Getting Beyond Fee-For-Service

Brian Klepper

Posted 12/02/13 on Medscape Connect’s Care and Cost Blog

ALP_H_BK_0010The catchy title of a recent Harvard Business Review Blog post, The Big Barrier To High Value Health Care: Destructive Self-Interest, suggested that the Institute for Healthcare Improvement (IHI) is forging arrangements that can overcome fee-for-service reimbursement’s propensity to drive excess. As the honest broker, IHI could advocate for arrangements of mutual self-interest based on the right care, better outcomes and less money. Employers and unions would get lower costs, with improved health and productivity. Health systems and health plans would win more market share (at their competitors’ expense), realizing longer term relationships that could facilitate sustainability as market forces intensify.

The substance of IHI’s description was less satisfying, though. Their principles – common goals, trust, new business models, and defining roles for competition and cooperation – are obvious ingredients in any workable business arrangement. But the authors never talked about the money. That left plenty of room for skepticism by those of us who have heard more than one CFO ask, “Why should we take less money until we have to?” What, exactly, is the incentive for health care organizations to moderate their care and cost patterns?

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Bundle in the Jungle

Bradley Flansbaum

Posted 12/09/11 on The Hospitalist Leader

First, before I discuss bundling as a method of payment for healthcare services, I wish to declare my neutrality on the subject.  The merits are appreciable if providers approach the implementation properly, and conversely, the detriments are equally clear if they (we) bungle it.  Enactment and downstream effects are so murky however, that prognostications are premature.

Second, bundling may not be the preferred payment method for all procedures or diagnoses.  Beyond CMS demonstrations and a scant sampling of commercial side ventures—all procedural—little to no chronic care evidence exists (COPD, CHF, sepsis).

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Buck for the Bang: Premium Med-Tech Pricing

Adi Renbaum

Posted 10/31/11 on Medical Device Daily.

Cook Medical’s Zilver PTX is likely to become the first peripheral drug-eluting stent (DES) to be approved in the U.S., after an FDA advisory panel voted unanimously in favor of the device on Oct. 13. Approval would give the sponsor, Cook Medical (Bloomington, Indiana) access to a peripheral arterial disease (PAD) market valued at $1 billion, depending on whose figures one relies.

I attended the Oct. 13 advisory committee hearing for the device and observed the panel members comment that this was among the best submissions they had seen in some time. Cook presented a clear study that met all primary endpoints and showed improvement over percutaneous transluminal angioplasty, the current standard of care. To non-FDA experts like myself, it seemed as though Cook was recognized for setting a new bar for conducting clinical trials and collaborating with the FDA.

I imagine that Cook Medical’s leadership was able to make all the right clinical trial investments necessary for the long-term viability of the product’s market value, not just the ones that were on display at the advisory panel meeting.

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Creating Value-Based Incentives for Primary Care

Brian Klepper and David C. Kibbe

First published 6/2/11 on the Health Affairs Blog

Copyright ©2011 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.

In a remarkable recent interview, Donald Berwick MD, Administrator of the Centers for Medicare and Medicaid Services (CMS), eloquently described his vision of value-based health care.

Paying for value is an incentive…The underlying idea of improvement is that American health care, historically built in fragments, often cannot achieve for patients what it really wants to achieve…Health delivery system reform refers to really reconfiguring care into much more seamless coordinated-care operations so that people, especially those with chronic illnesses, experience continuity of care over time and space.

So when patients come home from the hospital, there is a smooth handoff, and all the necessary information follows them. When they are seeing a specialist, that specialist is coordinating care with their primary care doctor.

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The Missing Link in ACOs: Patients

Mark Lutes and Joel Brill

First published 3/15/11 on Kaiser Health News

In 2009, researchers reported the discovery of “Darwinius masillae,” a small lemur-like creature that lived some 47 million years ago. Many paleontologists have postulated that D. masillae was the missing link, marking the point at which the evolutionary lineage of humans diverged from that of more distant primates.

It seems to us that, in the recent debate about accountable care organizations, one could also detect a missing link.

Quit The RUC

BRIAN KLEPPER and DAVID KIBBE

Originally published 1/21/11 on Kaiser Health News

Recently, a Wall Street Journal expose and a New York Times column by Princeton economist Uwe Reinhardt detailed how vast health care resources are steered by the American Medical Association’s Relative Value Scale Update Committee — or RUC, a secretive, 29 person, specialist-dominated panel. Since 1991, the RUC has been the main, if unofficial, adviser on Medicare physician reimbursement – how specific procedures should be valued – to what is now called the Centers for Medicare & Medicaid Services. Many Medicaid and commercial health plans follow Medicare’s lead on payment, so the RUC’s influence is sweeping.

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Harvard Pilgrim Health Care Goes Its Way, Thoughtfully

PAUL LEVY

Originally published on Not Running A Hospital

Harvard Pilgrim Health Care HomeLots of people are thinking about the form of payments between insurance companies and providers for health care services, but it is also important to think about how each such approach would be marketed as an insurance product to the population.

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