We sit down with HCI3’s Francois de Brantes, one of the keynotes for June's Lean Healthcare Transformation Summit, to talk about the need for Payment Reform, the progress made so far, and the challenges that still remain.
Why is the need for Payment Reform so vital for the future of healthcare?
In common vernacular, it's hard to be good when you're encouraged to be bad. And that's what current financial incentives - those directed to providers, those directed to the suppliers in the industry, and those directed to consumers - do, they encourage pretty much everyone to be bad.
Payment Reform should address the first two constituents, providers and suppliers, by - and this is an awkward turn of words, but important - not discouraging them to be good. This is actually one of the most, and oftentimes ignored, important principle of payment: first do no harm. Done right, payment reform could flip the industry on its head and propel it to the heights we believe it can reach.
Which approaches do you think show the most promise?
Any approach that meets the following criteria:
Helps the physicians and other clinicians to focus on clinical management
Ties good clinical management to good financial outcomes
Avoids linking provider financial outcomes to the "luck of the draw"
Encourages and promotes full and timely transparency of price and quality to the general public
Creates co-responsibility of clinicians around a patient's outcomes, including avoidable complications.
Very few current approaches meet all these criteria because designing and implementing such a payment reform effort is hard, harder than the quick shortcuts that most want to take. However, we have to recognize that the shortcuts taken to-date have simply led us into the Quality Chasm, and we now need to climb out of it.
What are some "small wins" you've seen in the Payment Reform space over the last couple years?
A greater desire from providers to accept transparency of cost and quality
A general recognition that the "anything goes" days are pretty much over
CMS finally getting into the payment reform game
Medical specialty societies publicly recognizing that some services are overused as part of the Choosing Wisely campaign
Some health plans making the hard but necessary decision to move away from fee-for-service and invest in claims systems that can operationalize value-based payments
What challenges remain?
A bloated industry that preys on Americans to the tune of $750 billion a year and will fight hard to keep every penny
This is a little like asking Sicilians in the 1970s what challenges remain after one mob boss has been killed or captured - there are plenty more where the dead one came from and they're not going to give up without a fight.
What advice can you share with leaders who want to address Payment Reform?
First, there are no technical, legal, regulatory or operational challenges to payment reform that remain unaddressed. All have been looked into and solutions exist to each challenge.
Second, and related to the previous answer, the agents of the status quo - those who feed on the waste in the system - will resist any and all attempts to reduce the size of the trough they're feeding from. As such, it all boils down to courage. So the advice is to strap on the shield, be ready for battle, and never waver.
What would you say are the most important next steps toward Payment Reform?
CMS needs to go in bigger and stronger, and with more than ACOs or Medical Homes.
Employers need to take matters into their own hands if their health plan administrators don't start delivering on payment reform
Health Insurance Exchanges should compel the participating plans to use value-based payments instead of fee-for-service
States have to get serious about adopting legislation on transparency of health care prices and quality
What questions should healthcare leaders ask (of themselves or others) when considering Payment Reform?
Do I have the guts (or do they have the guts) to go all the way?
What are some tips for engaging physicians or staff in payment experiments?
There's only one - make sure you're minimizing negative incentives, i.e. stuff that can lead the clinicians to focus on something else than providing good clinical management with appropriate resources.
Any resources you'd like to share?
Read Frederick Herzberg's Theory on Motivation, which was one of the most reprinted HBR papers.
For more information about Francois' role in the 2013 Lean Healthcare Transformation Summit, check out the registration page here.
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