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The Payment Reform Landscape: Public-Private Alignment Is Critical

In the past few years, a growing number of state health agencies have formed partnerships with large, private employers and/or commercial health plans to realign efforts and resources and change how we pay for health care. The ultimate goal of these partnerships is to shift from volume-based health care payment models to value-based models to improve the quality and cost of care.

Public-private alignment is important for a number of reasons. Alignment allows both state and commercial payers to send clear messages to providers about the expectations they have in moving to a more value-based health care payment and delivery system. This gives providers direction when it comes to deciding what to target and invest in to improve the care they offer. It also can help streamline quality measures and reduce providers’ administrative burden.

Because of the crucial role that these new public-private partnerships can play in improving health care systems, we need to look at them more closely to understand where they are working and how they have achieved success. What are the “lessons learned” for other states, and how can we spread best practices?

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Contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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Why I Oppose Payment Reform

I recently gave the keynote address at the New York State Health Foundation Conference “Payment Reform: Expanding the Playing Field.” This blog post is adapted from those remarks (you can watch the half-hour speech beginning around the eight-minute mark).

I had my epiphany shortly after I announced my departure from the National Academy for State Health Policy (NASHP) about nine months ago. In an effort to help find my successor, I contacted some executive search firms. One firm quoted what they referred to as the “market price.” When I pressed them to tell me how much effort this price represented, they declined to do so. Ultimately, I recommended that NASHP contract with a search firm that charged by the hour.

It was then that I realized that, given the choice between capitation (a fixed fee for the outcome I desired) and fee-for-service (an hourly rate with no accountability for the outcome), I, as a purchaser, chose fee-for-service. Only a hypocrite would go around talking about the importance of payment reform, while secretly conducting business the old way!

Having given the matter some further thought, I present my five reasons for opposing payment reform:

1. The premise of payment reform is flawed.

The major actors in today’s health care system have thrived in the old payment model, which rewards volume: filling beds, making referrals, conducting tests, and the like. We now say we want them to improve population health and clinical outcomes while holding down costs. Different competencies are required to achieve these different objectives. There is no reason to expect that the people and institutions that were successful under the old model are the best people and institutions to charge with carrying out the new model.

 

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Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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