An August 14 meta-analysis[1] of payment reform evaluations by Len Nichols and others offers health care investors a sobering appraisal of the success to-date of a range of payment reforms initiated by the Centers for Medicare & Medicaid Services and Congress—accountable care organizations, patient-centered medical homes, and bundled payments in particular. Investors should take the approach of “caveat emptor” when listening to pitches claiming that a technological, data, or telephonic solution du jour will lower costs, improve outcomes, and produce amazing growth in EBITDA.

Dr. Nichols et al., however, do offer a lodestar for an investor seeking an answer to “what works?” They observe that “(w)hile economic incentive and useful information can be supplied quickly, changing the essential relationships to achieve cost-effective care takes more time … all move at the speed of trust” between “parties” in the health care system. These “parties” include the referring primary care physicians, cost-aware specialists, health plans, and patients and their families.

As the Chairman of a professional services firm, that observation does not come as a shock—however, it is a useful reminder that professionals spend years developing trust in the other professionals to whom they refer their clients. Lawyers take years to trust that another legal specialist or a consultant can provide their clients with the right blend of insight, service, and cost-effectiveness. I, therefore, am not surprised to be reminded by Dr. Nichols et al. that undergirding the new payment systems are complex incentives beyond the opportunity for a shared savings bonus.

Investors will thus want to understand if there are unique human factors that drive the cost-savings achievements claimed to be associated with a new technology or data solution. Our firm has assisted health providers and purchasers with the implementation of new financial incentive systems and care coordination models for almost 50 years. We, therefore, have a healthy appreciation for how much of care management success is actually attributable to the basic “blocking and tackling” of professional service interactions. I thank Dr. Nichols et al. for the friendly reminder of the vital role that these trust relationships will continue to play in attaining health payment reform’s goals.

* * *

For additional information about the issues discussed above, please contactthe Epstein Becker Green attorney or EBG Advisors consultant whoregularly assists you, or the author of this advisory:

Mark Lutes
Washington, DC
202-861-1824
mlutes@ebglaw.com


ENDNOTE

[1]  L. Nichols, A. Cuellar, L. Helmchen, G. Gimm & J. Want, “What Should We Conclude From ‘Mixed’ Results In Payment Reform Evaluations?” Health Affairs Blog (Aug. 14, 2017), available at http://healthaffairs.org/blog/2017/08/14/what-should-we-conclude-from-mixed-results-in-payment-reform-evaluations/.

Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.