Alternate payment models must focus on provider compensation

White paper, blog post urges industry to drop fee-for-service model
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New alternative payment models to improve the quality of care delivered to patients while keeping costs in check must focus in part on the compensation for the providers who deliver healthcare.

That's according to an article on the Health Affairs blog penned by four high-flying healthcare policymakers, including former Centers for Medicare & Medicaid Services (CMS) Director Mark McLellan, M.D., and current CMS Chief Medical Officer Patrick Conway, M.D.

The authors penned the commentary to accompany a new white paper by the Health Care Payment Learning & Action Network. That document urges dropping the fee-for-service (FFS) payment model because it is "ill-suited for initiating investments and sustaining population health management innovations, such as information technology, clinical decision support tools, patient engagement and care coordination functions, and additional opportunities to increase access to care (e.g., payments for telehealth, home visits, and additional office hours). This is because FFS incentivizes providers to optimize volume."

The accountable care organization as a payment model has had a meteoric rise in recent years. Yet for the moment, the Medicare program has been trying to create a soft-landing for providers that still rely heavily on the FFS model. Many providers still receive FFS, but 30 percent of those payments will be routed through some form of alternative payment models this year, rising to 50 percent by 2018.

And while the white paper suggested more transitions to risk-based payment models, it acknowledged that not every organization was capable of making that change. 

The Health Affairs post noted that "changing the financial reward to providers is only one way to stimulate and sustain innovative approaches to the delivery of person-centered care," the article said. "In the future, it will be important to monitor progress in initiatives that empower patients to have a voice in model design, to seek care from high-value providers (via performance metrics, financial incentives, and other means), and to become active participants in shared decision-making."

At the same time, the white paper noted that the transition must still be dramatic: "It is critical that value based incentives be large enough to motivate providers to invest in and adopt new approaches to care delivery, and--over time--to outweigh profits that could be generated by increasing FFS billing."

To learn more:
- read the Health Affairs blog post
- check out the white paper

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