Preparing for the Changing Payment Models

Preparing for the Changing Payment Models

Currently, the majority of pediatricians get paid per code for the work we do–if we do more, we get paid more. Unfortunately, getting paid for piece work has been the big item on the healthcare economist’s chopping block. There is much talk (and some action) in certain areas of the country about changing payment models to focus on payments for managing a group of patients well.

While many providers still question the long-term viability of Accountable Care Organizations, and some of us are struggling to figure out what ACOs actually look like in the real world, smart pediatricians are beginning to ask themselves what we need to do to survive. The cost of medical care in pediatrics in context to overall spending is often affectionately termed “budget dust.” Pediatricians simply don’t spend the majority of the healthcare dollar; the bulk of it is spent on adult chronic disease and end of life care. While payers and large health systems talk about strategies to reduce costs, we can’t even get the attention of the policy makers and payers. So what is a pediatrician to do?

I would argue that we should focus on what we already do well. Give great care, focus on prevention, consider the patient in the context of a medical home, and manage our patients proactively.

Providing great care benefits everyone. Demonstrating high quality care makes a difference to our patients, to payers, and our society. In order achieve the highest quality of care, practices must have the ability to measure how well we are doing, and establish a mindset of continuous improvement. There is a “Lake Wobegon Effect” that many of us have–believing we are above average in the quality department. To make sure you are, use real data and measure how well you are doing. Realize there is always room for improvement, then work towards it. Use your data to get the attention of your payers and improve your payments. Even small practices have more leverage then you think when you couple it with data.

Focusing on prevention often doesn’t get much attention, but it’s the backbone of pediatric medicine. When we talk to payers about the return on investment for promoting wellness and preventing illness, we often don’t get much traction because it takes years before we can measure results. However, many payers are starting to understand that practices who manage their panel of patients well will ultimately save overall healthcare costs. As we migrate to a payment model that looks at the total cost of care, and we can keep our patients healthy and identify problems early, we will be able to demonstrate reduced long-term costs that benefit our practices and our patients.

The medical home concept was the brainchild of the pediatricians! We instinctively know that providing family-centered, coordinated care is the best way to improve care and reduce costs. Keeping patients out of the emergency department and in our offices, and knowing a family well enough to give appropriate advice via phone or messaging is good care. Eliminating the expense of an office visit when appropriate, or avoiding expensive laboratory testing when unnecessary, is cost-effective care. Using our office staff to help coordinate care and creating a true medical home is high quality and cost-effective care. Practices that embrace this mindset will be well-poised to transition to alternative payment models.

Proactively managing patient populations is the key to transitioning to a model where payment comes from managing a group of patients, not the services provided. Emerging payment trends will reward practices that identify and understand the composition and needs of their patient panel, and manage their care with high quality and cost-efficiency. Don’t wait for your patients to call you for an appointment or request a referral. Identify who is coming due for care and proactively reach out to them. Know who your “superutilizers” are. In most analyses of patient groups, 20% of the patients consume 80% of the resources. Work with those families and care coordinators to minimize unnecessary services and improve quality.

If any group can really influence the future of societal healthcare costs, it’s pediatricians. Those of us who are thinking ahead will remain nimble and can benefit from any changes in healthcare financing. Are you up to the challenge?