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Separating Past From Present
New Health Care Models Take Lessons From Past Reform Efforts
Today, there is another reform movement sweeping through the health care system. And Scherger again is excited by the prospects for fundamental change and reform. But this time, he is convinced that his faith in the emerging payment and delivery systems is well-founded, grounded in advancements in science and technology, and driven by the increasing availability of data that makes it possible to compare and contrast health care outcomes and costs.
- The managed care era of the 1990s largely failed because it often was more about managing costs than providing quality care, according to analysts.
- There is a greater understanding today of how primary care can improve quality, enhance access and control costs thanks, in large part, to the use of data and technological advancements.
- With data and other technological advancements, primary care physicians can engage in population management, making it possible to deliver more comprehensive and coordinated care.
The Importance of Data
"All of a sudden, the role of primary care changes," says Grundy. "Primary care physicians are no longer being paid to do an episode of care. They are being paid to deliver a healing relationship while collecting the data needed to manage their patients."
This, in turn, has paved the way for new and innovative payment and delivery models, such as the patient-centered medical home (PCMH) and accountable care organizations, which are based on a foundation of primary care. The PCMH and other emerging models of care recognize the value of primary care by relying on payment mechanisms that transcend fee-for-service to reward care coordination and the management of population health.
For example, CareFirst, a private insurance carrier in the mid-Atlantic region, launched a PCMH program in early 2011 that included 3,600 primary care practices in Maryland, Washington and Northern Virginia. Before creating the program, CareFirst determined that primary care physicians were in the best position to manage patient populations, particularly patients with chronic diseases.
"One of the drivers of health care costs is the presence of multiple chronic diseases in the population -- these are the people on multiple medications who are admitted to the hospital, readmitted to the hospital and who use the emergency rooms most frequently," says Chet Burrell, president and CEO of CareFirst. "If anyone is in a good position to understand what (these patients) need, it is the primary care physician."
By using data generated by the PCMH model, CareFirst is able to work with the practices to develop care plans for patients with chronic illnesses. "There is an enormous underlying effort to provide data to these (practice) panels," says Burrell. "We track all of the patterns of care for patients in the panels. We show all of this data to the panels."
CareFirst pays primary care physicians bonuses for participating in the medical home initiative and for developing care plans for their most at-risk patients. The practices also receive bonuses for hitting various quality, cost and performance metrics, giving primary care physicians an opportunity to potentially double the amount of money they are making with CareFirst.
In the first year of operation, the PCMH program saved $40 to $50 million in expenses when compared to net dollars saved against the overall projected cost of care -- impressive numbers for the first year, according to Burrell.
The use of data also has made it down to the physician/patient level, allowing physicians to use registries and other devices to collect information to gauge how well they are managing patients with chronic illnesses against other panels of patients with similar conditions.
"There was a third person in the (exam) room and that was the health insurance plan," says Scherger. "With managed care, our judgments were always being questioned, and we had to get approval to do almost anything. It was very onerous."
There is a much greater understanding today that primary care is the key to improving care and slowing cost escalation, and that primary care physicians and providers should be in charge of managing patient care, not insurance companies, according to Grundy and other analysts.
"The health plans have woken up to this, and all of a sudden, they are paying the primary care doctors to step up to the medical home level of care," says Grundy. "They are paying them a significant difference in rates for doing this."
Scherger, meanwhile, says the PCMH is symptomatic of larger changes that are occurring in health care. "We are converting from a money-driven entrepreneurial system that is not really in the information age into a true value-driven system," says Scherger. "The whole industry is being hit with the need to become value driven."
Primer on Payment Reform: Rewarding Value Over Volume
New Health Care Models Learn From Past