Catalyst for Payment Reform (CPR), released its first annual National Scorecard on Payment Reform.
The Scorecard shows that only about 11 percent of the health care dollars we pay to doctors and hospitals today are value-oriented -- tied to how well they deliver care or create incentives for both improving quality and reducing waste. Almost 90 percent of payments reported remain in traditional fee-for-service, paying providers for every test and procedure they perform regardless of necessity or outcome, or in bundled, capitated, or partially-capitated payments without quality incentives.
Within the 11 percent of payment that is value-oriented, the Scorecard finds that 43 percent of those payments give providers financial incentives by offering a potential bonus or added payment to support higher quality care, such as fee-for-service with shared savings. The other 57 percent of payments put providers at financial risk for their performance if they do not meet certain quality and cost goals, such as bundled payment.
The National Scorecard on Payment Reform utilizes the National Business Coalition on Health’s eValue8 health plan survey platform and the project was conducted in partnership with NBCH and the following business coalitions: the Colorado Business Group on Health, the Memphis Business Group on Health, the Northeast Business Group on Health, the Pacific Business Group on Health, and the Virginia Business Coalition on Health.
The plans responding to the Scorecard questions represent almost half of the commercially-insured lives in the U.S. While Scorecard findings are not wholly representative of health plans across the U.S., they offer a preliminary baseline against which to measure progress toward value-oriented payment in the commercial sector.
“While we have made progress, our approach to health care payment in this country needs to evolve much further,” explains Suzanne Delbanco, executive director, Catalyst for Payment Reform. “TheScorecard reveals that we make the vast majority of payments for health care on a fee-for-service basiswithout any rewards for quality and efficiency. We know traditional fee-for-service payment creates incentives for waste and inappropriate care.”
While progress has been made and even Medicare will be putting 10 percent of its reimbursement to hospitals at risk for their performance on quality and safety measures by 2017, Robert S. Galvin, MD, founder of CPR and CEO of Equity Healthcare LLC explains, “Today’s results suggest that the private sector needs to re-double its commitment and efforts around payment reform if we want more affordable and better quality care.”
It is clear that major purchasers across the country are coming to the same conclusion: that we must change how we pay hospitals and physicians if we want to get safer, higher quality, and more affordable care. It is also clear that purchasers are beginning to understand that they are the stakeholders that must move this change forward, and not depend solely on their health plans or providers to drive this change. MBGH's August 29th Annual Conference will provide Memphis-area employers with a better understanding for why we must move in this direction in Memphis and will provide examples of how employers, coalitions, and providers in other markets have made it happen.
Read more from CPR's Scorecard here.