Payment Reform Key to Health Care Improvement

Paying for patient care instead of medical services may be one way to simplify a health system that currently generates more than 30 billion transactions a year, said experts at a Sept. 27 health policy forum here sponsored by the Atlantic Media Company/National Journal Group.

“We have gotten away from the concept of every person having a personal medical home, provided by a family physician, a general internist or a general pediatrician. We strongly believe that getting back to that concept and enabling that concept through payment reform … would be central to reorganizing our health care system,” AAFP EVP Douglas Henley, M.D., told the audience of health care stakeholders and Capitol Hill and federal agency staff members.

Currently, public and private health plans pay for office visits, procedures and hospitalizations. Those transactions have become the currency of the health care system, said Jeff Goldsmith, Ph.D., president of Health Futures Inc. and a professor at the University of Virginia, Virginia City.

Reimbursing physicians for the cost of caring for patients rather than for each individual service rendered could cut down on the 30 billion transactions a year that, under the current system, absorb a significant amount of staff time better spent on patient care, he said.

“We’re not paying for relationships, and we’re not paying for solutions,” said Goldsmith, adding that trust between plans and physicians has become so strained that there is little basis for experimenting with new payment models.

There have been a few success stories in the area of disease management, but health plans are not where they would like to be in coming up with innovative approaches to paying for high-quality care, said Carmella Bocchino, R.N., senior vice president of medical affairs for America’s Health Insurance Plans.

“I agree with you about the tension between the providers and the health plans,” she said, attributing it to a failure on the part of insurers to involve physicians in their initial attempts to implement pay for performance. However, during the past two years, physicians' groups, such as the AAFP, have worked with plans to develop appropriate measures as part of payment reforms.

Plans may have to take it one step further, though, said Henley, suggesting that payers should be more active in supporting physicians' efforts to adopt health information technology in their practices.

“Now is the time to invest in electronic health record technology so that we can communicate. The worst thing, whether in a physician office or a hospital, would be to simply go from paper to electronics and still not be able to communicate with the world or with each other,” he said.

Although the cost of EHR technology may have come down significantly during the past couple of years, there has been little recognition of the hurdles required to reengineer small physicians’ office around the needs of these systems, said Goldsmith.

“These are not just small businesses, they are failing small businesses,” he said. “The people themselves are so busy peddling on a bicycle that they can’t get off to get on another vehicle.”