WIHI: Payment Reform As We Speak

Date: July 21, 2011

Featuring:

• Stuart H. Altman, PhD, Sol C. Chaikin Professor of National Health Policy and former Dean of The Heller School for Social Policy and Management, Brandeis University
• Jeffrey Selberg, MHA, Executive Vice President and Chief Operating Office, Institute for Healthcare Improvement

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What's the value of value-based purchasing? This is the term used for a new initiative of the Centers for Medicare and Medicaid Services (CMS) that is perhaps the government’s boldest move yet to tie hospital reimbursement to quality, focused initially on 13 measures, including patient satisfaction. The intent is pretty clear, but how likely is it that the new “carrot,” in the form of bonus payments starting in October 2012, will accelerate better patient care and usher in a new day of financial expectations?

IHI’s Jeff Selberg says the answer isn’t clear BUT, as a former hospital executive, he can’t imagine sitting on his hands waiting to see how things will play out. In other words, to Jeff, the handwriting is on the wall, and depending on how hospital leaders react, the money is either on the table or eventually being taken off the table and…most importantly, it’s not going to be put back. There is just no viable future, he says, for a health care system that’s hospital-centric, episode-centric, and procedure-centric. And it’s not just CMS that’s throwing down the gauntlet. So are employers and private insurers. The good news is that some health care providers are getting the message; Selberg hopes we can all learn from their example.

Stuart Altman doesn’t disagree. But the seasoned health care economist has been around too long, and in and out of government often enough, to know how hard it is to forge policy and payment reforms of the CMS value-based sort. Decades of doing things differently is a hard habit to break. On the other hand, like Jeff, Stuart wouldn’t advise hospitals to sit this one out, and he worries about serious unintended consequences for patients if the hospital system doesn’t develop new business models built upon delivering high quality most of all.

WIHI host Madge Kaplan welcomes Stuart Altman and Jeff Selberg for an interesting discussion.