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News Clips
Commonwealth Fund: How Upfront, Predictable Payments Can Improve Primary Care (5/13) – Experts increasingly agree that to strengthen primary care in the U.S., we should promote “prospective payment” in which providers are given upfront payments to care for each patient for a particular period. Recognizing that there is a need to shift payment on a national scale, policymakers are considering ways to scale and spread prospective payment for primary care. The CMS Innovation Center recently announced two new primary care payment models — Making Care Primary and Primary Care Flex. Both will support coordinated, team-based care through prospective payments. Congress is also considering enabling prospective payments for primary care in the Medicare Physician Fee Schedule. As policymakers seek to scale prospective payments, and to ensure they result in better care for patients and providers, they can apply lessons from previous, successfully implemented prospective payment models in primary care.
Heath Affairs: Physician Group Practices Accrued Large Bonuses Under Medicare’s Bundled Payment Model, 2018–20 (5/9) – The Bundled Payments for Care Improvement Advanced Model (BPCI-A), a voluntary Alternative Payment Model for Medicare, incentivizes hospitals and physician group practices to reduce spending for patient care episodes below preset target prices. The experience of physician groups in BPCI-A is not well understood. This article found that physician groups earned $421 million in incentive payments during BPCI-A’s first four performance periods (2018–20). Target prices were positively associated with bonuses, with a mean reconciliation payment of $139 per episode in the lowest decile of target prices and $2,775 in the highest decile. In the first year of the COVID-19 pandemic, mean bonuses increased from $815 per episode to $2,736 per episode. These findings suggest that further policy changes, such as improving target price accuracy and refining participation rules, will be important as CMS continues to expand BPCI-A and develop other bundled payment models.
JAMA: Financial Games in Health Care—Doing Well Without Doing Good (5/9) – This article discusses dimensions of financial gaming and highlight policies that might address it. Urgent and significant action is necessary before harms to patients escalate. One form of gaming is asset looting—businesses taking money out of health care and then extorting state governments to replenish the funds. A second financial gaming strategy is to merge independent medical practices into a single entity and use the resulting market power to raise prices. This strategy is particularly prevalent in areas with high clinical need and a limited number of clinicians. But the practice is near universal; a large share of health care mergers in recent years have been directed at creating market power. In addition to instituting higher pricing following the mergers, clinicians in merged groups steer patients to high-priced, in-group specialists.
Health Affairs: Tame The Private Equity Beast By Shifting Its Focus To Value-Based Care (5/8) – Private equity (PE) in health care is increasingly being viewed as a profit-driven horseman of the apocalypse. While this portrayal is merited in many respects, PE can also play a positive role in health care reform. While PE firms need to be reined in overall, they should be encouraged to invest in entities—such as independent primary care groups and accountable care organizations (ACOs)—that need additional capital to make the transition to value-based care. In effect, this approach would induce PE firms to reallocate their capital in ways that would benefit not only their investors, but also patients, providers, and society at large. Considering that waste accounts for roughly $1 trillion of health care spending, the ability to profit from helping providers reduce that waste should be a powerful incentive to private equity.
Health Affairs: Protecting Patients And Society In An Era Of Private Equity Provider Ownership: Challenges And Opportunities For Policy (5/8) – Private equity (PE) acquisitions in health care delivery nearly tripled from 2010 to 2020. Despite concerns around clinical and economic implications, policy responses have remained limited. This article presents four domains in which policy can be strengthened. First, to improve oversight of acquisitions, policy makers should lower reporting thresholds, review sequential acquisitions that together affect market power, automate reviews with potential denials based on market concentration effects, consider new regulatory mechanisms such as attorney general veto, and increase funding for this work. Second, policy makers should increase the longer-run transparency of PE ownership, including the health care prices garnered by acquired entities. Third, policy makers should protect patients and providers by establishing minimum staffing ratios, spending floors for direct patient care, and limits on layoffs and the sale of real estate after acquisition (forms of “asset stripping”). Finally, policy makers should mitigate risky financial behavior by limiting the amount or proportion of debt used to finance PE acquisitions in health care.
Brookings Institution: Comments on the Request for Information on consolidation in health care markets (5/8) Loren Adler and Matthew Fiedler commented on a request for information on consolidation in health care markets by the DOJ, FTC, and DOJ. The authors recommend that the agencies collect and make available systematic, high-quality data on the ownership structures of health care entities, with a particular focus on improving the data available on physician practices. The letter makes two specific recommendations to improve the availability of ownership data: (1) CMS should collect systematic data on physician practice ownership as part of the Medicare enrollment process, as it does for institutional providers; and (2) CMS should take steps to improve the quality of entity-reported data.
Med City News: Report: More Employers Are Looking To Deploy Value-Based Care (5/7) About a third of employers are integrating value-based care into their employer-sponsored insurance, according to a new survey. Another third of employers are determining the “best-fit strategies for their organization” when it comes to accountable care. The report was published Sunday by the Milken Institute with support from Morgan Health. The survey received responses from 72 employers of varying sizes and industry types. While many employers are hoping to advance accountable care, respondents noted several barriers. These challenges include difficulty in setting up value-based arrangements and health system infrastructure limitations. Employers also listed capacity, bandwidth issues, geographic limitations and cost as major barriers.
Medical Economics: Reps question Change Healthcare CEO over cyberattack, hammer on effects of consolidation on smaller practices (5/2) – Smaller and medium-sized physicians’ practices and other medical service providers were slammed financially when hackers launched a massive ransomware attack on Change Healthcare. The CEO of its corporate parent said he wants to help them stay afloat. Based on more than two hours’ worth of questions from House Committee and Subcommittee members, it appears they, along with physicians and other health care providers, are suspicious about UnitedHealth Group’s connectivity and willingness to help. A number of the lawmakers, including some of the physicians, also asked about the cyberattack and hammered on the connections to continuing consolidation in health care.
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