The Pacific Business Group on Health’s new Purchaser Value Network aims to help educate the employee benefits market about value-based purchasing, share best practices and advocacy opportunities.

The initiative recognizes that the U.S. healthcare payment model is shifting from a fee-for-service to pay-for-value approach, albeit at a glacial pace. It also serves as an invaluable resource that brokers and advisers can suggest to employer clients that are looking for ways to increase engagement, reduce costs and improve health outcomes.

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David Lansky, president and CEO of the PBGH and head of the PVN, is encouraged by the creation of new payment models and processes at the national level, as well as many states restructuring their own purchasing programs for state employees and Medicaid. Under the Medicare Access and CHIP Reauthorization Act of 2015, a new payment system that ties an increased percentage of Medicare fee-for-service payments to medical outcomes must be implemented by 2019.

However, Lansky laments a lack of input from private employers. For example, he says they’re not involved with the Health and Human Services Learning and Action Network, nor do they have a role with the Health Care Transformation Task Force, which includes about 40 large delivery systems and a number of large payers. Both policymaking organizations were formed about 18 months ago. Lansky hopes the PVN will “influence the national process of setting new payment models and educate the purchaser community about those new changes.”

The PVN, which represents some of the nation’s largest private and public healthcare purchasers, aims to align the interest of private employers with state and the federal governments. There’s also an acknowledgement of the power employers wield through their purchasing power to accelerate the pace of value-based payments.

Lansky acknowledges that the issue of physician payment reform is complex and not a daily concern for most corporate HR departments. But he says the PVN can channel their ideas to key policymakers, as well as sponsor webinars and meetings that gather employer comments that could help shape, for instance, a maternity bundled payment program.

The thinking is that employers, along with their brokers and advisers, could voice concerns and suggestions about seeing fewer inappropriate C-sections, more choices for pregnant women or reducing hospital care spending relative to routine births. “That message will help the carriers move forward with changing their payment and quality improvement models,” Lansky says.

His expectation is that the PVN will act as a conduit for “a much stronger, clearer voice on behalf of employers about the changes needed in healthcare.” And as part of that mission the aim is to advance innovative products or services that highlight better value and outcomes at controlled costs.

A link to value
Lansky predicts that a decade from now, “what’s left of fee for service will be strongly linked to value in some way.” While there are still many good reasons to pay certain health professionals on a fee-for-service basis, he believes “it has to be much more strongly tied to value.”

But it could be a continued uphill battle winning the support of providers who have long been reluctant to embrace physician payment reforms, fearing new rules could unfairly penalize some doctors or significantly reduce compensation. Consider, for example, a complaint by doctors at New York’s public hospitals that the standards for tying just 5% of their pay to quality care have been set too high. Modern Healthcare reported that they’re concerned the move would “reduce their ability to collect incentive dollars.”

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There has been a lackluster support for change on their part, Lansky admits, citing as an example their reaction to proposed changes in Medicare drug payments. It’s understandable that doctors, nurses or x-ray technicians feel the way they’ve been trained and conduct themselves is being threatened, he says. Moreover, he notes the likelihood that there will be “fewer people in certain roles in healthcare,” along with fewer diagnostic or lab tests.

But Lansky senses a growing willingness among the provider community to accept value-based payments and says the challenge will be how to make changes that don’t create a backlash. But for that to happen, he says it’s imperative that corporate America plays a substantive role in helping transition to a new payment model.

“Our challenge as a society is, how do we manage it in a way that gets us to a more efficient and affordable health system without causing a lot of pain?” he poses.

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