Letter to Health Care Payers: Getting on the Same Page

Feb 16, 2016 | Christopher F. Koller, President

Dear Health Care Payers:

We gathered 25 of you—insurance company staff, Medicaid officials, and Medicare staff—earlier this month to compare notes on your work with Medicare’s Comprehensive Primary Care Initiative, a multi-payer initiative that fosters collaboration between public and private health care payers in seven markets to strengthen primary care.

It is apparent that this sort of collaboration is new, not easy, and utterly essential to the work of improving our health care system.

First, thank you. I realize how countercultural it can be to collaborate in local markets when payers spend much of their working moments suspicious of one another. Perhaps you are certain that others design benefits to attract healthier populations. You could resent that public payers plead poverty and pay less for the same services. Maybe you are frustrated that others point to national policies and bureaucracies when they do not change their performance standards. You might be resigned to others sending subordinates to group meetings to ensure that commitments are not firm.

In that environment, building trust with one another can be a challenge. But the successful multi-payer projects have persevered, driven by a humbling realization that to change the toxic effects of the fee-for-service payment system even the largest payers in a market need their colleagues.

Working on Payment Alignment

The economic fundamentals of health care are rock hard. Not one of you controls enough market share of a provider’s practice to change its behavior with just your own payment programs. The economic incentives must be aligned for the physician. That means payers must be aligned with those incentives.

This alignment is hard work. Often, you have found you can’t work on payment first. It is too large a leap, and the lawyers wave big antitrust flags. Instead, alignment starts by trying to agree on common measures of provider performance. While gathering stakeholders to concur on the priorities for population health improvement can be galvanizing, the work of coordinating how you measure and report back to providers is detailed and time consuming. Documenting real improvement takes even longer, and is not a task that employers and taxpayers think they are giving you their money to do.

Holding hands with one another on measurement and reporting makes jumping into payment alignment only marginally easier. If fee-for-service payment encourages repeated visits but not proactive care planning, what payment method is better? Care coordination payments? Performance payments? Risk sharing? More fundamentally, how do competitors talk about this with each other? What constitutes alignment? What is an adequate payment? Who makes the final call on whether payers are sufficiently aligned? And at the core—how do you build trust (that word again)—and limit free-loading?

This may be the crucial issue for multi-payer projects, and different projects have resolved it in different ways. In calmer moments, most of you admit that our provider payment system is nonsensical—Medicaid and Medicare payment methods and amounts are known and transparent, while the other 50% of the market’s (the private payers’) methods and amounts are a closely held secret. More transparency seems inevitable.

With measurement and payment methods reasonably aligned, your controlled impatience at the project table has been very useful. Transforming primary care is a long-term effort. As with payment alignment, we know what we don’t want: poorly coordinated care, duplicated treatments, non-evidence-based treatments, poor urgent access, passive patients, and physician-centered practice. But learning how to get what we do want is not easy.

Given this reality, advocates keep urging patience. “We are learning,” they say. “This takes time.” You consistently respond with “Yes, but…” You point to the 20% estimated waste in the system. You show up with utilization and cost measures, asking projects when you can expect to see changes in emergency room use or inpatient readmission rates. You threaten to pick up your marbles and go home.

Being Accountable

This accountability you create for the work is uncomfortable but healthy. The projects are on a journey towards transformed, effective primary care. The direction is not in dispute—lower population costs and better population health in your communities—but the map is unclear. You do, however, have the compass—your claims data tells the project if it is headed in the right direction. You are also not hesitant to remind the projects that you also have the fuel: premiums and taxpayer dollars are what keep the projects going.

So you create a constructive tension and help the projects focus on results. In return, you learn how to collaborate and contribute to longer-term systemic goals. It appears your persistence is being rewarded. At our February meeting, many of you presented your own data indicating that the projects were headed in the right direction—quality measures were improving and costs trends were superior compared to practices not enrolled in multi-payer settings. As a result, private payers and Medicaid agencies reported being committed to the work and anxious to see Medicare continue its role.

All is not roses, however. National payers—Medicare and especially certain commercial payers—are challenged to participate in local initiatives. They fear over-customization, and do not always give sufficient authority to their local representatives. National self-insured employers have been slow to understand this healthy tension between short-term results and long-term transformation, and some continue to withhold their support of the necessary upfront investment, in effect, free-loading off the work of others. Finally, the pace is slow, and the bigger picture is unclear. While transformed primary care is “the backbone” of a transformed delivery system, as CMS Chief Medical Officer Patrick Conway told you at the meeting, the skeleton and musculature are not well understood. Payers, providers, and policymakers alike are trying to figure out what payment reforms help the rest of the body develop.

This side of a President Sanders and a willing Congress, however, the US has a multi-payer health care financing system. In getting on the same page, you are doing essential, ground-breaking work. Measurement and payment alignment can only happen locally—Vermont’s alignment will look different from Arkansas’. But when you work together—agreeing on how to measure, pay for, and transform primary care—you build the local trust necessary to take on the other issues that keep members of our communities from living the long and productive lives we want for all of us.