Skip to main content
Sister Publication Links
  • ESG: THE IMPLEMENTATION IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Digital Health
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Unwell in America
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Opinion
September 20, 2022 05:00 AM

Opinion: The imperative of reimagining the healthcare payment model

Suzanne Delbanco and Ellen Kelsay
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Suzanne Delbanco and Ellen Kelsay

    Suzanne Delbanco (left) is executive director of Catalyst for Payment Reform.

    Ellen Kelsay is president and CEO of the Business Group on Health.

    The two not-for-profit organizations we lead represent hundreds of large employers and other healthcare purchasers, which together provide health insurance for about half of all Americans. For over a decade, our members have demonstrated strong interest in value-based payment strategies that lead to better quality and affordability. These models for paying healthcare providers should be more broadly implemented, for numerous reasons.

    Healthcare costs continue to climb at an unacceptable rate. More Americans struggle to afford care and life expectancy has dropped for two years running.

    The legacy fee-for-service approach to paying healthcare providers further drives up costs by incentivizing providers to use more services, while discouraging them from investing in care delivery models that improve the appropriateness of care and prevent the need for medical services in the first place—by keeping people healthy.

    We know that a value-based system aligning provider incentives with the best health goals for patients has the potential to improve both care experience and outcomes, and mitigate costs for everyone involved: providers, health plans, patients and employers.

    While the past decade of experimentation with alternative payment models has delivered mixed results, there is reason for optimism. Several have demonstrated improvements for patients and providers, but there is growing consensus that it is time to focus on fewer models and getting them right.

    Leaders at health systems and other provider organizations should recognize the pursuit of coordinated, value-based care is growing among purchasers and embrace financial models enabling it. This means provider payment rate negotiations should start from a value-based care lens, centered on improving quality and keeping care affordable. The examples that follow feature elements of value-based care that more healthcare providers can certainly adopt.

    One example with promise is direct primary care, which eliminates fee-for-service payments and patient cost-sharing by instituting monthly payments to providers for patient care, often leading to reduced emergency department visits and hospitalizations and higher job satisfaction among providers. In other words, providers in direct primary-care practices are rewarded, financially and otherwise, when their patients stay healthy and are pleased with their care.

    Accountable care organizations hold providers collectively responsible for the overall costs, healthcare quality and outcomes of a group of patients. These organizations have seen success, especially when led by primary-care physicians. For several years, providers who form physician-led ACOs have achieved sizable savings in the Medicare Shared Savings Program, including 85% of those participating in 2020.

    Bundled payments, which can be thought of as a singular payment for an “episode” of care rather than payments for piecemeal services, have helped reduce the costs of cancer care for over a decade. And now they’re often used for surgical procedures. This approach rewards providers who deliver higher-quality care efficiently, often by coordinating patient care with other medical professionals. The current healthcare landscape would benefit from expanded bundled payment models because they enable providers to succeed financially via relationships with other specialties. This is not the case in a fee-for-service environment.

    Quote blue outline“We know that a value-based system that aligns provider incentives with the best health goals for patients has the potential to improve both care experience and outcomes.”


    When the primary driver of financial success for healthcare organizations is keeping patients healthy, rather than billing for more expensive care, providers are able to invest in services that may have otherwise been viewed as “money-losers” in a fee-for-service environment. Providers can then afford to deploy team-based care and other services, such as hiring social workers who can connect patients to community supports.

    Evidence also suggests that when providers have these capabilities in place, along with financial incentives to improve care for all patients, their performance on quality metrics can improve while simultaneously reducing disparities in outcomes. Such is the case of a Michigan-based advanced primary-care partnership between the state’s largest health plan and participating physician groups, which improved cancer screening rates overall, especially for those in areas with greater socioeconomic disadvantages.

    Employers and patients want these essential and holistic changes, which require alignment from health plans, healthcare providers and employers, among others. Industry leaders must be willing to share data and financial risk in service of patients to make this happen. Further, for these goals to be achieved contractually and otherwise, a spirit of long-term partnership is required. Providers and employers are recognized pillars in their communities; health system leaders must be willing to engage employers and their plan administrators for their mutual benefit.

    Download Modern Healthcare’s app to stay informed when industry news breaks.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    payment_WEB.jpg
    CMS proposes hospice payment bump
    payments-up_i.png
    CMS 2024 Medicare Advantage rate notice tweaks risk adjustment program
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Digital Health
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Unwell in America
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing