Value in Health Care Accounting for Cost, Quality, Safety, Outcomes, and Innovation: Workshop Summary (2010) / Chapter Skim
Currently Skimming:
5 Approaches to Improving Value - Provider and Manufacturer Payments
5 Approaches to Improving Value - Provider and Manufacturer Payments
Pages 153-172
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From page 153... ...
. Experiments with payment design and coverage and reimbursement policies are currently going on in both public and private healthcare sectors, with varying results.
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From page 154... ...
Pearson likens coverage and reimbursement tools to a blunt knife that lacks subtlety in effecting value improvements, but he also expands on coverage innovations in public and private arenas that could sharpen these tools. He specifically describes Washington State's Health Technology Assessment Program -- which considers efficacy, safety, and cost-effectiveness in making coverage decisions for all of the state's public programs -- and physician edits -- which limit the prescription of certain drugs to specific physicians or specialists in an effort to target medications to those patients most likely benefit from them -- before elaborating on the future of payment and reimbursement as a tool to improve value.
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From page 155... ...
The study involved five sites that have had electronic medical records since 2000 and utilized physician payment tiers based on relative value units of service. Studies of financial incentives for individual physicians have shown that, bundled with other care management tools, P4P can lead to improvement in quality of care for diabetic patients (Beaulieu and Horrigan, 2005)
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From page 156... ...
This includes exploration of costsavings distribution plans with doctors who deliver high-quality care, such as lowering rates of avoidable hospital admissions. The evolution of our healthcare infrastructure to a learning healthcare system -- one in which real-time feedback on quality creates value for providers and patients -- is not possible today.
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From page 157... ...
Right now the mindset and relevant laws are framed around paper medical records (or their digitized incarnation) and reflect the limitations of these records.
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From page 158... ...
How are "we" -- we meaning the pharmaceutical and biological industry and all payers -- going to ensure that innovative, meaningful medicines are discovered, developed, and delivered to the right patients, to ensure optimal patient outcomes, and ultimately to improve the healthcare system? A Word About Research and Development and Return on Investment Before we discuss ways to work collaboratively to improve the healthcare system, it is essential to talk about what really goes into innovation.
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From page 159... ...
Pfizer guaranteed $33 million of savings over two years. Instead of paying supplemental rebates to secure placement of its products on the Medicaid formulary -- money that does not always end up going toward health care -- Pfizer implemented a disease management program.
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From page 160... ...
Some of these concepts include tying discounts to metrics other than market share, such as medication adherence, lower copays for essential medicines, and attainment of treatment goals. We are finding that we will have to try some of these concepts by piloting them with payers who have integrated medical and pharmacy data and are comfortable with defining and assuming risk.
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From page 161... ...
This physician is frustrated because he is aware of the inherent conflict of competing reimbursement methods. The patient's behavior, however, is shaped by those financial incentives -- unaware that the benefit design may not support his or her health and welfare -- and all too often leads to negative health consequences.
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From page 162... ...
We are quickly approaching a stalemate where the current system will either drive or stop innovation. The risk, then, is not finding potentially lifesaving therapies or changes that could drastically improve patient outcomes.
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From page 163... ...
So, while I am excited about innovation and the potential that it can deliver, we also have a responsibility to be extremely vigilant in determining what is adopted and how it is utilized within the total context of the delivery system. It is clear from our experience that the existing care delivery infrastructure is suboptimal in this regard in several important ways: • The availability of a robust and clinically relevant basic science research agenda; • The ability of expert physicians and medical specialty societies to analyze and translate science into clinical guidance; • The ability to define specific population groups for which new knowledge and innovations are appropriate; • The dissemination of knowledge to the profession and its incorpo ration into appropriate clinical practice through mechanisms such as continuing medical education and information technology; and • The available support for appropriate patient decision making in the context of the patient-physician relationship.
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From page 164... ...
The culture of medicine requires expert physician leadership and peer-to-peer consultation in determining clinical guidance. For example, I am excited about the work we are doing with the American College of Cardiology to support the creation of appropriateness criteria, clinical guidance, performance assessment, and continuing education in the use of the rapidly growing and expensive single-photon emission computed tomography myocardial perfusion imaging (SPECT MPI)
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From page 165... ...
Historically -- and legally -- the dividing line between covered and noncovered interventions for private insurers is usually determined by whether interventions are deemed "medically necessary." Any further definition of this dividing line commonly includes requirements for interventions to fall within generally accepted standards of medical practice, to be clinically appropriate in terms of type and frequency, and to not be primarily for the convenience of the patient. Even the sum of these criteria provides a relatively weak tool for achieving improved value in the healthcare system.
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From page 166... ...
Reimbursement If coverage has proven to be a blunt knife, what are the chances that reimbursement policy can prove more effective? It is easy to assume that private payers could negotiate their own reimbursement rates, paying more for high-value services and less for low-value services.
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From page 167... ...
The basic premise that Medicare "reimburses" according to a formula based on physicians' time, the complexity of the service, and the cost of any material involved makes it clear that reimbursement is divorced from any consideration of the degree of clinical benefit produced by the intervention. Highlights of Policies from Public and Private Payers Public Payers Medicare Medicare is eagerly employing coverage with evidence development (CED)
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From page 168... ...
Yet the review suggested that if the cost for CTC was lowered to one-third of the cost of a colonoscopy, as is the case in parts of Wisconsin, where several private insurers cover CTC, CTC could be considered to be a highvalue service. In Washington State, since the reimbursement rates for CTC and colonoscopy were equivalent, the HCA decided not to cover CTC for colorectal cancer screening at that time.
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From page 169... ...
Alongside step edits are often found physician edits, which limit the prescription of certain drugs to specific types of medical specialists who, it is assumed, are more likely to have the clinical experience to judge when a more expensive, and sometimes more dangerous, drug is appropriate for an individual patient. Two publicly known examples of conditional coverage provide a sense of how these approaches can be used to improve value.
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From page 170... ...
All parties should work together to determine the role evidence will play in coverage, reimbursement, and physician payments. It will be helpful if CMS can provide clearer guidance to manufacturers and others about general guidelines for the evidence requirements needed for coverage and reimbursement determinations -- for example, details regarding the recommended length of and outcomes for clinical trials.
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From page 171... ...
2005. Reducing patient drug acquisition costs can lower diabetes health claims.
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