TRANSFORMING HEALTHCARE:RECOMMENDATIONS FORPAYMENT REFORM
February 8, 2011
Edited by:Julia M Eckstein, MBA
VP, State Policy DirectorCenter for Health Transformation
Rita Numerof, PhD
CEONumerof & Associates, Inc
TABLE OF CONTENTS
Introduction................................................................................................1I. Background and Context...........................................................................2
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Understanding Healthcare Reform as Business Model Change...3
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The Central Role of Payment Reform............................................5
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Unintended Consequences – The Hospital Example....................5
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Unintended Consequences – The Primary Care Example............7
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Healthcare is Bigger Business.......................................................9
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The Perversion of the Concept of “Insurance”.............................12
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The Perversion of IT....................................................................13
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Creating a Competitive, Functioning Market................................14
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There is Already Enough Money In the System..........................17
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There is a Solution, and it’s Closer Than Some Think.................18II. Vision For The Future..............................................................................20
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CHT Principles – Requirements for a Payment Reform Solution20
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Creating the Future: A Look Ahead to 2020................................25III. Specific Strategy Recommendations.......................................................29
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CHT’s Plan Framework – MOST Hierarchy.................................29
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CHT Payment Reform Mission....................................................30
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Overarching Payment Reform Objectives...................................30
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Practical – and Integrated Core Strategies to Achieve WhatWe Need......................................................................................31IV. Bridges to Get There...............................................................................38V. Conclusion ..............................................................................................56Appendix A: References..........................................................................57Appendix B: Participants……………………………………………………..63
1.0: Background and Context
1
INTRODUCTION
The Center for Health Transformation extended an invitation to itsmembers to participate in a work group to develop tripartisan solutions towhat we felt was a key driver in creating a system that delivers betterhealth at lower cost.Nearly forty of our members, representing very diverse stakeholders in thehealthcare system accepted that offer, an offer to invest their time, energyand creativity to create real change, change that might have a profoundimpact on their organizations.We convened the work group for our first meeting held in Washington, DC.We engaged Rita Numerof, PhD, CEO of Numerof & Associates, Inc. towork with Julie Eckstein, VP Center for Health Transformation (CHT) tolead this ambitious body of work.The initial meeting set the stage for the work with opening comments fromFormer U.S. Speaker of the U.S. House of Representatives NewtGingrich, founder of CHT, who gave the call to action. He shared hisexperience that very often in the legislative process, elected officials haveheard the problems loud and clear from constituents or interest groups,but they have not been offered, nor created themselves, the solutions forthose problems. It is this vacuum that the work group must fill; thisabsence of a solution or set of solutions that must be developed. Thegroup accepted that challenge.After being presented with a vision of a new reality that represented an“ideal world,” albeit without total agreement, the group spent timediscussing that vision and the barriers that exist to prevent it frombecoming reality. The outcome of those very rich, thoughtful andsomewhat intense conversations and debates fell into six themes for thework ahead. Those themes laid the ground work for a set of six strategiesthat later emerged.At the second formal gathering of the group, Former U.S. Senate MajorityLeader Tom Daschle opened the meeting by sharing his view of thecurrent reality and his vision of what reform could accomplish and neededto accomplish. His remarks and the ensuing dialogue were refreshinglysimilar to the comments from Speaker Gingrich. There seemed to beamazing agreement on the challenges and areas in which the solutionswould be found. We must note that each participant may not agree witheach of the recommendations in this document. That is to be expectedwith such a complex challenge.
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