Catalyst for Payment Reform

Peering into 2021: Our Priorities to Support Employers and Other Purchasers

Peering into 2021: Our Priorities to Support Employers and Other Purchasers

Suzanne Delbanco, CPR’s Executive Director, wrote this blog, which was originally published in November 2020.Suzanne Delbanco, CPR Executive Director

2020 didn’t turn out the way anyone planned.  While the COVID-19 pandemic leads the list of seismic shifts, the economic downturn it spurred follows close behind.  I know I’m not the only one who counted the days until 2020 was behind us, looking forward to a fresh start in 2021.  But what should that fresh start entail for employers and other health care purchasers who continue the hard slog of seeking good value for their health care dollar?

Catalyst for Payment Reform will focus on three strategies in 2021.

We will help purchasers stimulate a more competitive and cost-conscious health care system.

First, we believe it is critical that purchasers do what is within their power to make the health care system more competitive and cost-conscious. There are myriad ways to do this, but most important is for purchasers to implement strategies in their buying of health care services that give preference to higher-quality, lower-cost health care providers.  Given that most health care benefits programs treat health care providers as uniform commodities, spurring local providers to compete on quality and cost is as disruptive as it is innovative. But this is the most precise way for employers to shave off the unnecessarily high costs of over-priced providers and low-value services. Examples include narrow, high-performance provider networks, centers of excellence programs, and insurance options built around an ACO product created through a direct contract with a health system.

From another angle, purchasers can also work to stymie the efforts of dominant health care providers to squash competition from other providers.  For instance, purchasers can push their contracted health plans to retire contract clauses that give preferential treatment to providers who do not meet the definition of high-value.  Furthermore, there’s a whole new crop of alternative third-party administrators who contract with high-quality, more affordable providers.  As a result, purchasers can offer more affordable insurance options in place of or alongside more traditional health plan products.

We will reassess payment reform and explore new payment models.

A second area on which CPR will focus in 2021 – no surprise to those familiar with us – will be a reassessment of payment reform. COVID-19 has created a natural pause in the payment reform movement.  Providers have asked for reduced quality reporting burdens and a pathway out of shared risk obligations as they focus on caring for patients with COVID-19 and experience unprecedented drops in the utilization of elective health care services.

We’ve come a long way since the launch of CPR 10 years ago.  Alternatives to traditional fee-for-service payment abound.  While many models have had lackluster results, the health care industry has learned a lot, and this could be the right moment to create new approaches that combine the best features of different payment models.  While the incumbent health insurance companies may be game to explore hybrid payment models, such as combining partial capitation with fee-for-service for primary care providers, there will also be opportunities for purchasers to work directly with health care providers eager for experimentation and partnership.

We will educate purchasers and policy makers on promising policy approaches.

The third area worth continued and new thought is how the policy arena can help employers and other health care purchasers succeed in these areas. How can states and the federal government design policies that help to control high and rising health care prices, or come up with a sustainable and right-sized approach to paying for telehealth services?  What about antitrust scrutiny and enforcement as providers continue to consolidate, a trend potentially accelerated by the revenue freefall that some physician practices and hospitals experienced when COVID-19 reduced the utilization of health care services.  CPR will seek out promising policy approaches about which to educate both purchasers and policy makers.

Given the pace of breaking news these days, 2021 is likely to bring its own surprises.  No matter what’s in store, CPR will pursue these efforts on behalf of employers, other health care purchasers and consumers.  The need for high-quality, affordable care has never been more acute.

Photo by Kelly Sikkema on Unsplash.

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