Tuesday, March 26, 2013

The difference between belief and serious work

I have to hand it to the Commonwealth Fund.  They are true believers.

First assert this:  "We know the current fee-for-service model of payment, in which providers are paid per service or test, incentivizes providers to deliver more, and more expensive, care."

Then, create a scorecard on "payment reform" to assess the degree to which providers are paid in accordance with other methods that purportedly deliver better care.

Then summarize:

The 2013 Scorecard tells us just 11 percent of private health care payments to doctors and hospitals are tied to performance or designed to cut waste. By comparison, 89 percent of payments are made through payment methods that do not have a quality or other performance components and the traditional fee-for-service system.  Among payments tied to value, just 60 percent involve providers taking on a share of the risk, meaning they stand to lose money if they do not meet certain quality and efficiency measures or exceed a budget. The rest are in programs like pay-for-performance, which offer incentives for providing high-quality care, but do little to discourage overuse or inappropriate care.

Oh boy. The lack of analytic rigor with regard to the first assertion carries through to the final exhortation:

Catalyst for Payment Reform, an employer-founded nonprofit focused on creating greater value in health care, has a goal for the nation: at least 20 percent of health care payments will be value-oriented by the year 2020. The Scorecard results show we have serious work to do. 

Here's my take--and I am open for correction:  I know of no substantive analysis that shows that the clinical variation that exists in the United State and across the world, across all methods of payment and institutional delivery systems, is tied to the rate design used to pay for care.  I know of no substantive analyses that shows that the use of methods included in the "reform" definition offered by the Commonwealth Fund have made a difference, over time, in the health care costs incurred in various regions.

I do know that a substantial portion of society's health care costs are spent on an incredibly small percentage of the population.  Rather than trying to redesign an entire system, why not focus on improving case management of that small percentage?  Rather than trying to transform an entire payment regime into a risk-based system that has incredible complexity--in terms of allocating that risk across and within a provider network--why not simply pay cognitive specialists more, so they can spend more time with patients and keep the patients away from expensive tests and hospital admissions?

Yes, we have serious work to do.


clsmt said...

why not simply pay cognitive specialists more, so they can spend more time with patients and keep the patients away from expensive tests and hospital admissions?

Because in a zero sum game (which healthcare funding is), this would mean that hospitals and specialists would get paid less. Hospitals might go along with this but the specialists that control the AMA never will.

Paul Levy said...

If it is a zero sum game, how can capitation (i.e., global) payment ever work, either? See my point about allocating global budgets among the various specialties.

Brad F said...

I could not agree more, and felt the same way as soon as I read the release.

Payment method not what I think about; our HC ATM may be broken, but our medical culture needs the overhaul.

Incidentally, I am a delegate in the AMA HOD, and without question, discussing pay disparity with proedurealists and cognitivists in the same room--explicit or implicit--generates the most controversy amongst any topic (aside from ACA). Good luck with that.

Check out the table btw:



Susan Scherer said...

Your blog is quoted "why not simply pay cognitive specialists more, so they can spend more time with patients and keep the patients away from expensive tests and hospital admissions?"

I agree with concentrating in areas where better practices can reduce waste while improving patient outcomes. That is why our company Beacon Oncology Nurse Advocates concentrates on enhanced and open communication between patient, familiy members and all proviers incolved in the cancer patients treatment to reduce poor patient outcomes, confusion, readmissions, wasteful and duplicate testing. To name just a few examples. It is important as ever to work on communication as more patiets will enter a all ready and overburdened healthcare system.

Budd said...

Your post is absolutely, completely, fully right on.

BTW, the fastest growing insurance trend in the last few years is high-deductible, which is the most anti-primary care system imaginable, while it keeps up full coverage of every wasteful, high-tech, interventionist, overpriced procedure and hospitalization known to man.

Peter said...

Amen, Brother. A-a-amen.

Suzanne Delbanco said...

Paul, thank you for sharing your thoughts. Now that I have had some time, I've shared mine; as they exceed the space limit here, please visit


Paul Levy said...

Thanks, Suzanne. I'll leave it to others to review your post and offer their thoughts.