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

2. © 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

3. 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

4. © 2008 Jewish Healthcare Foundation
Current system does:
Pay for tests regardless of return/value
Reinforce fragmentation of care
© 2008 Jewish Healthcare Foundation

5. © 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

6. © 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

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