I like questions. As a health care payment reform consultant at Stryker Performance Solutions, part of my job is to share knowledge and expertise.
But first, we must learn about the clients’ circumstances and situations. While we gather and analyze lots of data, one of the ways we gain insights is to meet with the clients and ask questions; lots of questions.
Dr. Marshall Steele, my colleague and Medical Director of Stryker Performance Solutions, began a recent client engagement by asking a question that I have been thinking about ever since and which inspired this article. You may know Dr. Steele as the creator of the Marshall}Steele company (now part of Stryker Performance Solutions) and its Destination Centers of Superior Performance that have been implemented in over 250 hospitals. I consider Dr. Steele to be a mentor and if you have met him you know his penchant for both jokes and questions. He is a strong proponent of both and likes to use questions to gather information, expose gaps in process, gain consensus, and even present a point of view. I share his opinion that consultants demonstrate their expertise more by the questions they ask than the answers they give.
We were conducting the kick-off meeting for this engagement with all of the administrative and physician leaders present in the room. This engagement focused on physician/hospital alignment techniques and various incentive arrangements would be developed to incentivize physicians to cooperate in the planned initiatives to improve quality and reduce costs. Dr. Steele began the meeting by asking a question of the entire audience, but which I suspect was really targeted to his fellow physicians. His opening remark/question was simple and profound: "If physicians are dedicated to improving the health of their patients, why do we have to pay incentives to them to improve quality?"
Maybe it was because it was the first meeting in a new engagement where many of those attending didn’t know each other well, or maybe it was because the question was provocative and challenged certain assumptions that are not often voiced, but the room was silent for an awkward moment. Then a dialogue began that helped both the health system and the physicians better understand each other’s point of view.
Dr. Steele’s question, however, stuck in my head and I have reached the conclusion that any question about whether or not we should incentivize physicians to improve quality is now moot. The way physicians and all other providers are being paid is very rapidly changing, and they are increasingly paid based on quality. On January 26, 2015 CMS announced it will tie 30 percent of all fee-for-service payments to providers to quality initiatives through alternative payment models--particularly accountable care organizations (ACOs) and bundled payments--by 2016 and this will rise to 50 percent by 2018. The Health Care Transformation Task Force (several of the nation's largest health systems and insurers) also announced in January 2015 the goal of shifting 75% of their business to contracts with incentives for quality and lower-cost healthcare by 2020. Perhaps most importantly, on July 10th, CMS announced the massive Care Coordination for Joint Replacement program, creating the first mandatory bundled payment program that will cover 25% of Medicare’s Total Joint Replacement patient population. The shift away from fee-for-service payments towards risk and quality based programs is happening at a pace more rapid than most had expected.
So, why are incentives necessary? Historically, there has often been a lack of trust, let alone true alignment, between hospitals and physicians. Quality improvement and efficiency initiatives are not new and many physicians feel that they have devoted substantial time to these initiatives in the past(time which could otherwise have been spent seeing patients and generating income)when the hospital received all of the benefits. Incentivizing physicians to improve quality recognizes that improvements in quality bring reductions in cost and greater profitability to the hospital. It also recognizes physicians as critical drivers of change in how care is delivered from both a quality and cost standpoint, and that moving the needle without physician engagement may prove impossible for the hospitals.
The new health care reform initiatives (including bundled payments and ACOs) permit physician alignment strategies such as gainsharing in recognition of the fact that physicians typically drive the care redesign that causes quality improvements. Fairness dictates that they should share in the benefits that are derived. The public also benefits through higher quality, more efficient care.
Given all of these changes in the health care landscape, I’d like to pose a new question as a way to present a point of view. In view of the radical changes in payment methodologies spurred by health care reform, and the quality improvements with cost reductions that are expected to follow, should Dr. Steele’s question be changed from "Why do we have to pay physicians to improve quality?" into a new question: "Why would we pay physicians for anything except improving quality?"?
Paul Jawin, JD
Vice President, Alignment, Strategy and Reform
Paul brings more than 30 years of legal, business, financial and capital markets experience to his role in developing physician alignment and payment reform programs. A co-founder of Comprehensive Care Solutions—acquired by Stryker in 2012—he has helped physician organizations and health systems align and turn reform into opportunity by utilizing new payment and delivery structures, including Accountable Care Organizations (ACO) and bundled payments.
Paul is a regular speaker at industry conferences and events, including the American Academy of Orthopaedic Surgeons Hospital-Physician Alignment Symposium. He co-founded and served as Senior Vice President and General Counsel of Secured Independence, Inc., and has held senior executive positions with public and private companies involved in real estate and senior housing. Paul has a Bachelor of Arts degree in History from Ithaca College, and practiced corporate, securities and real estate law in New York City for more than 10 years after graduating from Syracuse University School of Law with a Juris Doctor degree.
More information about Stryker Performance Solutions may be found at www.strykerperformancesolutions.com.
paul.jawin@stryker.com
1.800.616.1406.