Healthcare Business News
Karen Ignagni, president and CEO of America's Health Insurance Plans

AHIP backs quick adoption of payment reforms

By Rich Daly
Posted: January 28, 2013 - 6:15 pm ET

A liberal group's entitlement-reform proposal elicited support from some payer leaders Monday.

The Commonwealth Fund issued a Jan. 10 report suggesting a series of health system changes that would mean an estimated $1 trillion in reduced healthcare spending for the federal government over the next 10 years. The bulk of the initiatives entailed acceleration and wide-scale implementation of payment and delivery changes that the Patient Protection and Affordable Care Act authorized on a limited test basis, such as various types of bundled provider payments.

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“We need to accelerate these models where they make sense,” said Stuart Guterman, executive director of the Commonwealth Fund Commission on a High Performance Health System. “We're not saying that the system ought to go ahead blind, but there is a lot that is known about some of these things.”

The report's call for widespread implementation of payment changes were praised by Karen Ignagni, president and CEO of America's Health Insurance Plans. Among the specific changes she praised was the report's call for attaching payments to quality across all types of providers instead of treating various “silos” of providers differently.

“The Commonwealth Fund did an excellent job talking about how we have to look across the board at all of this and what happens in the end with these various strategies,” she said at discussion of the report sponsored by the Alliance for Health Reform.

Similarly, Robert Galvin , operating partner of Equity Healthcare for the Blackstone Group, praised initiatives in the federal law encouraging some types of provider consolidation to increase efficiencies. The Blackstone Group is the world's largest private equity firm. Equity Healthcare helps manage healthcare for more than 30 companies that spend more than $1.2 billion annually on healthcare, according to the company's website. Research conducted by employers has found integrated health systems consistently outperform other providers in various quality measures “by a couple points,” he said.

The changes urged by the Commonwealth report would require new federal legislation to allow either sped up or widespread application of payment and delivery changes that the 2010 overhaul authorized on a limited basis, Guterman said.

The report also echoed the common response of Democratic members of Congress to Republican entitlement-reform proposals. Namely, that the federal government's spiraling healthcare costs can be tamed through full implementation of the healthcare law's payment and delivery reforms, instead of through significant cuts or eligibility changes to Medicare or Medicaid.

Despite their overall praise of payment and delivery reforms included in the healthcare overhaul, Ignagni and Galvin cited provisions that could become cost drivers.

For instance, a coming tax on insurance premiums could add to the growth in the price of coverage, Ignagni said. Also, Galvin said research is needed to determine whether cost reductions in federal health programs are leading to a shift in costs to people with private coverage. Such cost-shift questions were fueled by private research identifying some of the biggest provider price increases in localities that have launched accountable care organizations authorized by the 2010 healthcare law to control costs and improve quality.

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