Public-private collaboration is crucial for healthcare payment reform

Aligning the work and interests of state agencies with private payers and employer groups is critical for shaping the future healthcare financial landscape, according to a Health Affairs blog post.

In the blog post, Suzanne Delbanco, executive director of the Catalyst for Payment Reform, observed that "alignment allows both state and commercial payers to send clear messages to providers about the expectations they have in moving to a more value-based healthcare payment and delivery system. This gives providers direction when it comes to deciding what to target and invest in to improve the care they offer."

There is also direct collaboration between payers and providers. A large coalition of employer groups and healthcare systems have recently pledged to move 75 percent of their business to value-based payment arrangements by 2020, according to Healthcare Dive.

Delbanco provided a variety of examples of how state agencies work with the private sector to improve outcomes. Many of these initiatives take place in Southern states.

For example, Delbanco highlighted the Birth Outcomes Initiative spearheaded by the South Carolina Department of Health and Human Services. It disincentivizes providers from performing less than full-term elective deliveries by not paying for them. As a result, the rates of such births have dropped by about half, according to Delbanco. In Arkansas, the state's Medicaid program is moving patients into medical homes through a partnership with Arkansas Blue Cross and Blue Shield and QualChoice of Arkansas. That initiative has seen a stabilization in the cost of joint replacement procedures and a nearly 20 percent decrease in antibiotic prescriptions for upper respiratory infections.

In Tennessee, the Health Care Innovation Initiative will likely introduce 75 episode-based payment models by decade's end.

There have been successes between private sector endeavors and federal agencies as well. San Antonio's Baptist Health recently announced more than $1 million in cost savings during the first year of a bundled payment initiative with the Centers for Medicare & Medicaid Services (CMS), although there is still not enough data to determine if such initiatives will enjoy wide success.

But Delbanco cautioned, "we likely won't have the success we want without both the public and private sectors participating, coordinating and, at least, not working at cross purposes."

To learn more:
- read the Health Affairs blog post
- check out the Healthcare Dive article