Health Affairs article shows 'fee for value' model effective

Health Affairs article shows ‘fee for value’ model effective

You haven’t been feeling well, so you finally decide to call your primary care doctor.  That doctor runs a battery of tests, then refers you to a specialist to get specific treatment.

“Great,” you’re thinking.  “They’re going to run the same tests and I am going to have to pay again.”

When you sit down with the specialist, you are pleasantly surprised because the doctor has the results of your last tests.  There is no need to run them again in order to confirm a diagnosis and recommend a treatment plan.

That scenario is playing out in physician offices across Michigan as a result Blue Cross Blue Shield of Michigan’s Physician Group Incentive Program (PGIP), and it could serve as a model for improving patient outcomes while reducing the cost of delivering care.

The idea is simple.  PGIP rewards groups of physicians for working successfully together by providing incentive payments for adopting best practices for patient care, including giving doctors easy access to the patient’s most recent test results.

Participating physician groups can increase their reimbursement by 40 percent by adopting changes that are improving the patient experience and patient health outcomes.  A recently published paper, in Health Affairs, describes PGIP and its groundbreaking approach to reforming payment to support new, more effective approaches to office-based practice. The paper also showcases dramatic improvements in cost and quality, such as a 24% lower rate for potentially preventable hospital admissions among PCMH-designated office practices, compared to non-PCMH practices.

The successes of PGIP were not realized overnight.  Beginning in 2004, BCBSM began discussions with health care leaders from the Michigan State Medical Society(MSMS), existing physician groups and other health care organizations.

Study authors David Share, MD, MPH and Margaret Mason, MHSA, both from BCBSM, note several key principles emerged from those initial discussions.  First, physicians must have a sense of ownership for changing the way they practice. Payers, like BCBSM, are a catalyst for that change.

Rewarding incremental progress works better at getting groups of physicians to adopt PGIP principles.  Physicians have discovered that there are existing practices that need help in getting themselves organized properly to take advantage of PGIP.

The study’s authors noted that when physicians banded together in “physician organizations,” they had greater ability to measure quality and provide incentives fairly.

This has led to physician groups evolving from a loose federation of doctors to high functioning, interdependent groups.  Those groups now include specialists and are working with hospitals to create organized systems of care, improving health outcomes in many areas.

As the authors note, there is still a lot to learn in creating organized systems of care and making sure payments from insurance companies create real value for patients.  But one thing is clear, the era of fee for service is giving way to an era of fee for value, and the route runs through Michigan where Blue Cross Blue Shield of Michigan is leading efforts to enable successful change.

Click here to find a full text version of the Health Affairs article.

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