Earlier this year, the Commonwealth Fund Commission on a High Performance Health System issued an important report about how the United States can slow health spending growth by a cumulative $2 trillion from 2014 to 2023. A key strategy in the report is reforming how we pay hospitals and other providers to promote better value.
But as the old adage reminds us, “we can’t improve what we don’t measure.” 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. But we haven’t really had a sense of what proportion of payments coming from the private sector is still wrapped up in fee-for-service versus other forms—until now.
Today a new National Scorecard on Payment Reform, released by Catalyst for Payment Reform (CPR) with support from The Commonwealth Fund and the California HealthCare Foundation, offers the first-of-its-kind measurement of our nation’s progress on payment reform. 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 component 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.
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.
Catalyst for Payment Reform shared these results at a briefing in Washington, D.C., today, which included presentations by Commonwealth Fund President David Blumenthal, M.D., and CPR Executive Director Suzanne Delbanco. In the briefing, Delbanco explained, “We can do better and we must do better. CPR’s National Scorecard helps to hold purchasers, health plans, and health care providers accountable for progress. We can beat our 2020 goal by working together aggressively to reform our approach to payment.”
To this end, CPR gives employers several tools they can use to work with their health plans to ensure the plans prioritize payment reform. For example, CPR’s health plan user groups allow purchasers with the same health plan to meet quarterly with that health plan’s leaders to measure its progress toward value-oriented payment and share strategies. During a recent health plan user group call, purchasers were impressed by South Carolina Medicaid’s new policy: no payments for unwarranted, elective preterm births (as these have shown to be not only unneeded but also potentially detrimental to infants).
Along with the National Scorecard, today CPR also released a National Compendium on Payment Reform, a searchable, sortable database that catalogues various payment reform efforts under way across the nation. Plans and providers are encouraged to visit http://compendium.catalyzepaymentreform.org and add information about their own programs. The Compendium will grow over time, serving as a useful resource to employers, purchasers, plans, foundations, providers, and journalists.
We know changing how we pay for care is the next chapter in our effort to reform health care. We can’t have a sustainable health care system with traditional fee-for-service payment. Today’s Scorecard tells us we still have a long way to go. Fortunately, employers and other health care purchasers and stakeholders are working together to be part of the solution, setting goals and holding one another accountable.
