Stronger incentives and downward pressure on prices likely needed to improve the quality and affordability of care
BERKELEY, Calif. – December 4, 2019 – Today Catalyst for Payment Reform (CPR) released new and updated National Scorecards on Payment Reform finding 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. This has been relatively consistent since 2012 when it was 5.7%.
“CPR was founded to catalyze payment reform that will transform health care,” said Robert S. Galvin, MD, CEO, Equity Healthcare and Chair, CPR Board. “The results of these analyses 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.”
The Scorecards examined data on the implementation of health care payment reform in the commercial sector in the United States for 2012, 2013, 2016 and 2017. Over that time, there was an early investment in pay for performance (12.8% of payments in 2014), but by 2016 shared savings payment arrangements (23.7% of payments in 2016, then 29.7% in 2017) were the most common type of payment reform. Bundled payment remained flat and in the low single digits throughout this period, representing 1.6% of dollars paid to providers in 2012 to 2% in 2017.
Between 2012 and 2017, the rate of growth in payment reform was greatest at the beginning and has slowed in the most recent years of measurement. From 2012 to 2013 the amount of dollars flowing through value-oriented payment methods more than doubled from 10.9% to 27.1%. But from 2016 to 2017, the most recent year over year measurement available, the percent of dollars flowing through value-oriented payments only grew from 48.5% to 53%.
While it is challenging to measure how many Americans with commercial insurance have been touched by payment reform, CPR tracked the percent that generally receive their care from a provider with a payment reform contract. This steadily increased from 2% in 2012 to 24% in 2016 (the most recent year for which data are available). This figure is based on the patient population commercial health plans attribute to a provider to calculate health care costs/savings or quality of care scores. “Attributed” patients can include those who choose to enroll in, or do not opt out of, an accountable care organization, patient centered medical home, or other delivery models in which patients are attributed to a provider.
To assess the impact of payment reform on the quality and affordability of care, with the help of an expert, multi-stakeholder advisory committee, CPR selected a set of metrics to examine how well the health care system is performing on these dimensions. There are too many variables in the health care system to determine payment reform’s sole impact. For example, the incentives in health insurance benefit design may influence patient outcomes (e.g., if patients with diabetes have high cost sharing for lab tests, they may not test their HbA1c regularly, which could negatively impact their blood sugar control). However, CPR gathered these metrics to help inform whether sweeping changes in health care provider payment correlate with better health system performance. CPR found performance improving on some of the metrics, worsening on others, and remaining unchanged in still others.
Regarding the affordability of care:
“Given the growing recognition that high prices are the major reason health care costs continue to rise while the use of services remains flat, CPR’s view now is that it’s not real payment reform if it doesn’t address prices,” said Suzanne Delbanco, PhD, executive director of CPR.
Regarding the quality of care:
About the Methodology and Data Sources
This study was funded by the Robert Wood Johnson Foundation. CPR obtained the data for the commercial scorecards through an online survey of health plans fielded by the National Alliance of Healthcare Purchaser Coalitions called eValue8. eValue8 provided data from 2012, 2013, 2016 and 2017. As a percent of total lives in the U.S. enrolled in commercial health insurance (estimated by the Kaiser Family Foundation based on the Census Bureau’s American Community Survey, 2008-2017) the representativeness of the Scorecards varied by year but in none of the four years for which CPR has created new or updated Scorecards is it less than 50%.
Details on data sources for the quality and affordability metrics, accompanying Scorecard methodology reports and additional information are available for download.
Tracking Progress on Payment Reform Webinar
Today (Wednesday, December 4) from 1:00-2:00 pm Eastern, CPR and the National Alliance of Healthcare Purchaser Coalitions are hosting a complimentary webinar in which CPR will release the two new National Scorecards on Payment Reform and the updated 2013 & 2014 National Scorecards with CPR’s Scorecard 2.0 methodology.
About Catalyst for Payment Reform
Catalyst for Payment Reform is an independent, non-profit organization working to catalyze employers, public purchasers and others to implement strategies that produce higher-value health care and improve the functioning of the health care marketplace. For a list of CPR member organizations, click here. For more information visit: www.catalyze.org and follow CPR on LinkedIn and Twitter.
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Media Contact: Cary Conway