Providers and Insurers Jump on 'Value-Based' Pay Bandwagon

January 29, 2015

In another sign that the days of fee-for-service (FFS) medicine may be numbered, an alliance of major health systems, insurers, and other industry players announced its formation yesterday as well as its goal to put 75% of its business into "value-based payment arrangements" by 2020.

The group's ultimate goal is to improve patient outcomes while lowering costs.

The debut of the Health Care Transformation Task Force (HCTTF) comes 2 days after Sylvia Burwell, the secretary of the Department of Health and Human Services (HHS), unveiled a timetable for moving Medicare further from FFS to pay-for-performance. Burwell said Medicare would funnel 30% of reimbursement to physicians and hospitals through alternative payment models such as accountable care organizations (ACOs) and medical homes by 2016, and 50% by 2018.

HCTFF spokesperson Rebecca Porterfield told Medscape Medical News that the back-to-back timing of the two announcements is coincidental.

"We're not working in tandem, but we're moving in the same direction," said Porterfield, referring to HHS. HCTTF has been taking shape for the last 12 months, she added.

On the provider side, HCTTF includes Partners Healthcare, Trinity Health, Ascension Health, and Dignity Health. Of the nation's top 15 health systems, six belong to HCTTF, according to a news release by the group.

The four health insurers in HCTTF are Aetna, Blue Shield of California, Blue Cross Blue Shield of Massachusetts, and Health Care Service Corporation, which operates Blue Cross and Blue Shield plans in five states. These insurers are among the top 25 in the nation, according to HCTTF.

Other members include a coalition of health insurance purchasers called the Pacific Business Group on Health, the National Partnership for Women & Families, the Dartmouth Institute for Health Policy and Clinical Practice, and Optum, a division of insurance giant UnitedHealth Group with services ranging from pharmacy benefit management to insuree wellness programs. A former group executive vice president at Optum, Andy Slavitt, will become acting administrator of the Centers for Medicare and Medicaid Services (CMS) once Marilyn Tavenner steps down from that position at the end of February.

"The formation of this task force and its ambitious goal demonstrate that the private sector embraces a value-based approach to improving care and lowering costs," said HCTTF chairman Richard Gilfillan, MD, the chief executive officer of Trinity Health. "We are committed to rapid, measurable change both for ourselves and our country that will improve quality and make healthcare more accessible for all American families."

New Group Has DC Connections

Echoing principles laid out by HHS earlier this week, the HCTTF said it defines value-based payment arrangements "as those which successfully incentivize and hold providers accountable for the total cost, patient experience, and quality of care for a population of patients, either across an entire population over the course of a year or during a defined episode that spans multiple sites of care."

The alliance said it will initially focus on the following:

  • Improving commercial, Medicare, and Medicaid ACOs. HCTTF already has issued recommendations on ensuring the financial stability of these provider consortiums, improving how they measure quality of care, and effectively signing up enrollees.

  • Developing best practices for bundled payments for episodes of care, which are divvied up among various providers.

  • Improving care for high-cost patients, including those with multiple chronic illnesses and those at the end of life.

The HCTTF said it will share its recommendations with CMS and Congress as well as the private sector. To that end, it enjoys several insider connections to federal policy makers and lawmakers. One HCTTF member is Mark McClellan, MD, PhD, a former CMS administrator and commissioner of the US Food and Drug Administration under President George W. Bush. Dr McClellan is now a senior fellow at the Brookings Institution. And what HCTTF calls its "implementation partner" is Leavitt Partners, a healthcare consulting firm founded by Michael Leavitt, a former HHS secretary under Bush.

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