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Delivery System Reform: Acknowledging Weaknesses and Driving Improvements


Although delivery systems are seemingly designed with beneficial intentions and streamlined utilization, a number of current practices and policies have been the subject of criticism and controversy. Two leaders in health policy shared their insights regarding these concerns and discussed the necessary steps to further improve an antiquated delivery system during changing times.

The second session of the 2012 America’s Health Insurance Plan’s Medicare and Medicaid Conferences on Monday featured a workshop titled “Delivery System Reform: A Look Back, a Look Forward,” led by 2 key speakers representing different policy institutes.

Robert A. Berenson, MD, FACP, a fellow at the Health Policy Center of the Urban Institute, began the presentation with what he described as “head scratchers.” These “head scratchers” covered a wide variety of current practices and policies that have seemingly beneficial intentions, but have actually resulted in, or currently cause, misappropriated resources, under- or overutilization, and mismanagement. The following is a brief list of the controversial practices that Dr Berenson contended should be reformed and remedied to improve the future of the healthcare delivery system:

  1. The promise of shared savings that rewards physicians based upon improvement. The question he asked was: “Why are we using a rigid year-over-year savings model that penalizes the plan’s best physician performers?”
  2. Endorsing and bundling testing without considering its inappropriateness, inherently driving the demand for unneeded services
  3. Health plans and medical groups using the “wildly inaccurate” Medicare resource-based relative value scale
  4. A failure to incorporate what is known to work in primary care into the patient-centered medical home. “Where are the core attributes of longitudinal, comprehensive care coordination in the medical home?”
  5. The dominance of hospital systems over care delivery, and their acceptance by policy makers. “Who believes that mega hospital systems are truly motivated to become efficient and raise quality, rather than to exercise market power to raise prices and dominate their markets?”
  6. The Medicare Advantage Plan’s costs for its Part A and Part B services are not actually lower than the costs of traditional Medicare. “Shouldn’t the selective contracting, utility management, real-time data, lower susceptibility to fraud, favorable selection, and the ability to peg payment rates to fee-for-service Medicare provide a substantial cost advantage?”
  7. The current Medicare debate ignores that half of the projected spending growth over the next 25 years will come from population growth. Therefore, “Shouldn’t stakeholders mention revenues as a crucial component to sustaining Medicare and improving the budget deficit?”

Dr Berenson was followed by Mark B. McClellan, MD, PhD, the director and chair of health policy studies at the Engelberg Center for Health Care Reform in The Brookings Institute. He elaborated on the current trends of health delivery systems, noting a financial alignment to support increased value and the growth of practical experience, especially outside of integrated health systems. However, because much of the debate surrounding healthcare reform is rooted in further cost management without detracting from the quality of care, he noted that there must be supportive changes in financing and reallocating resources. In addition, there needs to be a capacity for measuring the impact of these reforms at the patient level, and increased leadership to promote communication about further beneficial opportunities, build trust, and implement new interactions across providers and settings that did not previously work together. Creating this novel environment of payer-provider collaboration with patient and consumer involvement, although necessary, will not be easy, Berenson admitted, but with enough momentum and the right support, it can be accomplished.

To learn more about this session, please visit the AHIP 2012 Medicare and Medicaid Conference website.

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