Paul Ginsburg`s Presentation
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Transcript Paul Ginsburg`s Presentation
Policy Support for Cost
Containment
Paul B. Ginsburg, Ph.D.
Presentation to “The Rising Costs of Health Care:
What Can be Done,” Alliance for Health Reform,
June 12, 2012
Urgency for Cost Containment
At 18 percent of GDP, trend of GDP+2 highly
challenging
Federal and state fiscal challenges
– Revenue growth roughly in line with GDP
– Expanding fiscal risk for governments as private coverage
less affordable
Rising drain from cash compensation increases
Vision of Delivery System Reform
Providers taking responsibility for populations
Better coordination across care settings and
providers
More effective management of chronic disease by
both providers and patients
Greater role for primary care
Support from both provider and payer leadership
Provider Payment Reform
Key payment tools
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Global payment (including ACOs)
Episode bundles
Primary care medical homes
Sharing savings: at least for transition
Key to pursuing the vision
– Motivate providers
– Support providers
Importance of coordinating payers
Role of Medicare and Medicaid
Large enough to engage providers
Inspire/engage private payers
– Credibility with providers
– Pioneer ACO contracting with private payers
– Essence of Comprehensive Primary Care Initiative
Piloting Provider Payment Reforms (1)
Current pilots differ from past demonstrations
– Approaches from ACA and CMMI
– Much larger scale
Importance of current pilots
– Refine approaches to payment
– Engage provider leaders
– Point direction for future payment to provider community
Piloting Provider Payment Reforms (2)
Constraints of engaging volunteers
– Need to peg rates to provider-specific spending
Alternative is “adverse selection”
– Limits upside for providers
– Limits on savings that can be achieved by payer
– Not viable for the long term
What does Round 2 contract look like?
– Avoid pilots for better-developed approaches
Needed for bundling post-acute care?
– Not an issue with medical home pilots
Transition from Pilots to Policy
Successful pilots cannot remain as pilots
Providers will be divided over pace of transition
Steps to ease transition
– Advance notice
– Blended payment (shared savings)
Private payers cannot pursue “policy”
– Provider interest in parallel methods
– Option of policy to require uniform methods
Engaging Patients
Striking contrast between private and public payers
– Private: cost sharing incentives to choose higher-value
providers
Opportunity to shift provider mix
Add to provider incentives
Reformed payments or similar calculations
– Medicare: no patient financial engagement
Additional barrier: supplemental coverage
Concern about political risks from lack of engagement
Market Concentration
Extensive debate around ACO shared savings
concerning concentration
Forces pushing consolidation much broader
– System of future frightening to small hospitals and
physician practices
Although IPAs in CA and MA show a model for practices
– Closer alignment of providers important for integration
Challenge of passing gains in efficiency to private
purchasers and consumers
Expanding Market Approaches
Narrow network plans and tiered designs
– Tiered designs dependent on “pro-competitive” legislation
Additional pressure on premiums pushing these
approaches
– Weaker economy
– Anticipation of “Cadillac” tax
– Fixed contribution design of tax credits under ACA
Success of market approaches will determine
whether direct regulation pursued
Additional Approaches to Costs
Payment reform the most promising approach
– Consistent with shared vision
– Well-defined path to success
But other approaches have potential as well
– Avoid putting all bets on single strategy
– Most strategies complementary
– Tax treatment of health insurance most directly related
Outcomes research
Health improvement