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Wednesday, 12 September 2012 16:00

Expert: Health care reform must continue regardless of Affordable Care Act’s fate

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Spectrum Health President and CEO Richard Breon Spectrum Health President and CEO Richard Breon

GRAND RAPIDS — Regardless of what happens to the Affordable Care Act after the November presidential election, Tom Pellathy knows the health care system must reform how providers are paid and how care is delivered.

Speaking today at the West Michigan Policy Forum, Pellathy stressed that the changes already underway must continue, no matter whether the federal law remains intact or gets repealed or altered in some way.

“At the end of the day, if we don’t address the cost issue, it becomes very hard to see your way to a sustainable health care system,” Pellathy said. “It’s very hard to get to an environment where affordability is very real.”

A partner with the Pittsburgh-based management consulting firm McKinsey & Co., Pellathy says managing high-cost chronic health conditions and paying hospitals and doctors based on performance is “fundamentally important” to lowering high medical cost trends in America.

In Michigan, both Blue Cross Blue Shield of Michigan and Priority Health have been growing the number of doctors involved in patient-centered medical home models. Both say they are generating promising results.

Blue Cross Blue Shield in August reported that adult patients whose doctors belonged to a designated medical-home practice had a 23.8-percent lower hospitalization rate than non-medical home practices. Those same practices also had an 8.3-percent lower use of high-tech radiology, their patients made 9.3-percent fewer emergency room visits, and the dispensing rate for lower-cost generic drugs was 3.0-percent higher.

More than 3,000 physicians at 994 medical practices in Michigan are designated a medical-home practice by Blue Cross Blue Shield.

Health insurers are also working to move care providers into contracts with incentives that pay them more for the quality of care they provide. Blue Cross Blue Shield of Michigan earlier this year signed Trinity Health – the parent company of Saint Mary’s Health Care in Grand Rapids and Muskegon’s Mercy Health Partners – to a performance-based reimbursement contract. The insurer hopes to bring many more Michigan hospitals under a similar arrangement within five years.

During the first half of 2012, Priority Health paid out $15.8 million in incentives payments to care providers.

Despite the financial incentives, making the change won’t come easily because providers will have to leave behind a fee-for-service payment system that compensates them based on the number of procedures they perform, said Richard Breon, president and CEO of Spectrum Health.

“You are fundamentally changing the way people are getting paid. It is not welcome with open arms,” Breon said during an address today at the Policy Forum. “You’re getting away from this idea that the more you do, the more you get paid.”

Health systems and physicians should focus on how to reduce utilization rates that drive up costs, Breon said. Some providers, he said, “don’t want to hear … ‘we need to reduce utilization.’”

Spectrum Health itself is presently in the third year of a three-year pilot program involing the use of bundled payments that bases reimbursements to the health system and its doctors on the quality of the care they provide.

The 2012 West Michigan Policy Forum continues today and Thursday, culminating tomorrow with an address from Gov. Rick Snyder at 12:25 p.m. at the Amway Grand Hotel Ambassador Ballroom. Some 600 business leaders have registered for the forum, which aims to outline a list of priorities that West Michigan business leaders would like to see addressed by politicians in Lansing.

Read 4893 times Last modified on Wednesday, 12 September 2012 16:08

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