Payment Reform Urgently Needed

The way in which healthcare is paid for in the United States is a perverse mess — it rewards unnecessary procedures and is lacking in transparency while failing to reward providers for doing things that are actually needed.

“We know the way we pay for healthcare today is inherently inflationary and often does not lead to the outcomes we want,” said Suzanne F. Delbanco, executive director of Catalyst for Payment Reform, a coalition of employers and healthcare purchasers. She spoke at a general session on payment reform on Day 2 of the Health & Benefits Leadership Conference in Las Vegas.

The CPR is working to create a “critical mass” of employers that would push for changes needed to rectify serious problems — such as those uncovered by a report 15 years ago that found healthcare providers throughout the United States charging wildly varying prices for the same medical procedures that bore no relation to quality or outcomes. A decade and a half later, Delbanco said, little progress has been made.

That’s not to say there aren’t bright spots: New innovations such as accountable care organizations and patient-centered medical homes have proven to be viable alternatives to the traditional fee-for-service model and have resulted in lower prices and better outcomes, she said. The CPR is also encouraging employers to experiment with new approaches such as shared savings and non-payment for botched or unnecessary procedures.

One hurdle has been the fact that many employers are more comfortable making changes to benefit-plan designs that shift more of the cost to employees than in challenging the traditional way in which healthcare is paid for, said Delbanco. “Ideally, employers should be doing both,” she said, adding that employees have generally become more receptive to the need to control costs.

Delbanco was joined on stage by Anna Fallieras, G.E.’s program leader for healthcare initiatives and policy, who described her company’s journey to consumerism.

“Our message to employees is, ‘Be an active consumer: Think about managing costs and getting quality care,’ ” she said, adding that GE spends $2 billion per year on employee healthcare.

GE, which rolled out consumer-driven health plans to its employee population in 2013, also created new tools and services to help them make better healthcare decisions. These include a telephonic health-coach service designed to help employees get access to top-performing healthcare providers, and a treatment cost calculator that offers price and quality information on providers.

The cost calculator has helped employees save between 5 percent and 30 percent on their healthcare bills, said Fallieras. GE also offers a telemedicine service that’s garnered a 90-percent satisfaction rate from employees, she said.

Fallieras called on other employers to join GE in fighting for payment reform. “We can’t do it all ourselves,” she said. “We as employers have a central role.”