November 14, 2012

There is broad consensus regarding the need to overhaul the fee-for-service payment systems commonly used today. Fee-for-service arrangements encourage a volume-driven health care system rather than a value-driven system. Moreover, such payments can penalize providers for keeping people healthy, for managing chronic diseases, and for avoiding unnecessary and expensive care. Payment reform can shift financial incentives to achieve better results and can foster a culture change that aligns the interests of payers and providers to succeed together.

NYHealth considers payment reform to be integrally linked to efforts to transform the delivery system and control costs. At the conference, speakers discussed reforms from two trailblazing states, Massachusetts and Vermont, as well as innovative payment initiatives currently underway in New York State. Consumers, providers, insurers, policymakers, and researchers attended the event.





Ann Huston, Chief Strategy Officer of the Cleveland Clinic, delivered the keynote address and highlighted the ways in which the Cleveland Clinic is transitioning away from a volume-based and toward a value-based platform through managing populations and avoiding unnecessary hospitalizations. Ms. Huston spoke about the Clinic’s bundled payment efforts along with several unique initiatives it has undertaken, including combining population health contracts with medical tourism. As a result, the Clinic is achieving better health outcomes and lowering costs.

A first panel detailed payment reform lessons from other states. Robert Mechanic, Senior Fellow at the Heller School of Social Policy and Management at Brandeis University and Executive Director of the Health Industry Forum, spoke about payment reform and cost control in the pioneering state of Massachusetts. He highlighted the Health Policy Commission’s work on addressing spending and delivery reform oversight, as well as the details of MassHealth’s model for primary care payment reform. Anya Rader Wallack, Chair of the Green Mountain Care Board, spoke about the unique circumstances and health reform initiatives taking place in Vermont. Vermont has a small system of hospitals, a non-competitive market, and a relatively low uninsured population. As a result, it is moving in the direction of a single-payer system and health care coverage for all Vermonters.

A second panel discussed payment reform initiatives currently underway in New York State. Bruce Nash, M.D., Senior Vice President and Chief Medical Officer of the Capital District Physician Health Plan (CDPHP), spoke about CDPHP’s initiative, Enhanced Primary Care, which is a payment model that significantly moves away from fee-for-service and has proven successful in its pilot results. Howard Gold, Senior Vice President of Managed Care and Business Development at North Shore–LIJ Health System, discussed his health system’s embrace of financial risk in a variety of initiatives, offering a business case for payment reform. Thomas Foels, M.D., Executive Vice President and Chief Medical Officer of Independent Health, discussed how what initially began as a pay-for-performance effort at his organization has evolved into a new reimbursement model. Independent Health’s implementation of a patient-centered-medical-home model, Primary Connections, strives to reward the right activities and results by focusing on quality and efficiency.

This conference offered a variety of ways to address the ever-pressing need of payment reform. While different strategies in different regions of the country were represented, there was consensus among the speakers that payment reform must continue to be an overall priority for the health care industry in order to achieve meaningful change.

Download the conference speakers’ PowerPoint presentations below:

Ann Huston, Chief Strategy Officer, Cleveland Clinic

Robert Mechanic, Senior Fellow, Heller School for Social Policy and Management, Brandeis University

Anya Rader Wallack, Chair, Green Mountain Care Board

Bruce Nash, M.D., Senior Vice President & Chief Medical Officer, Capital District Physicians’ Health Plan

Howard Gold, Senior Vice President of Managed Care and Business Development, North Shore – LIJ Health System

Thomas Foels, M.D., Executive Vice President and Chief Medical Officer, Independent Health

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