Aug. 30, 2014 SIGN IN | REGISTER

Turning Up the Heat on Payment Reform | Commentary

Fewer preventable admissions and readmissions, increased use of lower-cost care facilities in lieu of the emergency room, expanded use of generic drugs, and reductions in unnecessary lab tests are just a few notable improvements. In addition, health plans and providers can partner more effectively to improve care coordination, disease prevention and better chronic illness management. Since much of the piloting of this work is complete and powerful tools are already established, broader implementation could produce results even faster than they have in Minnesota.

With this tangible progress, an important question remains — how might we expand on this success? As Congress looks to retool the system for physician reimbursement through Medicare, elements of value-based payment reform are under bipartisan consideration. A move to this payment model by the largest payer in the health care market — the federal government — could be the game-changer needed to lead the entire industry to a system that rewards results over volume. We strongly support the shift from fee-for-service to value-based payment and applaud the bipartisan effort in Congress to achieve it.

Given other trends in play, the momentum behind value-based payment may be difficult to stop. For example, as consumers continue to pay more of their own health care costs, we expect their demands for proof of value to strengthen. It is one thing if your insurance company pays the bill, but another entirely if you do.

Change won’t be easy. It will require a commitment to more cost transparency, more public reporting of data on quality and providers assuming some financial risk for not meeting established goals. These are newer concepts in health care, but there are working models in place for all.

Working through these challenges will undoubtedly make us better at what we do. Despite the temporary difficulties, the benefits of replacing “more” with “better” far outweigh our reliance on a system that costs far too much and delivers too little.

Patricia Smith is president and CEO of the Alliance of Community Health Plans and Mary Brainerd is president and CEO of HealthPartners.

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