'Using More Than One Payment Model to Align Goals and Achieve Higher Quality Makes Sense When Looking at the Big Picture' by James Roosevelt, Jr.

As the country is poised for national health care reform there is increasing public discussion and interest in the topic of physician payment. To ensure that the right dialogue is taking place, we need to be explicit about the value of providers and payers sharing the same goal: alignment of financial incentives, which is based upon delivering the right care at the right time in the right place. One cannot have a conversation about alignment of financial goals, however, without addressing the opportunity to elevate quality standards for patients. It is my prediction that as national health reform comes closer to reality, we shall hear more about quality incentives in provider contracts the same way we are hearing about investment in comparative effectiveness research. This is good news for all of us.

Why is this conversation so important now? It is my belief that we are at a critical juncture as evidenced by the federal government’s attention on health care, the state’s payment reform initiatives and as part of that—the convening of the Commonwealth’s Special Commission on the Health Care Payment System, which seeks to evaluate the use of differing reimbursement models between payers and providers.

The reality is that fair contracts and aligned goals have a role a play in keeping health care costs reined in as medical expense is the greatest driver of rising expense. Moreover, the merit of quality incentives extends far beyond cost saving to improving health, as this action is one way to move from a paradigm of illness to one of prevention and wellness. It must be said, however, that quality incentives in provider contracts is not a new phenomenon. Aligning the interests of health plans and physicians in order to improve quality and curtail waste has existed to some degree throughout the past years, including the period when most providers shifted financial risk back to the insurers, but as I have said before, this is unprecedented moment.

What has not been covered to a large degree by the press or successfully articulated in other forums is what I have learned from my own experience as the president and CEO of Tufts Health Plan. And that is, there is no “one size fits all” when it comes to partnering with providers to achieve fair contracts. It is a mistake to make such an assumption. We use a variety of payment models, which depend heavily on the type of business for which we are contracting (fully insured commercial, self insured commercial or Medicare), as well as the type of provider, their ability to invest in infrastructure to manage care and their scope of services.

To enhance quality and increase the likelihood of a successful partnership, health plans must be prepared to support providers with data and effective process support in their management of financial risk. This includes sharing of best practices among medical groups and more robust reporting to identify opportunities for more efficient delivery of care. Thoughtful medical management that reduces variations in health care practice and provides information on best practices using evidence-based medicine does align the interests of health plans, providers and ultimately health care consumers.

The reality is that for whatever differences that must addressed during a negotiating session, health plans and providers share the same goals: we both want a high degree of patient and member satisfaction, high quality care, fair payment that takes into account opportunities to reduce waste in the system, and ultimately, a healthier community. Together, we have reason to be optimistic that these efforts are underway and working for all of us.

James Roosevelt, Jr.
President and CEO, Tufts Health Plan