In the realm of healthcare financing, the status quo has long been viewed as unsustainable. Rising costs and the lack of transparency have left many individuals unable to afford the care they need, even with comprehensive insurance coverage. Employers, recognizing the urgency for change, have taken significant steps to revolutionize how they pay for healthcare. In this blog, we’ll explore four pivotal steps towards meaningful healthcare payment reform, shedding light on how these strategies are transforming the landscape.
1. Data-Driven Network Strategy:
The journey towards healthcare payment reform begins with a profound understanding of the population’s healthcare needs. Employers are teaming up with partners equipped to dive deep into their data, uncovering opportunities to reduce costs without compromising care quality. For instance, if joint problems are prevalent among employees, the quest begins to identify orthopedists with stellar outcomes who charge significantly less for procedures. Similarly, employers are seeking alternatives for high-cost services like clinician-administered medications or MRIs, striving to provide safe and effective options at lower costs.
But it doesn’t stop there. Employers are looking beyond their own data and embracing the concept of all-payers claims databases (APCDs). These databases are essential for understanding the total costs in the market for episodes of care. By leveraging APCD data, all purchasers, including employers, insurers, and governments, can make informed decisions, aligning incentives with high-quality, cost-effective care. If your state lacks a robust APCD, it might be time to rally employers to advocate for change.
2. Plan Design and Education:
Successful employers are reimagining their plan designs to encourage enrollees to choose high-value care resources. While transitioning from a low- to a high-deductible plan may seem challenging, it becomes more palatable when coupled with an offer for excellent, high-value care at little or no cost. This includes covering preventive services entirely or some procedures at 100%. Employees find higher deductibles less burdensome when they know they have access to cost-effective care. High-value plan design is a win-win—it saves money for both employers and employees while steering patients towards high-value healthcare providers.
Education plays a pivotal role in this step. Employers educate their employees on how opting for high-value care can benefit their wallets. Some plans contribute to employees’ health savings accounts, ensuring they understand how to maximize their benefits. Effective messaging and communication strategies are crucial to engage employees and provide them with timely information.
3. Advanced Primary Care and Care Navigation:
Onsite clinics have become a prominent feature of value-based plan design. They offer some of the highest-value primary care and serve as valuable tools for care navigation. Staffed by independent clinicians armed with data, these clinics help identify high-value care options. Onsite clinics can extend their services to employees, family members, and retirees, often with lower fees that cover physician visits and sometimes lab work and generic medications. For smaller employers, partnerships with other businesses to establish near-site clinics or direct contracts with primary care physicians are viable alternatives.
The success of onsite clinics hinges on building trust between employees and their healthcare providers. Convenient, affordable, and informative onsite clinics are the way forward. Employers can further enhance the experience by collaborating with care navigation organizations, ensuring that employees receive timely support when seeking external care.
4. The Role of Health Policy and Competition:
While forging a path toward value-based payment reform requires collaboration with the right partners, it also necessitates a regulatory and competitive environment conducive to such transformations. Lawmakers play a crucial role here. For instance, “white bagging” has emerged as a value-based approach to procuring high-cost medications, bypassing hospital pharmacy markups while ensuring safe medication delivery. However, some hospitals are lobbying to ban white bagging, illustrating the need for regulatory support to preserve cost-saving practices.
Market consolidation is another aspect that can benefit from legislative or regulatory intervention. States should rigorously evaluate proposed mergers and acquisitions to safeguard market competition. Employers need to advocate for their interests in state capitols to maintain flexibility in managing healthcare costs.
These steps are not taken lightly, but employers are witnessing the profound benefits of their efforts. Many believe that pursuing value-based payment strategies is not just prudent but also their fiduciary responsibility. Imagine a future where all purchasers, from Medicare to Medicaid, align their strategies towards value-based payment. Such a unified approach holds the potential to transform healthcare by incentivizing better care quality and cost-efficiency across the board.
In our region, pioneering employers have blazed the trail, generously sharing their insights and strategies with others. They are actively engaged in state policy discussions, leading the charge for change. The path to healthcare payment reform is clear; it’s time for all stakeholders to join hands and embark on this transformative journey.