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Tipping Point in Health Care?

I’ve been in health care for over 30 years and as I think about most of the problems with healthcare… access, quality, cost, safety, etc., many of the solutions to these issues were obvious even back in those early days of my career. We knew then that fee for service reimbursement created perverse incentives and that outcome based payments aligned incentives for better care and lower costs. In general, care was siloed, inefficient and demanded vertical and horizontal coordination along with tools such as electronic health records (EHR). The problem was that there was no pressure to change unless it was self-generated. Today, many of the same problems exist, but the impetus and external pressures to improve are upon us.

I put a question mark after the title of this blog…Tipping Point in Health Care? I’m inclined to answer yes based on how rapidly things are changing. However, the key will be that we keep up the pressure so as not to squander the alignment of so many elements that can help usher in a radically changed health care system.

Implementation of the Accountable Care Act (ACA) is providing huge leverage to the entire system. The addition of 30+ million newly covered lives, the largest expansion ever of those covered by private health care and a full range of payment, delivery and quality initiatives is putting pressure on all aspects of health care. Change is reverberating throughout the country. Even the general population seems to be catching on as evidenced by some new polling that for the first time is seeing net positive opinions about ACA.

So, where are we getting traction on changing the system and what are the leverage points where continued pressure needs to be applied?

Payment: CIVHC has focused Colorado payment efforts on pushing for any changes that move us beyond fee for service to care management, pay for performance, bundled payments and ultimately to global payments. It’s hard not to be impressed with the range of payment changes we are seeing in Colorado. Medicare selected Colorado as one market to pilot the Comprehensive Primary Care Initiative (CPCI) which enlists many of the commercial payers and builds on the state’s leadership in the Patient Centered Medical Home (PCMH) movement. Seventy-five practices are starting to hit their stride with payment support for better care coordination and higher standards for quality. Medicaid’s Regional Care Collaborative Organizations (RCCO) have shown some early promise with similar payments and a focus on building systems of care across the state. We also have multiple Medicare Accountable Care Organizations, care transitions and bundled payment pilots that are part of the ACA.

On the private side, the announcement by WalMart that they are sending their employees needing total hips or knees to the Cleveland Clinic for a fixed “bundled payment” amount. It says two things to our Colorado provider market: Common, big ticket clinical procedures are no longer limited by geography and those paying for care are looking for demonstrable value (lower cost and higher quality). Improved technology will only accelerate that trend. Many forward thinking Colorado providers are starting to react and change the culture of care and we expect to see further work on bundled payments from both the provider and payer side.

Payment- Leverage Points: In talking with executives from numerous payers, all are either implementing or preparing to implement changes that move beyond fee for service. This is good but there is a need to align these efforts so that physicians are not working under disparate systems of payment and their related quality metrics. CIVHC and our partners understand that getting this alignment must be a priority to really scale these initiatives.

Delivery System Improvements: At every level, changes in payment and demands for improved quality by those paying for care are aligning to cause improvement in care delivery throughout the system. Of note is how hospitals have increased their focus on care coordination as Medicare starts deducting payments for high readmission rates. Colorado’s leadership in Care Transitions research and implementation is well known across the country. And as mentioned in the payment section, Colorado’s leadership in PCMH and the RCCO’s is causing increased focus on care coordination.

Delivery System Leverage Points: While it is interesting to see how quickly the Colorado marketplace is aligning, most striking is how the payers are gravitating to those integrated physician care networks that can effectively and efficiently deliver high value care. Kaiser Permanente’s success in this market with their integrated network and capitated system presents a competitive threat to payers who are getting pressured by employers to keep costs down. Each of the payers is working hard to find ways to work with physicians and groups which have demonstrated their ability to deliver value.

Performance Measures and Transparency: Both payment and delivery changes require robust systems for measuring performance. The push for value is coming from all stakeholders and leading to a need for transparent and aligned measurements of quality and cost. Several data resources exist for analyzing access issues across the state, and Colorado’s decision to support an All Payer Claims Database puts the state in the vanguard of a handful of states that have tools that can broadly support measurement of cost, efficiency and quality. Colorado’s APCD is now up and running with aggregated info from across the state and now contains over 3 years of claims data and info for 2.5 million covered lives. It will be a powerful tool for demonstrating cost and quality information and will support driving the market towards value.

One thing is clear as we look at the significant activity happening across our state – we must push forward and continue the momentum towards health care improvement. We owe it not only to the people and businesses of Colorado but to future generations who deserve a chance to live health lives and have access to high quality, affordable health care.

About the Author: Phil Kalin is CIVHC's President and CEO. Contact him at


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