Whither Next with Physician Whither
Next with Physician
Payment?
y
AcademyHealth, June 2010
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Hoangmai Pham, MD, MPH
Center for Studying Health System Change
Center for Studying Health System Change
Outline
• Policy goals in designing payment methods
• How proposed payment structures measure up
How proposed payment structures measure up
• Selecting from the menu
Caveats
• Need to disentangle payment method from structure of provider organization
– Single physician, multiple physicians in single organization, multiple organizations, physicians and hospitals
• Devils in the details
– Assess range of likely impact given many unknowns
(Some) Policy goals for payment
(Some) Policy goals for payment
• Fairly compensate for services
F il
t f
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• Better support for primary care
• Transform care delivery
Transform care delivery
– Encourage delivery of needed services
– Discourage inappropriate care (overuse)
– Improve integration, coordination, efficiency
• Without endangering access to physician services
• Intervening aims
 Clear lines of accountability for providers
Clear lines of accountability for providers
 Responsibility that tracks with ability to influence care
 Feasible implementation on a large scale
Proposed payment approaches in PPACA
Proposed payment approaches in PPACA
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Fee‐for‐service with medical home payments
FFS with shared savings (no downside risk)
FFS with “Value based” modifier
Evidence‐based FFS payment for specific services
Evidence‐based FFS payment for specific services
“Bundled,” “comprehensive,” “capitated” payments
• All of these could be combined with additional incentives for quality performance
How well do payments fairly compensate providers for services relative to costs?
Payment approach
h
Variations on FFS
•All FFS approaches still require corrections to underlying price distortions for other services
MH payments
•Pays for coordination services currently not well reimbursed
Shared savings
•No change
Value based modifier
•Providers could earn more or less than cost of service delivery
Evidence based payment
•Providers could earn less than the cost of service deliveryy
Bundled payments
Bundled payments
•Amount
Amount of up/down risk for providers depends on data used to of up/down risk for providers depends on data used to
determine payment levels (historical, normative, benchmarked)
Potential for supporting primary care?
pp
gp
y
(if they last beyond experimentation)
Payment approach
h
Variations on FFS
•Without corrections to underlying price distortions, primary care p
providers will not feel measurable relief
MH payments
•Pays for coordination services currently not well reimbursed
•But unlikely payment for investment costs
Shared savings
•Emphasis on coordination elevates importance of primary care
•Depends on how rewards are distributed within provider organizations
Value based modifier
•Depends on whether the constellation of “value” measures emphasizes services generally provided in primary care
•Depends on magnitude of adjustment to fees
Evidence based payment
•Neutral if confined to imaging services
Bundled payments
•Emphasis on coordination elevates importance of primary care
•Depends on how rewards are distributed across providers sharing the D
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di t ib t d
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bundle
Potential to encourage delivery of needed services?
Payment approach
h
Variations on FFS
•Limited by size of quality incentives relative to that of volume incentives
MH payments
•Proportionate to percentage of patients affected, strictness of qualifying criteria for practices, and magnitude of payments
Shared savings
Shared savings
•Depends on whether payers set quality “floors”
•Depends on whether payers set quality floors Value based modifier
•Proportionate to percentage of claims and physicians affected, magnitude of the modifier
Evidence based payment
•High potential to improve targeted services; limited/no effect on quality elsewhere
Bundled payments
Bundled payments
•Highest
Highest risk of stinting; could be off
risk of stinting; could be off‐set
set somewhat by quality somewhat by quality
incentives
Potential to discourage inappropriate care?
Payment approach
Variations on FFS
•Limited by availability of appropriateness measures
MH payments
Shared savings
•Some potential, particularly for services delivered by providers outside of the accountable organization. g
Value based modifier
•Limited by availability of appropriateness measures
EEvidence based id
b d
payment
•High potential to discourage specific targeted services; Hi h t ti l t di
ifi t
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i
limited/no effect elsewhere
Bundled payments
•Greatest potential to discourage volume, but effect on appropriateness still limited by available performance measures
Potential to improve integration and coordination?
Payment approach
h
Variations on FFS
MH payments
MH payments
•Concentrated
Concentrated responsibility on primary care providers, responsibility on primary care providers
dependent on PCPs leveraging cooperation from other providers
Shared savings
•Some potential
Value based modifier
•Slim potential
Evidence based payment
•Slim potential
p
Bundled payments
•Greatest potential
Potential to improve efficiency?
Potential to improve efficiency?
Payment approach
h
Variations on FFS
MH payments
MH payments
•Limited
Limited
Shared savings
•Some potential
Value based modifier
•Limited
Evidence based payment
p
y
•Some potential. Limited to the targeted services.
Bundled payments
•Greatest potential
Maintaining access to physician services
Maintaining access to physician services
• Physicians might refuse to accept Medicare patients
y
g
p
p
– Onerous reporting requirements
– Sudden drops in payment levels
p
p y
– Unable to absorb downside financial risk
• Physicians might leave specific markets
y
g
p
– Available practice structures not viable under specific payment methods
– Clash between local demand culture and new payment methods
• Physicians might shift out of specific specialties
Ph i i
i ht hift t f
ifi
i lti
– We’ve seen this movie already…..
Feasibility
• Variations on FFS within easiest reach
– Still dependent on mechanisms for large‐scale performance measurement
• Bundled payments are a different story….
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Prioritizing, defining bundles
Developing better risk adjustment methods
+/‐ setting historical vs. normative payment rates
Developing better performance metrics
Market evolution
Selecting from the menu
Selecting from the menu
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•
•
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Some from column A, some from column B
Judicious first steps, clear long term signal
Staged experiments, implementation
Multiple points of entry for providers at different
Multiple points of entry for providers at different stages of readiness to take on population care and/or downside financial risk
and/or downside financial risk