Physician Payment Reform Will Need Insurer Assistance

Changing the way doctors are paid could save over $1 trillion in health care costs, but physicians can’t do it on their own. One of the ways health insurers can help is by joining together to facilitate payment reform, says a study by UnitedHealth Group.

“The stronger financial incentives stemming from a multipayer initiative are more likely to provide both the impetus and support that doctors and other providers need to make changes in their practice patterns, treatment protocols, and other key processes,” says United’s working paper, “Farewell to Fee-For-Service? A ‘Real World’ Strategy for Health Care Payment Reform.”

The paper cites government projections that annual health care spending will rise from $2.8 trillion to $4.8 trillion in the next 10 years.

“There is now widespread agreement that paying providers of health care on a fee-for-service basis is a key contributor to both our cost and quality problems,” the paper states.

The results are based on surveys of 400 primary care physicians and 600 specialists in October 2011 and June 2012. They were asked about current methods of payment, their use of tools such as electronic health records, and their interest and views about possible new payment methods (see “ACOs Called Key to Doc Payment Reform,” [1]).

The study found that only 28 percent of doctors thought that physician practices in their communities were prepared to assume greater responsibility for managing patient care and to assume more financial risk — both seen as important elements of health care reform.

The new emphasis on providers means finding doctors who are leaders. In fact, as the paper says, the Government Accountability Office identified doctor leadership as the most important role “in promoting the adoption of interventions by their organizations, in winning acceptance among affected staff members for the changes those interventions entail, and in marshaling sufficient resources for the interventions to succeed.”

A joint health plan effort might work, but there might be drawbacks, including difficulty in reaching consensus, a process that might take a long time and result in a lowest-common-denominator approach to payment reform.