What is really needed in healthcare reform? Revised federal payment systems, said insurance executives who recently testified before the Senate Finance Committee. Fortunately for us under these clear skies, Peter Rutherford, MD and CEO of Wenatchee Valley Medical Center, said the merger with Central Washington Hospital permits local opportunities to improve healthcare industry practices locally. (See the article WVMC CEO Says Changes Coming in NCW Healthcare).
Rutherford asked, “Why does the healthcare industry have to change?” His answer is because costs are higher than necessary and healthcare could be better than it is. He defined healthcare goals as improved health, improved quality of life and reduced suffering. “High quality care is less expensive in the long run than the short term.”
Long term quality healthcare sounds like a bargain to me.
Five private insurance company executives testified it is a bargain. They said innovative payment/incentive systems reward better healthcare, according to the American Association of Medical Colleges blog last June 15.
Dana Safran, Senior VP of Blue Cross Blue Shield of Massachusetts, testified about its Alternative Quality Contract. The insurer contracts with groups of providers for five-year time periods based on budgets and measures for quality of care. The providers are rewarded for improving quality of care measures and a share of any cost savings.
She said, “For our physician fee system we have had zero percent payment increases. The only way to earn additional revenue is through [systemic] performance on a defined set of quality and outcome measures.”
If that means I’d get one annual statement from Medicare instead of pages of payments for each procedure involved, I’m all for it.
Rutherford said, “In fee-for-service payments there is no risk for the healthcare providers.” He compares that faulty incentive system to paying pickers for any apple they toss in the fruit bin regardless of the quality. More apples, more pay; more procedures, more fees.
CareMore, a California company founded in 1993 by gastroenterologist Sheldon Zinberg, profited from an overall fee to care for each Medicare patient according to The Atlantic Monthly in November, 2011. Healthcare improved based on measures such as lower average rates of hospitalization, hospital stays and amputations for diabetics. Zinberg told his partners, “If you put people before profit, everyone profits.”
WellPoint, a company insuring 70 million enrollees in Blue Cross Blue Shield plans, bought CareMore, which by then had 50,000 patients in 26 centers. Angela Brady, WellPoint’s CEO said, “Many people are skeptical that it is possible to significantly improve quality and reduce costs at the same time. The CareMore experience shows that if you change the underlying processes, you can, in fact, achieve both objectives, and you can do so consistently.”
How did CareMore do it? It delivered preventative care in the community environment. Contracted drivers picked up patients who missed appointments, exercise classes and toe-nail trimming. Caregivers visited homes to identify health hazards and give patients talking pill boxes. CareMore provided in-home wireless weight scales and blood pressure cuffs to patients with congestive heart failure, cutting readmissions 56 percent.
Insurance executives appealed to Congress for national reform to provide incentives for better care at lower cost. Rutherford said, “The easiest approach would be if we have a national strategy. This is not occurring. I think we can do this reasonably, … regionally and locally.”
As described in the accompanying article, the Confluence Center is improving a regional health care plan by coordinating community care with hospital care and follow-up care, sharing a common data technology and paying incentives for improved healthcare and rewards for cost savings.
Rutherford insisted, “We can’t do this with the healthcare industry alone. We need to involve the patients, employers and us as healthcare providers at the table.”