of PROMETHEUS Payment, described how episode-of-care payment systems are being implemented in several communities around the country. He described some of the false myths about implementing episode payments, and showed the dramatic amounts of money that can be saved by identifying and providing the right incentives to reduce avoidable complications.

A number of regions around the country are planning or implementing payment reforms to achieve these kinds of goals. A more detailed discussion of alternative payment systems and where they have been implemented is available in the report Better Ways to Pay for Health Care: A Primer on Healthcare Payment Reform.

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