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More risk doesn't mean more value in healthcare, expert says

Providers need to identify opportunities to reduce avoidable spending and then build in accountability, Harold Miller says.

Susan Morse, Associate Editor

ORLANDO - For payment reform and alternative payment models under MACRA to work, they must be financially feasible for providers, according to a healthcare payment reform expert.

It sounds simple enough, but value-based initiatives by the Centers for Medicare and Medicaid Services don't always achieve the desired results, according to Harold Miller, who was speaking in the Business of Healthcare Symposium.

Miller is president and CEO of the Center for Healthcare Quality and Payment Reform. He is a member of the Physician-Focused Payment Model Technical Advisory Committee that was created by Congress to recommend alternative payment models for implementation by CMS.

One example Miller cited: the merit-based incentive system or MIPS payments - one of two quality payment models under MACRA - offers a 4 percent bonus payment.

[Also: Seema Verma suggests risk models hurt rural healthcare]

"In risk, a MIPS bonus of 4 percent doesn't come close to covering (providers') costs," Miller said.

Half of systems in CMS's Medicare Shared Savings Programs saved no money, according to Miller. In fact, the program has been losing money for three years in a row, he said.

"In the MSSP program, nothing changes in how these people are paid," Miller said. "You have to fix the underlying system in how people are paid for, and deliver, care. It's unrealistic to expect healthcare providers to save money if they don't have a payment structure."

What needs to happen is providers need to identify opportunities to reduce avoidable spending and then build in accountability. Payers need to foot the bill.

[Also: Tom Price says CMMI 'off track,' hints at changes to programs]

For instance, health plans spend over $1 million a year on hospitalization for chronic disease. Many of these admissions would be avoidable if the provider would hire a nurse care manager to find out what a patient needs, such as proper home care.

The Institutes of Medicine found 30 percent of spending is avoidable and 5 to 15 percent of all hospital admissions are avoidable.

If hospitals hired a nurse care manager, they could reduce hospital admissions by 15 percent, saving $150,000 on 500 patients, according to Miller.

But payers need to cover the nurse's salary up front. If insurers paid $13.33 per month per patient, it would generate $80,000 to pay for the nurse, Miller said.

The payer would still save money, about 6 percent savings. But most payers would be looking for a guarantee that it they paid the $13.33 per month, it would actually reduce hospital readmissions.

Surgeries are another area for savings, if avoidable surgeries are identified. But the best way to handle this is to let the provider figure out the most efficient way to spend the money insurers pay.

"Stop thinking about paying for individual surgeries," Miller said. "Give me the money and let me figure out what to spend it on."

There are two major barriers in the payment system, Miller said.

There are a lot of services of high value that aren't paid for, such as a doctor talking to a patient by phone after hours, he said.

"The other problem is that all that spending is somebody's revenue," he said.

Patients also need to know they're getting the surgery and care they need when they need it. Health systems need a way to measure patient outcomes.

Other than patient surveys, health systems currently don't have good ways to collect data on patients, he said.

Miller said he often hears, "Under the CMS risk adjustment system, things that matter don't get measured."

Twitter: @SusanJMorse

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