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CCH® BENEFITS — 11/05/10

Opinion Leaders Want Uniform All-Payer Rates, Salaried Physician Practice

from Spencer’s Benefits Reports: The great majority of opinion leaders in health care policy and health care delivery support moving away from the current method of negotiating health care payments and adopting instead uniform all-payer rate setting or negotiation, salaried physician practice, and more transparency in quality, price, and patient experience. These were the primary conclusions of the latest Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey. The current health care payment rate setting method is a “complex system in which public and private health insurers each engage independently with multiple health care providers to negotiate or set payment rates with hospitals and physicians,” the survey noted.

More than half of opinion leaders (56%) support replacing the current payment system with all-payer rate setting, in which a government authority sets the rates, or an all-payer system of jointly negotiating rates for all payers. Such a strategy could help reduce excess administrative expenses and wide variation in prices, noted the Commonwealth Fund. Only 9% of survey respondents favored maintaining the current system.

Rewarding Providers

Opinion leaders also expressed broad support for creating a standard method of rewarding quality and efficiency across private insurers and public payers. More than seven out of ten feel it is important or very important for all payers to use the same basic method of rewarding providers. Using a uniform method may be an effective way of improving patient outcomes, reducing wasteful administrative expenses, and lowering costs, the survey respondents believed.

As the primary method for paying doctors, survey respondents also supported a salaried system with rewards for quality: 89% said they supported this method. Support was high among all categories of individuals surveyed, but lowest among health care delivery respondents (64% compared with 81% of business and insurance respondents). Only 19% of respondents in health care delivery—respondents least likely to support such a change—do not support salaried physician payment.

Although nearly all survey respondents agree that the United States must move away from the current fee-for-service payment system, opinions about the best payment approaches to replace it varied. Accountable care organizations (defined as “a provider organization that takes on responsibility for meeting the health needs of a defined population, including the total cost of care and the quality and effectiveness of services”) with either risk-adjusted capitation (63%) or shared savings arrangements (55%) were among the favored payment strategies.

“The way we currently pay for health care leads to unnecessary confusion and wide variation, and sometimes borders on chaotic,” said Karen Davis, president of the Commonwealth Fund. “Experts agree that if private payers and public programs could come together and agree to pay the same way, and the same amount, we can improve the efficiency of our health care system, eliminate administrative waste, and create better experiences for patients.”

Greater Transparency

Survey respondents also called for greater transparency in health care. Nine out of ten believed that it is important for the public to have information on clinical quality, prices, and patient experiences, and that such information ultimately is essential to achieve high performance. This information could be used to encourage physicians to meet local and regional benchmarks, allow public and private payers to become more prudent purchasers of care, and to empower patients to identify and receive care from high quality providers. Provisions in the Patient Protection and Affordable Care Act will make such information more available to the public, the Commonwealth Fund said.

Other findings from the survey include the following:

• Nearly all opinion leaders said that it is important or very important to make available to the public information about health outcomes (95%), prices paid for care (94%), and patients’ experiences with care (93%).
• Three-quarters (73%) of health care leaders supported value-based benefit design—a method in which cost-sharing varies depending on the effectiveness and potential benefit of the service—as an incentive to lower the cost of care.
• More than two-thirds (68%) supported the use of reference pricing, whereby insurers and public programs pay for a drug, device, or service based on the lowest price of equally effective treatments, for services.

The Commonwealth Fund/Modern HealthCare Health Care Opinion Leaders Survey was conducted online by Harris Interactive between September 7 and October 6, among 1,327 opinion leaders, defined as experts and influential decisionmakers. The final sample included 190 respondents from various industries. For more information, visit http://www.commonwealthfund.org.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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