Fundamental Payment Reform for Chronic Care Nancy Zionts, MBA Vice President of Program & Planning Jewish Healthcare Foundation © 2008 Jewish Healthcare Foundation

© 2008 Jewish Healthcare Foundation Goals to be addressed: What is the need for fundamental payment reform in chronic care? What would an improved payment system look like? Models of chronic care payment reform © 2008 Jewish Healthcare Foundation

Current system doesn’t adequately cover… Prevention or primary care Time for diagnosis and care planning or managing complex patient needs Use of ancillary providers (nurse practitioners, pharmacists) © 2008 Jewish Healthcare Foundation

© 2008 Jewish Healthcare Foundation Current system does: Pay for tests regardless of return/value Reinforce fragmentation of care © 2008 Jewish Healthcare Foundation

© 2008 Jewish Healthcare Foundation In the current system… Patients don’t have financial incentives for adherence Patients do have financial disincentives due to required co-payments Payers do not have mechanisms for directing or encouraging patients to use lower costs or higher quality providers © 2008 Jewish Healthcare Foundation

© 2008 Jewish Healthcare Foundation Specific examples of the problems with existing payment system: End of Life Lack of information about care options Reimbursement and culture geared to cure not care; acute (Cancer) versus chronic (Alzheimer's) Last six months account for 10-12% of healthcare costs; 27% of Medicare costs are in last year of one’s life © 2008 Jewish Healthcare Foundation

Example: Chronic Disease “Management” – an oxymoron? Fragmented care resulted in “high fliers” Overuse of emergency rooms Little planning for patients upon discharge that will help people manage their own disease Little connection between hospital visits and primary care © 2008 Jewish Healthcare Foundation

Example: Behavioral Health and Addictions Separation of physical and behavioral health in reimbursement and practice Result: Undiagnosed (or unattended to) depression and substance use that complicates care and prevents disease management Increased hospitalizations, ER visits and costs © 2008 Jewish Healthcare Foundation

Recommendations from Payment Reform Summit A single comprehensive Care Management Payment Could be used for any appropriate service provided by a trained/licensed practitioner Bonuses or penalties based on outcomes and patient satisfaction Patients pay more for using higher cost lower quality providers Patients would have financial incentives for adherence © 2008 Jewish Healthcare Foundation

How would Comprehensive Care Payment be determined? Adjustments for case complexity Regional Collaborative Organizations participate in determining categories and recommendations as to what is covered No adjustments for outlier cases © 2008 Jewish Healthcare Foundation

What are the conditions for provider participation? Demonstration of structure and systems in place to provide elements of care – including information systems, team of professionals, relationships for referral © 2008 Jewish Healthcare Foundation

What Issues and Challenges must be addressed? Capacity Building: staff training around chronic care, geriatric and end of life care management, information system, development of Regional Collaborative Development of appropriate quality measures and risk adjustment The need for experimentation at a regional level Assuring patient choice is preserved © 2008 Jewish Healthcare Foundation

Examples of payment reform initiatives in Pittsburgh and beyond Diabetes at the Pittsburgh VA COPD End of Life Addictions © 2008 Jewish Healthcare Foundation