Obama announces new network tasked with health care payment reform

Published on
March 26, 2015

As the media takes stock of the Affordable Care Act (ACA) on its fifth anniversary, the White House on Wednesday announced a new assembly of health care leaders tasked with leading health care towards a more efficient and less costly model of care.

More than 2,800 insurers, states, providers, consumer groups, employers and individuals have joined the federal government’s new Health Care Payment Learning and Action Network, according to the U.S. Department of Health and Human Services (HHS). The group held its inaugural meeting in Washington, D.C. on Wednesday.

The main objective of the “Action Network” is to move health care away from the fee-for-service model, where doctors and hospitals are paid based on the volume of services they offer, towards a pay-for-performance model of care, which reimburses providers based on the quality or value of services.

President Obama, speaking to those assembled at the White House, touted the ACA’s success in offering health care to more Americans. He said the Health Care Payment Learning and Action Network marks a new phase for the law.

“What your efforts have meant is the start of a new phase where professionals like you and organizations like yours come together in one new network with one big goal, and that is to continue to improve the cost and quality of health care in America.”

The president cited organizations and individuals that are pioneering new models of care, such as the American Cancer Society, which he said is using new patient-centered approaches to improve outcomes. He also pointed to Governor Jack Markell of Delaware, who has set a goal that 80 percent of residents will “receive care through new and improved payment and delivery models within five years.”

In a series of meetings and webinars, insurers, providers and employers and others who have joined the network will exchange ideas about how to shift to medical care so that it is more efficient and rewards providers based on health outcomes and quality.

In late January, HHS announced that Medicare, the insurance program for the country’s elderly and disabled, had set a target of moving 30 percent of payments into pay per performance models by 2016, and 50 percent by the end of 2018. In that same announcement, the department announced that Medicaid, the program for low-income adults and children, would also begin changing the way it makes payments.

On Wednesday, a White House panel offered some insight into how the health care system may shift in the coming years.

Gary Loveman, chief executive officer of Caesars Entertainment, which employs 72,000 workers, spoke of a pilot program launched earlier this year in Reno, Nevada. The program bundles payments for joint replacement surgery so that one lump sum is divided among surgeons, rehabilitation services and the hospital. The idea is to offer incentives to providers so that they will work on lowering the rate of hospital readmissions and negotiate better rates for replacement devices.

“We believe (patients) will have both a better health outcome and substantially lower out-of-pocket costs,” Lovemen said.

Governor Markell of Delaware, also on the panel, said Delaware is working to use technology to follow up with patients diagnosed with heart issues.

“If they’re gaining weight, or having other issues, it could be a precursor to other problems,” Markell said. A visit by a nurse, or other preventive measures, could save the patient from having more problems down the line. Under the fee-for-service model, he said, there’s no incentive for hospitals to offer these kinds of follow-up services. As a result, Delaware is looking to embrace new payment models.

“The reason it’s so complicated is you’re changing the way an entire industry gets paid,” Markell said.

Related: For more on the promise and perils of Obamacare’s embrace of new funding models, see our recent webinar here.