Scorecard on Value Based Payments

By Clive Riddle, October 3, 2014

Catalyst for Payment Reform has just released their second annual National Scorecard and California Scorecard on value based payments and payment reform made to providers by purchasers, funded by The Commonwealth Fund and the California HealthCare Foundation.

The universe they utilized to track and measure provider payments was based on the National Business Coalition on Health’s eValue8 health plan survey platform, in partnership with NBCH and these business coalitions: the Colorado Business Group on Health, HealthCare 21, the Memphis Business Group on Health, the Mid-Atlantic Business Group on Health, the Northeast Business Group on Health, the Pacific Business Group on Health, and the Washington Health Alliance.

What meets their definition of value oriented payments? They say they are in-network payments that are “either tied to performance or designed to cut waste” and that 40% of commercial payments meet this definition. What makes up the other 60%? They say payment types without quality incentives that include “traditional feefor-service (FFS), bundled, capitated and partially capitated payments.”

What comprises the 40% that is value oriented? Quality incentive driven Bundled Payments (0.1%) + Non FFS Shared Savings (0.2%) + Non FFA Non-Visit Payments (0.6%) + Shared Risk (1.0%) + Partial or Condition Specific Capitation (1.6%) + FFS and Shared Savings (2.0%) + FFS Based Pay and P4P (12.8%) + Full Capitation (15.0%) + All Other (6.7%) = 40.0%.

Here’s more of the numbers shared in this year’s scorecard:

  • 53% of value-oriented payments put providers at some financial risk if they fail to improve care or spend over budget
  • 38% of payments to hospitals are value-oriented,
  • 10% of payments to specialists and 24% of payments to primary care physicians are value oriented
  • Of these value-oriented payments to physicians, 71% of the total goes to specialists, and 29% to PCPs
  • 15% of participating health plans’ patient members are formally “attributed” to a provider participating in a payment reform contract

Kaiser Family Foundation’s 2014 Employer Health Benefits Survey 

By Claire Thayer, October 2, 2014

Findings from the latest Kaiser Family Foundation’s annual survey of employer-sponsored health benefits are now available in the 2014 Employer Health Benefits Survey. This annual survey of employers provides a detailed look at trends in employer-sponsored health coverage, including premiums, employee contributions, cost-sharing provisions, and employer opinions.  Here are a few of the key findings pertaining to trends in premium rates and worker contributions:

  • Average annual family premium: $16,834, a 69% increase since 2004 and doubled since 2002
  • Workers contribution to premiums: $4,823
  • Workers average deductible: $1,217, up 47% since 2009

The complete report, all 275 pages, includes comprehensive analysis, findings and lots and lots of charts! 



Problems with Accuracy in Health Plan Member Data

By Claire Thayer, September 24,2014

LexisNexis illustrates the types of problems encountered with accuracy in health plan member data in MCOL’s infoGraphoid this week:

Wondering if your member data is current and complete? LexisNexis offers a no-cost evaluation. MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and eleased each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.


Put Your Money Where Your Scalpel Is

By Kim Bellard, September 22, 2014

I propose taking value-based purchasing from the payor-provider contractual backroom and putting it in the health plan benefit design, where consumers directly see and are impacted by it.

One of the most troubling things about our health care system is the lack of accountability. Providers get paid pretty much regardless of how patients actually fare under their care, and often even if demonstrable errors are committed.

Patients don't get a pass when it comes to blame either.  They don't often take good care of themselves, they don't always follow instructions, and they sometimes opt for high risk and/or unproven procedures with limited chance of success.

The mantra to combat all this is "value-based purchasing," a phrase whose meaning, like beauty, is largely in the eye of the beholder.  In theory, it involves adding performance-based financial incentives to payment arrangements, and may also include bundled payments, shared savings programspay-for-performance, or even penalties.

Frankly, I think none of these go far enough, nor do they adequately involve the patients.

I want to accomplish a few things with my proposed plan design approach.  One, I want to more directly relate provider payment to patient outcome -- not in the aggregate, as many incentive programs try to do, but at individual patient level.  Second, I want to reduce how much other health plan subscribers have to subsidize care that is of little benefit.  And third, I want to stop rewarding providers for care that has little or no positive impact.<

The following chart outlines how these might be accomplished (assume the "base" plan design was 80/20):

  Percent of Allowable Charges:  
  Insurer Patient Provider    
Condition much improved 100 25 0   50%
Condition a little better 80 20 0   25%
Condition no better 60 15 0   10%
Condition a little worse 40 10 0   10%
Condition much worse     -100   5%
  Total Weighted Costs    
  80 20 -5    

In other words, a surgical procedure whose allowable charges were $10,000 would pay the provider $12,500 (125%) if things went really well for the patient, only $7,500 (75%) if the patient was no better after it -- and the provider would actually owe the patient $10,000 if he/she ended up much worse after the surgery.  Providers would not be able to balance bill patients for any of the reductions.

If I've done my math right, with the assumed prevalence rates shown above, the payouts are revenue neutral for payors (weighted cost of 80) and patients (weighted cost of 20), prior to the provider payback. 

Health plans and providers who want to test this approach would probably want to do at least a year of data collection so they can fine-tune the final payment levels for the different stages, based on the measured prevalences.  I think we might be surprised by what we'd learn.

There is good evidence that direct engagement by physicians can boost patient use of portals, and I can't

think of anything that would give physicians more incentive to do so than directly tying their payments to such use. 

Ideally, I'd like to see this approach applied not just to the surgeon's fees, but to bundled payments including the hospital/facility and any ancillary providers.  The more providers who have a direct financial stake in the actual outcome, the better.

What we need is a surgical practice and/or health system that has enough confidence in its outcomes to bet on it, and a health plan (or self-funded employer plan) who are willing to take not just the financial risk but also the risk of how to communicate the approach to members.

The question is -- is anyone bold enough to try?

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting


Humana Study on Workplace Wellness: It’s not just ROI

By Clive Riddle, September 19, 2014 

Humana has just published a 22 page report Measuring wellness: From data to insights which based on their study conducted by the Economist Intelligence Unit, examining “why companies implement workplace wellness, how data influences these programs and identifies obstacles that inhibit program participation.” The study surveyed 225 U.S.-based executives and 630 full-time employees from organizations with workplace wellness programs. 

Beth Bierbower, President of Humana’s Employer Group Segment, tells us “It’s interesting to validate that employers now view ROI as an important, but not exclusive or even primary measure of a wellness program’s success. Employers are now seeing that employee health is important beyond health care costs, it has profound impacts on productivity, retention, workplace engagement and morale.” The report states that instead of asking about ROI, “perhaps the question should be, ‘do we improve health at a reasonable price’ as opposed to ‘do we save money by doing so.’” 

Here are some key findings highlighted from the study:

  • Nearly 70 percent of executives consider their organization’s wellness program to be cost effective, even though not all of the outcomes are measurable.
  • While 86 percent of executives say improving employee health as an indirect driver of productivity, morale and engagement is their top reason for implementing a wellness program, cost factors are still important, including reducing employee health care costs (66 percent) and controlling medical claims (48 percent).
  • About 30 percent of employees rate subsidized gym memberships, onsite health and wellness facilities, and budgeted wellness activity time during business hours, as the three most important services that would motivate participation.          
  • 64 percent of employees have used fitness devices to monitor health and capture data, but only 19 percent use them regularly.         
  • Two-thirds of executives feel data collection and interpretation is the biggest challenge confronting effective workplace wellness.         
  • 53% of survey respondents say their organization collects health-related employee data as part of its wellness program
  • The biggest disconnects between executives and employees regarding their perceptions of obstacles to employee participation in wellness programs, were in regards to the statements: “Employees don’t perceive health and wellness as a high priority” (30% of executives agreed vs. 2% of employees); “Employees are concerned that personal information will not remain confidential (43% of executives agreed vs. 27% of employees); and “Employees distrust employer motives” (24% of executives agreed vs. 11% of employees.)     
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