Medical Device Daily Washington Editor

BOSTON – “Assessing the sustainability of payment reform” is not only an exercise in prognostication – one that is difficult to avoid indulging in of late – and also the title of a discussion at the fourth annual Leadership Summit on Healthcare Quality & Pay-For-Performance held here at the Marriott Copley Place hotel.

The event, which opened Sunday and closes today, boasts a select group of executives, government officials and highly regarded researchers with a variety of experiences and plenty of ideas on how to fit the round pay-for-performance (P4P) peg into the square hole of the traditional service reimbursement scheme.

From the first day, however, it was made obvious that herding the many cats of U.S. healthcare into this approach will be quite a task, despite convincing early returns on the subject.

Peter Lee, CEO of Pacific Business Group on Health (PBGH; San Francisco), served as the moderator for Sunday's sustainability discussion, and commenced by asking rhetorically: “What payment reforms?”

He said that the healthcare payment system is “dysfunctional” and that “we've hardly put our foot in the water” of payment reform.

Lee chided any rosy scenarists in the audience, insisting that addressing payment reform “is something that we all have to step up to.” Lee's employer is, according to its web site, “a business coalition of 50 purchasers [that] seeks to improve the quality and availability of healthcare while moderating cost.”

Presenting at the event for the Centers for Medicare & Medicaid Services (CMS; Baltimore) was Barry Straube, MD, acting director of the Office for Clinical Standards and Quality. He remarked that every payment reform carries some risk of creating a new problem or exacerbating an existing problem and that “we're still in a nascent period” in this effort.

And he had, like Lee, a sobering message for the audience: “We're kidding ourselves when we take pride on the few [quality] measures” currently available. Straube said that “multiple payment silos” are one of the banes of the current system, noting that one path to the ideal would be to encourage voluntary reporting on quality and outcomes, then pay healthcare entities to provide those reports, and then make the leap to P4P.

“We have to ensure joint accountability” between providers and payers, Straube insisted.

Allan Korn, chief medical officer of the Blue Cross Blue Shield Association (Washington), identified three issues of central importance in modern healthcare: namely cost, the population of the uninsured and the population of the underinsured.

He noted that the “silo effect” could be addressed by the notion of a medical home, where one provider could tie together all the threads of specialty care and multiple facility use for a patient.

“We have a very difficult time paying for” the expertise needed to provide this medical home, though the notion of a “medical home has been around for some time,” he said. And he said that the likelihood is that a primary care practitioner – often a role filled by internists rather than by a general practitioner – will not be able to play the part until something is done to make such a practice feasible.

George Bennett, chairman and CEO of Health Dialog (Boston), said that “unwarranted variation” in care might account for as much as 30% of the cost of Medicare services. He described prophylactic care and chronic disease care as healthcare opposites, the former being insufficiently pursued and the latter excessively deployed.

Bennett cautioned that “P4P will not solve all the problems” of modern healthcare.

On the other hand, he championed at least one cure for excessive care: group compensation. “The integrated system . . . is where we seem to get the most efficiencies,” Bennett noted.

An integrated system might be, but need not be, one in which all providers work under one corporate roof. At the very least, it should be one that “at least make[s] sure that the [patient's] information is disseminated” to all the providers and sites involved in his or her care.”

Bennett said that he hears “lots of talk about how much we pay,” but questioned whether “we have enough emphasis on whom we pay.” The medical home might be addressed by the use of a mechanism not unlike a general contractor in the construction industry, someone who would coordinate and oversee the entire spectrum of care for the individual patient.

In the discussion that followed, Lee voiced a notion that may have occurred to many stakeholders, namely that U.S. healthcare is suffering from “pilot paralysis,” meaning a lack of leadership

Straube disagreed, insisting that CMS “has numerous demonstrations” under way for P4P, but that “there is a misconception as to the duration and turn-around” of such projects.

He also cited the hospital quality effort jointly managed by CMS and the Premier (Charlotte, North Carolina) hospital consortium, which has already shown that “all five areas improved” in just the first two years of the P4P field test. Straube added that the data from many such projects are reported quickly.

Volume of services is another feeder to the increasing cost of care, but Korn admitted that “we're shy of parameters” to clearly identify how much help new medical technology provides. He said that X-ray angiography looks good on paper but that the exposure to radiation is excessive.

“We can withhold coverage until we know [a technology] improves outcomes,” Korn added, but the algorithms currently available for cost/benefit analysis simply are not vigorous enough to prospectively evaluate new medical technology.

Bennett suggested that to address the element of treatment efficacy, a fully working P4P system may have to loop back around to the patient.

“Part of the answer is public education,” he said, noting that much information on the side effects of drugs is not communicated very adroitly. To say that the use of a drug can double one's chances of dying of heart attack might not be as meaningful as defining the risk as going from 1 in 1 million to 1 in 500,000. Such information, he insisted, should be presented “in a professional way, not in a hysterical way.”

In an informal discussion after the meeting, Bennett told Medical Device Daily that to ask physicians to take on the task of educating patients probably would make it that much more difficult just to get an appointment with a doctor, but he said that other means are available.

One method, as one might guess, would be computer-based tutorials. “Nurses can do it, too,” he added.