By John Reichard, CQ HealthBeat Editor
October 19, 2012 -- The head of the $10 billion Medicare and Medicaid innovation center says he's "thrilled" with the response to a grant program announced this summer that aims to transform state health care delivery systems, one by one.
The program would accomplish that in large part by uniting government and business health care purchasers behind new payment models that spur providers to deliver more efficient care.
"It's all about being multi-payer," Richard Gilfillan, head of the Center for Medicare and Medicaid Innovation, told state officials at a meeting this week sponsored by the National Academy for State Health Policy.
Announced in July, the grant program is a $275 million initiative that aims to foster collaboration among health care purchasers, including business who pay for insurance and government programs. The application period for the first round of grants in the State Innovation Models program closed Sept. 17.
Up to 25 states will each get $2 million to develop plans for collaborating with employers, federal officials, and providers on retooling health care in the state. The remaining $225 million will be divided among the five states with the most promising "ready to go" state transformation models, Gilfillan said.
Why Multi-Payer Matters
"Multi-payer" might sound like more mushy policy jargon. But it could be key to new forms of payment that allow doctors and hospitals to actually reorganize treatment services to do the things many wonks want: more team-based care, access to doctors and nurses by phone and email, smarter use of health information technology, and better preventive care.
Why is it key? Because a medical practice, for example, can't reorganize to deliver care in promising new ways unless most or all of the insurers that cover its patients agree on a common payment approach that rewards the practice for the new model of treatment.
Gilfillan's comments struck a responsive chord with two fellow panelists at the conference in Baltimore: Andrew Webber. president of the National Business Coalition on Health, which represents 56 employer health care purchasing coalitions around the country; and Alan Weil, president of the National Academy for State Health Policy.
Gilfillan gave a concrete example of how multi-payer collaboration works: the Innovation Center's Comprehensive Primary Care Practice Initiative.
That pilot pays medical practices in seven markets to serve as "medical homes" for chronically ill patients. Patients get round-the-clock access to doctors and nurses, including the ability to email their doctors. Health care professionals call them to check on whether they are taking their medicine and getting other preventive care. The practice is supposed to coordinate their overall treatment, including care other doctors provide, to avoid wasteful tests and prevent medication mix-ups.
Practices get a per capita payment each month to provide these services. The practices can afford to make this change because virtually all the insurers they deal with—from Medicare to commercial health plans—have agreed to provide the monthly payment.
In the seven markets, 70, 80 or 90 percent of the patients in the participating primary care practices are covered by purchasers who are part of the coordinated project, Gilfillan said. "And what we're looking for in the state innovation model is to do the same thing in the states."
Gilfillan said CMS has convened panels to review the proposed system redesigns submitted as part of the Innovation Models program. States that have submitted these system transformation proposals include Maine, Colorado, Arkansas, Ohio, and Minnesota.
Gilfillan said the program also aims to enlist providers in system redesign efforts. He said they too want to coordinate in an efficient way with their peers to better take care of patients.
"We need to figure out a way to support our health care providers in delivering what they always went to school for," said Gilfillan. "Nobody went to school to deliver fragmented, expensive, unsustainable care. We think the state innovation model is actually the most powerful way for us to work together and create a world in which providers, other participants in the health care system, can pursue that."
Webber echoed that point. Innovative providers walk through his door every day saying that "we're ready to go" on retooling treatment, Webber said. They need employer unity on quality measures, new forms of payment, and benefit redesign that allow that to happen, he added.
Webber sees employer cooperation as key to making this project work. "I'm glad we're pointing the finger back at us as sort of the engine to make payment reform possible," he said.
He added that it isn't just a case of purchasers needing to come together, but also of purchasers needing to come together with providers.
Making It Happen
Weil, the panel's moderator, focused on how to take this conceptual agreement and turn it into a practical plan for collaboration. He prodded Webber and Gilfillan on that point.
Gilfillan replied that the innovation center is working with the federal Office of Personnel Management on a more unified approach to health care purchasing. Webber said employers and other purchasers must be persuaded to emerge from their "silos" to talk about a common approach, and that he's been thinking about how to get them "in the same room."
"That convening function is critically important," Webber said. Something along the lines of a "Value-based Purchasing Council" could be formed to bring together not only employers but also providers to discuss system redesign, he suggested. The council would need a business model that would let it be self-sustaining, he added.
The three speakers noted that system redesign would have to be customized to fit local markets. In some markets, care is relatively well coordinated. In others, it's very fragmented with little cooperation among local medical practices and hospitals. That means purchasers can't insist on one form of payment across the board, such as up front per capita payments for patient care. Why? Because providers may not be at a point where they can function in such a system and still must practice under the piecework, fee-for-service system until they organize and master team-based care.
Gilfillan said that's why the Innovation Models program approaches system redesign on a state-by-state basis. Experts don't yet have the knowledge to be able to say which approaches will work best, but "it will come."
Weil pressed further on how to get employers to come together.
At one point, the Rhode Island health Commissioner Christopher Koller stood up in the audience and joined Weil in that effort. Koller said that in his state he's been able to get health plans and government purchasers to the table. But the hard part is local self-insured employers that are branch offices of large national corporations. "We don't even know who to talk to," he said.
"Mea culpa," Webber replied, acknowledging the difficulty. He said that when he urges employers to become "change agents" in health care delivery they say "this is not what I was put on earth to do." But despite the frustrations involved, state officials need to try to engage the corporate headquarters of national self-insured employers, Webber advised.
He also noted that employers have a strong self interest in uniting despite their reticence. Their desire to have a more competitive workforce puts them "in the game of population health management."
But the challenges of bringing purchasers together are not to be underestimated. One of the big issues in bringing purchasers such as Medicare, employers and insurance exchanges together is that "everyone wants to have control," Webber noted.