The time has come for healthcare providers to transform into practises that can provide superior care at a reduced cost and with greater patient satisfaction. This is what private and governmental payers desire. As we shall see, they are without options. Those providers who comprehend this and are willing to collaborate with payers to achieve these objectives will likely be more successful in the future. The practise transformation will be lengthy and challenging, but those who are willing to ‘perspire’ while focusing on the Triple Aim will be successful, and the staff, both clinicians and support staff, may appreciate the voyage as their patients become healthier.
The purpose of this newsletter is to explain why the transformation is necessary and to offer suggestions for successful practise strategies. I will discuss additional successful practise strategies in 2018 newsletters. Some of these will be based on my experiences assisting clients in their transformation, while others will be derived from the literature I frequently read and my contacts with local provider networks.
In the late 1970s and 1980s, payers began forming HMOs by contracting with providers. The expectation was that they would be able to rein in the escalating costs of providing care. These costs were carried on to enterprises that offered health insurance to their employees and their families, as well as to individuals. Payers entered into contracts with providers they believed could provide superior care at lower costs. This arrangement failed, and patients were angered that they could not see their preferred providers. The costs of contracts with businesses and the costs incurred by consumers continued to rise consistently. In response, businesses increased their contracts’ deductibles and copayments, shifting more costs to employees and individual consumers. This increase in individual costs has persisted to the present day. One of the issues with HMOs and other limited networks at the time was that physicians were still compensated on a fee-for-service basis, with little regard for the quality of care. Today, the continuous increase in healthcare costs for businesses and individuals cannot be sustained, or only the wealthy will be able to afford quality coverage.
Because the old insurance models were no longer viable, private payers began to pay for care based on its value. Bundled reimbursements for joint replacement surgery and the establishment of Accountable Care Organisations were among the earliest examples of the shift to value-based care. Additionally, two acts of the United States Congress encouraged the incremental transition to value-based care contracts. The first was the Patient Protection and Affordable Care Act. This mandated that payers who sold products on state insurance exchanges pay for a minimum set of provider services and provide preventive care at no cost to the patient. The act also established a website that contrasted the value of various plans on the exchanges, allowing consumers to purchase the best-value plans. Additionally, businesses purchased plans with a minimum quantity of services.
Beginning in 2017, MACRA (Medicare Access and CHIP Reauthorization Act) compelled providers to transition to providing services based on value. Indicators of value were established by the act, and a portion of physician reimbursement was contingent on meeting annually defined benchmarks.
I believe it is evident that private payers will continue to contract with providers based on the value of the services provided for the foreseeable future. With these payment models, providers who provide the finest services at the lowest costs will be successful.
In my region, Mercy Health of West Michigan and Blue Cross Blue Shield of Michigan have partnered to provide affordable care and insurance products, including a Medicare Advantage insurance product. This product requires the use of Mercy Health Physicians and one of four local hospitals. Mercy Health is able to provide Blue Shield with the quality of care they require because Mercy Health physicians have been certified at level 2 or 3 by the NCQA Patient-Centered Medical Home since a considerable amount of time. It has been demonstrated that NCQA PCMHs meet the Triple Aim. Physicians at Mercy Health have laboured for years to attain certification as patient-centered medical facilities. As a result, Blue Cross and Blue Shield has increased their reimbursement.
According to the article “PCMH accreditation: Is it worth it?” published in medical economics, it makes economic sense for primary care providers to become PCMH-certified. There are numerous agencies that certify primary care facilities as medical homes. Since 2009, Blue Cross Blue Shield of Michigan has certified facilities as medical residences. Physicians at Mercy Health and other practises that qualify for enhanced service reimbursement. Nationally, NCQA, a federal agency, certifies facilities as PCMHs. I believe that all primary care providers should investigate PCMH certification by contacting their contracted payers to determine if additional reimbursement is available. CMS is contemplating expanding its definition of PCMH to include certifications outside of its current demonstration project so that additional practises can qualify for MIPS-based enhanced reimbursement.
A second strategy for achieving the Triple Aim is to concentrate on the social determinants of patients’ health. These factors include cultural origin, income, gender, and age, among others. In the October 2017 issue of MGMA Connection, the article “Building a Population HEALTH Strategy that Physicians LOVE” recommends this strategy. Social determinants should be prioritised in order to surmount barriers to good health that individuals may face. Occasionally, this will necessitate that a practise establish relationships with local non-profits that can provide resources for their patients that influence the outcomes of the care the provider provides. Meals on Wheels and The Salvation Army are two organisations with which I am familiar that I believe would be beneficial.
I recently visited my local Meals on Wheels programme and discovered that one of their primary objectives is to assist their clients in remaining in their residences rather than entering an assisted living facility. In addition to having limited income, clients of Meals on Wheels have limited mobility and difficulty preparing their own food. By providing clients with nutritious meals each week, they are able to remain in their own residences, which they value. Also, volunteers who deliver the meals are instructed to monitor their clients’ health and report any changes.
I also accompanied a Meals on Wheels registered nurse to a client assessment at the client’s residence. The nurse collected not only information about the client’s income and familial support, but also extensive information about the client’s general health, including the number of accidents in the previous year. My experience suggests that a healthcare organisation may wish to formalise a relationship with organisations like Meals on Wheels in order to maintain or improve the health of patients who are clients of such organisations.
Recent evidence indicates that the fee-for-service model will be supplanted, at least in part, by value-based care. It will take a considerable amount of time to determine whether this new reimbursement model will significantly impact the rate of healthcare cost inflation. Patient-centered medical facilities have demonstrated that costs can be reduced while care quality is enhanced. For the foreseeable future, providers must concentrate on the transition to value-based care organisations and investigate local resources that may assist their patients in overcoming obstacles that impede the care they receive.
Read “The Road to Affordability: How Collaboration at the Community Level Can Reduce Costs, Improve Care, and Spread Best Practises” from the Health Affairs Blog on November 14, 2017 for a different perspective on the transformation of healthcare organisations into value-based organisations. It provides several excellent examples of the transformations occurring in other regions of the United States.
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