Health Policy$ense

Capturing the Value of Payment Reform

A Breakout Session at LDI’s 50th Anniversary Symposium

At LDI’s 50th Anniversary Symposium, participants in the panel “The Future of Payment Reform” characterized and evaluated different alternative payment models (APMs) such as bundled payments and accountable care organizations (ACOs). Moderated by LDI Senior Fellow Amol Navathe, the panel included Carrie Colla, associate professor at Dartmouth and Robert Wood Johnson Foundation Health Policy Fellow; François de Brantes, Vice President and Director for the Health Care Incentives Improvement Institute; and Mai Pham, Vice President of Provider Alignment Solutions at Anthem. The convergence of these experts could not have been more timely, with recent decisions by the administration to roll back mandatory cardiac and joint replacement bundles.

Navathe opened the session by asking the panelists to discuss current evidence surrounding APMs and offer their predictions for the future. In reviewing the latest findings on ACOs, Colla explained that the breadth and depth of the incentives, as well as the experience and complexity of the organizations, all play a role in cost and quality outcomes. She said that ACOs, on average, have experienced modest reductions in spending and improvements in quality and patient satisfaction. She also emphasized that ACO contracts have provided different types of organizations with new opportunities for partnership.

De Brantes, drawing insight from his work on the Prometheus Payment model, agreed with Colla that well-designed APMs can foster newfound collaborations among providers. Commenting that physicians are particularly well-situated to lead these new partnerships, he predicted an increase in the number of physician-led bundled payment programs in the upcoming year. Pham followed up by reflecting on her experience as the former Chief Innovation Officer at the Center for Medicare and Medicaid Innovation. She called attention to the financial sustainability of APMs in the long-term, underscoring the need to align the incentives of both payers and providers in the movement towards a new value-based payment system. She also discussed the importance of engaging specialists and ancillary service providers in this movement.

Navathe asked the panelists to comment on the potential effects of APMs on vulnerable populations. Pham began by highlighting concerns about the effects of pricing on standards of care; de Brantes stressed the importance of tackling needs specific to vulnerable subpopulations; and Colla mentioned the research of her colleagues on non-medical needs like food and security.

The rest of the session, rich with questions from the audience, situated APMs in the context of nationwide health care reform—especially as an audience member asked for commentary on the effect of APMs on the trend towards greater provider consolidation. After responding that this trend began before the Affordable Care Act, Pham spoke to the overall challenge of restructuring organizations to keep up with payment reform, even to capture the low-hanging fruit already available for savings. Colla, while agreeing that there is a trend towards greater consolidation, also noted that a diversity of organizations undergoing payment transformation nonetheless continues to exist. De Brantes, after acknowledging concerns that larger organizations may be slower to drive forward value-based payment reform, expressed more hope for smaller organizations invested in this movement. He also underscored the importance of structuring these changing delivery systems around the needs of patients.

The perspectives offered by the panelists fueled the conversations that continued well past the time allotted for the session. While the panelists differed in the specifics of their viewpoints, a point they all could agree on was the need for an alignment of the incentives of both payers and providers. Now, only time—and research—will tell which APM strategies will be most effective at achieving higher quality, lower cost care in the next 50 years. 

Claire Dinh is a Master of Bioethics student at the University of Pennsylvania.