The value of change

As the industry evolves beyond traditional fee-for-service models, payers and providers are finding more common ground. Long after the managed care backlash of the 1990s came limited attempts toward payment reform. The trouble, of course, was deciding exactly how to reshape the system at large to become value-driven and cost-conscious.

"I'm much more optimistic about the potential to make progress in healthcare than I've been for a long time," says Paul B. Ginsburg, PhD, president of the Center for Studying Health System Change (HSC). "And I was actually quite pessimistic for many years."

"We have an unusual opportunity today because the interest in payment reform-and I use the term 'payment reform' to refer to anything that's not fee for service, such as bundles, accountable care organizations (ACOs) and global payment-has providers and health plans wanting to go in the same direction," Ginsburg says. "And that's one of the reasons why it's moving fast."

Providers begin to accept new models

For example, medical homes have gained traction. In most cases, primary care providers (PCPs) are receiving across-the-board fee increases for meeting certain standards, such as a medical-home designation from the National Committee for Quality Assurance. Some providers that don't have significant patient volume under medical-home contracts have opted to follow the model anyway.

"Primary care physicians seem to be enthused about the whole idea of medical homes," he says. "They see the medical homes as a way of finally being able to practice the type of primary care that they would like to, but have been prevented from doing, because too many of the primary care services needed today are not paid for under fee for service."

However, Ginsburg says, medical homes don't change the payment system. They simply pay more for things that are needed to improve health, such as care coordination and preventive services. Return on investment for payers under the medical-home model continues to be a subject of debate. In fact, pilots often show an increase in services, the costs of which are not always offset by decreases in emergency room care and hospital admissions.