“We can’t afford to wait on the federal government for health care reform.”

That’s according to Harold D. Miller, who was the featured speaker on April 20 at AF4Q – South Central PA’s Physician Clinician Learning Networkdinner meeting.Mr. Miller is the President and CEO of the Network for Regional Healthcare Improvement and Executive Director of the Center for Healthcare Quality and Payment Reform to the area.With nearly 100 health care professionals from South Central PA in attendance, Millerexplained his thoughts on how to make health reform work.

According to Miller, communities can’t wait on the federal government for health care reform. Instead, it’s up to the states and regional collaboratives, like AF4Q – South Central PA, to take the lead.

Miller began the presentation calling for a focus on producing Accountable Care Organizations (ACO).According to Miller, “Accountable Care Organizations’ goals should be to reduce or control the growth of health care costs while improving the quality care patients receive.” Keeping patients well, helping patients (with preventable conditions) from going to the hospital, and finding ways to reduce the complications, infections and readmissions if patients end up in the hospital are all the things ACOs should be addressing. “But this change isn’t happening and can’t happen in D.C. – it has to happen locally, where health care is delivered,” Miller said.

So who’s at the core of Accountable Care? According to Miller, it’s not the health plans, but rather the primary care practices. He explained that accountability requires new and improvedtechniques and relationships, and the primary care practices need the skillsand tools to make this change. These include timely information about patients and the services patients are getting; resources for patient education; the ability to target the greatest need; relationshipswith specialists and other providers; teamwork among the practice; data analysis to measure performance; and the capability to reach out to the patient, instead of waiting for the patient to come to the provider.

Miller explained that efforts like the Patient-Centered Medical Homesare helpful, but are not enough.

He identified a large barrier for primary care practices that needs to be addressed to head in the ACO direction. “You can’t manage what you can’t measure,” he stated.The barrier is the lack of data. Most practices don’t know how often their patients are hospitalized, or the high rates of complications. Having the ability to analyze this information will determine what’s achievable for the practice and community at large. Analyzing the data will help physicians find opportunities for costs savings and quality improvement.

What is needed to support Accountable Care Organizations?
“The payment systems need to change,” he indicated. One option is an Episode-Based Payment instead of fee-for-service payments. An “Episode Payment” is a single price payment that accounts for all of the services needed by a patient for an entire episode of care – from all pre-admitted care, inpatient care to all complications after care. There are no other payments for the patient. Episodes are different, so it must be defined by looking at the length of time that’s covered and the range of providers/services included.

But does it really work? Yes, other communities are doing it and the results are positive. This method reduces the incentive to overuse unnecessary services within the episode, and gives providers the flexibility to determine which services should be delivered – rather than being controlled by fee codes and amounts.

Another option is the “Comprehensive Care Payment.” This payment option is based on the patients’ conditions, and rewards physicians for keeping patients healthy and out of the hospital. It also helps avoid unnecessary services within an episode of care. A single price is paid for all of the healthcare services needed by a specific group for a fixed period of time. The option is viewed as the most flexible system because it allows providers to decide what services should be delivered and the resources to execute them. Miller noted that there are concerns for this option because it’s structured much differently than the payment plan now; however, he added, it can and is working for other states without causing financial difficulties.

Miller encourages communities to measure quality and include incentives for providers to maintain or improve quality and reduce costs. Developing quality measures with the participation of physicians and hospitals like AF4Q – South Central PA’s Community Checkup is doing, is a great first step.

Why pay more to get good quality-care?
When you purchase a high-end product for your home, you probably purchase a warranty to cover any unexpected damages. Applying this to health care, Miller’s suggesting a limited warranty gives financial incentive to improve quality.

His example: assume the cost of a procedure is $10,000; an added cost of infection is $20,000; and the rate of infections is 5%. Therefore, the average total cost is $11,000. The price charged is $11,000, so there is no change in net revenue. However, if the rate of infection decreases to 4%, and the cost for procedures ($10,000) remains the same, the average total cost is $10,800 – creating a $200 net revenue. As this cycle continues, the quality improves, costs are lower, and providers are more profitable.

Is there one solution?
Miller stressed there’s no one-size fits all solution for payment reform. It’s what works for each individual community. He reminded the group that outcomes and measures need to be determined by the community together – not by individual payers.

But no matter what, the four things that must be done regardless of the path chosen are: collect the data, provide educational materials for patients to get them engaged, offer technical assistance for providers, and get the stakeholders around one table.

He also pointed out that thisis a transition. It can’t happen all at once –  the process takes time, patience and a community that is willing to work together to determine the guidelines.Support needs to be provided to help practices get started.

Based on Miller’s recommendation, Aligning Forces for Quality – South Central PA is a regional health improvement collaborative that’s uniquely poised to be the leading force in bringing this type of health care reform to Adams and York counties.

For more information on Harold D. Miller or his views on health care reform, visit http://www.chqpr.org/.

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