Way #7: Provider Payment Reforms and Care Coordination

The Affordable Care Act (ACA) has given a big boost to efforts to fundamentally change the health care business model to reward quality and efficiency. The ACA has accelerated and expanded efforts to move away from “fee-for-service” medicine, where providers are paid directly for each visit and quantity of service with little or no regard to outcomes.

Many of these reforms are starting in Medicare, where the government has the most power to innovate and incentivize reforms, to pave the way for more general take-up of the delivery reforms. Wisconsin was uniquely situated for this shift, and is moving forward at a rapid rate. Some of the ACA’s 47 reforms of how doctors deliver care and how insurers pay for it include:

• Accountable Care Organizations (ACO): This payment model in Medicare provides payments based on a population, with shared savings between the health care organization and Medicare. Specific accountability measures are in place for coordination and quality of care. Allina Health and Bellin Thedacare in Wisconsin are both participating in the Pioneer ACO program. Southeast Wisconisn’s ProHealth Care and Elmbrook Health Care are participating in the Medicare shared-savings program.

• Consumer Operated and Oriented Plans (CO-OPs): The ACA is offering loans to nonprofits that establish nonprofit insurers run by consumers to be consumer-friendly, affordable options for individuals and small businesses. Common Ground HealthCare Cooperative will be taking advantage of this opportunity in southeastern Wisconsin.

• Reducing Hospital Admissions and Hospital Acquired Infections: All but two of Wisconsin’s hospitals have signed up to participate in this ACA-funded initiative.

• Bundled Payments: Under this approach, instead of the more costly “fee-for-service” per provider model, the entire team is compensated together for episodes of care – rewarding quality, efficiency and coordination. It is scheduled to move full-steam ahead in 2013. Fortunately, this is an area where the positive momentum is expected to continue regardless of how the Supreme Court rules on the ACA. As reported by Kaiser Health News, “soaring costs, tight budgets, better technology and industry consolidation ensure health care won’t go back to 2009 no matter what the court or Congress do, say analysts and industry officials.”

Eric Borgerding, executive vice president of the Wisconsin Hospital Association, concurred at a legislative briefing in May: “This is reform that began in Wisconsin prior to the Accountable Care Act, and that will continue regardless of how the Supreme Court rules next month.”

This transition to paying for high-quality care based on value, and not quantity, is an important cultural shift in medicine. The ACA is an important impetus and support for these changes; but we are encouraged by the commitment from the industry to continue in this direction no matter what the Supreme Court decides.

Sara Eskrich