Health quality initiatives deserve better payment models

If patient-centered care is to get off the ground, health plans and CMS need to make it easier for healthcare leaders to break their addiction to growth.

Until then, healthcare organizations will find it hard to experiment with, or sustain innovative cost-saving practices, because payment models haven't caught up enough to cover the costs of enhanced patient-centered or coordinated care.

Historically, healthcare leaders have measured success in healthcare with numbers: Patient days. MRIs. Total knee replacements. The more, the better. That's understandable in a universe based on a fee-for-service model where volume is put on a pedestal.

However, now that CMS is elevating quality of care and wants healthcare organizations to cut costs, the numbers talk among innovators sounds different. Now it's in terms of cuts, whether in dollars saved or hospitalizations prevented.

For example, better care coordination for patients with late-stage chronic illness at Sutter VNA & Hospice in Fairfield, Conn., helped cut hospitalizations 68 percent for patients enrolled in the facility's advanced illness management program for 30 days. More than $2,100 was saved per enrollee per month, according to senior medical director, Dr. Brad Stuart who spoke at yesterday’s Health Affairs conference in Washington, D.C., on healthcare delivery innovations.

But payment hasn't caught up yet, meaning these innovators are hurting financially. For instance, new care coordination services--such as Sutter's care liaisons at hospitals and a transitions team to help patients access home-based services--are not reimbursed.

Dr. David Howse, president and CEO of Martin's Point Health Care, a not-for-profit organization made up of health plans and primary care centers in Portland, Maine, is worried about funding the patient-centered medical home approach, which is "really expensive."

Martin's Point, which invested in its own pilot program, plans to transition from 4.3 employees per primary-care physician to six per physician. "But the revenue streams are not there," he said.  He has not yet figured out how to pay for more staff.

In a world where payments are "production-based," keyed up to the number of visits, he called the payment system "almost untenable."

Here's what CMS and payers need to add to their to-do lists for 2011: Devise a way to financially motivate providers to innovate. Otherwise, don't assume that anyone will want to invest their own money for long on these pilot quality projects. Let's hope 2011 brings a new approach to growth in healthcare. - Sandra

P.S.: Are you looking for more ways to network and share your ideas with other healthcare professionals? If so, we invite you to join us at FierceHealthcare's new LinkedIn group, Healthcare Leader Idea Exchange. This group will give you a place to take part in lively discussions, learn from other members and share your passion and knowledge. Most importantly, you'll be able to connect with peers and leaders in the healthcare industry. See you there!