Four Questions With Health Care Futurist and Transformation Strategist
Nov. 22, 2013
As the Chief Medical Officer and a partner at Oliver Wyman, Health & Life Sciences, James C. Bonnette, MD, provides expertise to providers, payers and hospitals on the strategic transformation of health care delivery systems, fee for value, and health reform. He is an industry leader in the provider marketplace, driving innovation in care delivery and transformative payment models, and will be presenting at the AOA’s Advocacy for Healthy Partnerships Conference this month in Atlanta.
The intent of the Affordable Care Act (ACA) is to provide affordable, high quality health care. We all understand why this is necessary, but do you think the ACA will lead the fundamental changes needed to achieve this goal? I believe the ACA will support the fundamental changes needed to achieve this goal, in large part through using the market power of Medicare to provide incentives for innovation and new care models. The ACA, however, is not alone in driving the change needed. Other factors unrelated to the ACA supporting this change include the gradually shifting consumer mindset about their own role in health care, economic pressures driving improved efficiency in care delivery, and improved technology supporting population health management. The failure of the '80s and '90s was shifting unadjusted risk without thinking about new models of care or changing care delivery systems, and we were lacking virtually all of the tools that have been and are being developed for analytics and mobile access to care. In parallel with the ACA, the movement of both payers and employers to a mindset of “PPOs don’t control my runaway costs” and “fee for service must go away” will accelerate fundamental change in the commercial marketplace.
What are the top three reforms in the ACA that will help transform the health care system? (1) Medicare pay-for-value programs. While the Medicare Shared Savings Program, Pioneer ACO program, Bundled Payments for Care Improvement program, and other initiatives driven by the ACA and the Centers for Medicare and Medicaid Innovation (established by the ACA) are far from perfect, they represent an important shift for providers. Previously, while providers and private payers could partner to shift incentives towards value-based payment, providers were stuck with their largest payer in a fee-for-service model. The advent of these programs is akin to Medicare’s shift to the Diagnosis-Related Group (DRGs) payment methodology in the 1980s – while it isn’t enough to drive the change to value on its own, it plays a key role in supporting a movement to value-based payment for population health management more broadly. (2) Risk adjustment for commercial products. One of the most important components of the Medicare Advantage program is risk adjustment for the acuity of patients. This allowed organizations like CareMore to drive profits based on managing population and care, rather than by selecting for risk. The ACA introduces this more prominently in the commercial space within individual and small group markets. This risk adjustment mechanism changes incentives for insurers and enables them to work with providers who are committed to high-quality, cost-effective care. (3) Focus on transparency and consumer choice. The introduction of standard benefit designs and public exchanges is increasing transparency by removing noise and allowing consumers to better compare products side by side. This forces players to compete on value or risk being gradually commoditized. Increasingly, value will be defined by the quality and convenience of care and the consumer experience and less so by the benefit design.
What is the biggest nonpolitical barrier to the ACA being successful? Regardless of the regulatory and business changes occurring in the industry, we will be unable to achieve the fundamental changes necessary to provide high-quality, affordable health care without significant changes in physician behavior. As a physician community, we need to move from practicing break-fix, body-part medicine in a top-down manner to providing comprehensive, integrated, team-based care across the care continuum and partnering with our patients to help them achieve their health and wellness goals. This will require physicians to accept that other nonphysicians (care navigators, social workers, behavioral therapists, etc.) play an equally important role in a patient’s health and well-being. It will also require physicians to collaborate and communicate with one another more effectively, rather than simply referring patients without clear coordination. And it will require primary care physicians to shift from a mentality of waking up and thinking about how to treat that day’s patients to waking up and thinking about what they can do to make their panel healthier that day. Changes in incentives, implementation of new technologies, and improved patient engagement tools can help this, but fundamentally, we as a physician community will need to embrace a more patient-centric approach to care.
Are there strategies that should be explored that are not in the current health care law? Although there has been some focus on consumer transparency, transparency of payment between payers and providers is an area that deserves more attention. Increased transparency around the true costs of health care services and the relationship between cost and quality remains a major opportunity. More and more providers are entering into risk arrangements and are implementing various cost-savings strategies. However, because payments and tracking mechanisms can vary widely across payers and providers, it becomes difficult to assess the value of shifting patient populations across different sites of service. This can be particularly true for independent physician groups that are assessing multiple facilities. Although there has been movement towards clinically integrated care, additional policies and tools can help create a more informed and effective provider base when it comes to impacting overall cost and quality.