Catalyst for Payment Reform

2020: CPR’s Agenda to Reform the Health Care Marketplace for Employers-Purchasers and their Plan Members

2020: CPR’s Agenda to Reform the Health Care Marketplace for Employers-Purchasers and their Plan Members

This is going to be quite a year.  At CPR we’ve fastened our seatbelts for full speed.  The core of what we do remains the same: we are pushing for effective payment reform, effective purchasers and a more functional health care marketplace.  None of these are easy.  With input from our employer-purchaser members, we have a shared purchaser agenda that sets our route.

Effective payment reform

CPR’s new and updated National Scorecards on Payment Reform found that the percent of payments to doctors and hospitals flowing through value-oriented or “alternative payment methods” in the commercial sector grew from 10.9% in 2012 (when CPR first started tracking) to 53% in 2017. Additionally, CPR found that an overwhelming majority of value-oriented payment – 90% as of 2017 – is built on a fee-for-service foundation and just 6% of total dollars as of 2017 flowed through payment methods that pose downside financial risk to providers.

Over the same period, however, we did not see any major change in the performance of the health care system – at least not on the set of key indicator metrics we chose with the help of a national advisory committee of experts.  For example, readmissions remained flat between 2012 and 2017 – 8.2% of commercially insured patients admitted to the hospital are readmitted within 30 days.  Furthermore, in 2013, 7.45% of patients with commercial health insurance were unable to receive care due to cost concerns, and by 2017 it was 9.68%.

“CPR was founded to catalyze payment reform that will transform health care. The(se) results are disappointing and a wake-up call that we are moving too slowly and essentially missing the mark. Not all payment reforms are equally effective and it’s time to put our energy toward payment methods that don’t rely on fee for service but, instead, empower health care providers to manage our populations and assume financial risk for their performance.”

CPR’s founder Bob Galvin reacting to the National Scorecard on Payment Reform findings

How will CPR work to make payment reform more effective in 2020? CPR will be pushing the move to downside risk with health plans in our user groups.  And given the reliance of most payment reforms on fee for service, CPR will also be creating pressure for health plans to reexamine and adjust their physician fee schedules (upward for under-provided services and downward for services that are over used) to create incentives for a better mix of services for plan members.

To advance the move toward downside risk, CPR will be releasing specifications for the evaluation of vendors that support purchasers in bringing bundled payments to their populations outside of the traditional health plan relationship, as well as using those specs to evaluate key vendors for CPR members.  In addition, CPR will be releasing several new tools to help employers and other health care purchasers evaluate the effectiveness of payment reform programs.

Effective health care purchasers

CPR works to educate and activate health care purchasers on the use of payment methods, benefit designs, and other tactics that support higher value health care.  Unfortunately, all the payment reform in the world won’t guarantee that health care prices are affordable.  Beyond the usual support that CPR will provide to health care purchasers this year for sourcing, contracting with, and managing health plans, CPR has much in store to help purchasers procure health care at better prices and better quality. 

A major initiative is looking into future models for how purchasers can amass volume at the local market level for greater negotiating strength on price, whether through a purchaser-created approach or through alternative third-party administrators or other entrepreneurial vendors.  We will also be conducting case studies on models for direct contracting and encouraging more purchasers to take our newly released online course on the subject to determine if contracting directly or semi-directly with providers is a good strategy for them.

CPR will also be stepping up the number and variety of small working group collaboratives we host for purchasers on critical topics such as increasing utilization of high-value health care programs (e.g. telehealth) and alternative primary care models (e.g. direct primary care). 

A more transparent and innovative – i.e. functional – marketplace

CPR believes that greater visibility and competition in the health care marketplace will make it more responsive to the needs of purchasers and consumers. CPR will continue to stimulate competition by conducting evaluations of marketplace offerings in several areas this year, such as bundled payment programs offered by independent vendors.  CPR is also launching user groups with the major pharmacy benefit managers and continuing to push use of the Standard Plan ACO Report, which allows for direct comparisons of health plan ACOs.

When it comes to health care marketplace dynamics, they are inherently local — each market has unique characteristics that present challenges and opportunities for purchasers who want to find better value health care options.  Following last year’s assessment of the greater Denver health care marketplace, CPR will turn its attention to Tampa and Orlando with a multi-step inquiry to determine potential health care delivery, payment and benefit design strategies that employers and other health care purchasers could implement there.

Last but not least, as employers and other health care purchasers look for alternative ways to procure high value health care services or supplement their health plans’ offerings through additional navigation support services, second medical opinions, data warehousing or other programs, sharing and integrating data across parties can be fraught with difficulties.  CPR will be researching the barriers and identifying the right pressure points for CPR members to use in opening the paths for the data sharing they need – particularly from their health plans.

Concluding thoughts

CPR’s shared purchaser agenda for 2020 is ambitious, as usual.  We are fully staffed and have a membership of the best and brightest health care purchasers – we are ready to go!  Together, we can accomplish our goals for 2020 and work toward a health care system that better meets the needs of those who use and pay for health care.

Leave a Reply

Contact Us


View Blog Archives