We sit down with HealthFlock contributor Bob Wells to discuss the need for payment reform and the progress made so far.
Bob Wells is an executive with more than 25 years of experience in delivering technology and service solutions to healthcare provider organizations either in the acute or ambulatory medical settings nationally and internationally. He has held senior level positions with industry leading firms such as McKesson and Per-Se Technologies. Mr. Wells is a contributor to HealthFlock, a healthcare blog run by the Atlanta Journal-Constitution. He received his undergraduate degree from the University of Pennsylvania, Wharton School of Business.Why is the need for Payment Reform so vital for the future of healthcare?
Payment Reform is an initial step to a multi-pronged strategy reducing healthcare costs. It is a means of constraining healthcare costs without compromising quality of care through aligned reimbursement and incentives. This controlled change within healthcare reimbursement is a foundation to right size the cost of healthcare as a percentage of GDP without compromising patient care.
Which approaches do you think show the most promise?
There is an underlying model that is proven to reduce costs and improve the quality of care - bundled payments. The Health Care Financing Administration demonstration project, called Medicare Participating Heart Bypass Center Demonstration, was implemented in 1991. The organization that produced the highest level of savings, St. Joseph's of Atlanta used a financial incentive model to promote an alignment of physicians and the healthcare system to work together in reducing the cost of care and improving clinical outcomes.
The lesson learned for all current (ACOs, population management) and future payment reform approaches is that financial incentive models need to be structured to support a tighter alignment in the delivery points of care to reduce costs with the controls in place to ensure the quality of patient care is not compromised. Bundled payments is a model that can stand on its own or be a foundational component to more comprehensive approaches such as ACOs and population management.
What are some "small wins" you've seen in the Payment Reform space over the last couple years?
The CMS Acute Care Episode (ACE) Demonstration project using bundled payments at Exempla St. Joseph's hospital in Denver, Colorado for Cardiovascular procedures is one example of how Payment Reform has reduced costs over the last couple of years.
I have also seen numerous examples of cost reductions for medical procedures through shared savings (e.g. Gainsharing) projects where the alignment of goals between the physicians and a healthcare provider organization created a collaborative environment that achieves the best of both worlds; cost savings and high quality of care. This is an example of a financial model supported in the recent CMS demonstration and innovation projects.
Stay tuned for part two of our three-part series with Bob Wells!
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