State officials and representatives from the health care and insurance industries are developing a plan to redesign how health care is delivered and paid for in the state, an initiative aimed at affecting the vast majority of Connecticut residents.

The goal is to improve the quality of health care by changing the way private insurers and public programs like Medicare pay for it. Rather than paying separately for every service provided, as happens now, the system planners envision would reward health care providers for coordinating care, reducing unnecessary hospitalizations, and other things that can improve outcomes but aren’t typically paid for today. It could also reward them for reducing patient costs — a concept that’s drawn intense opposition from consumer advocates.

“I think people are coming to the realization, maybe not everybody agrees, that fundamentally, we should be paying people for quality care,” said state Healthcare Advocate Victoria Veltri, who is leading the planning process. “We’re spending money on health care, and are we spending it to get quality care and good outcomes, or are we just spending it because there’s a system set up that allows us to spend it?”

But advocates have raised concerns, saying consumers have been shut out of the planning process and warning that the payment model the planners seem to favor could hurt patients by giving doctors a financial incentive to offer less care.

Getting everyone on the same page

There’s general agreement the health care system needs to change. Those involved in the planning process, and critics of it, note that fast-growing health care costs aren’t matched by outcomes. Care is often not coordinated, and that can lead to duplicated tests, unnecessary treatment, or patients falling through the cracks. The way providers gets paid rewards them for providing more services, whether they improve patients’ health or not.

But exactly how change all that is controversial, particularly when it comes to efforts to lower health care spending.

Those working on the new model are seeking $50 million from the federal government, part of a grant program created by the federal health reform law. Health care providers and insurance companies wouldn’t have to participate in any new model that comes from the process, but those planning it hope the new system will be adopted widely.

Veltri noted that there are currently multiple initiatives aimed at improving health care quality and containing costs, involving Medicaid, Medicare and private insurers. But each one is different, meaning that doctors might have three different kinds of expectations to meet for various programs, with multiple ways of getting paid.

One hope is that the new model, known as the State Innovation Model, or SIM, could get most or all of the payers to use the same measures and incentives.

Frances Padilla, president of the Universal Health Care Foundation of Connecticut and a member of the planning team, said improving care quality and controlling costs is key to ensuring that the expansion of health insurance coverage under federal health reform is sustainable.

But Padilla said it’s important to avoid driving down costs by steering people to lower-quality care or creating cheap but inadequate insurance.

“It’s not just about reducing costs. It’s what’s most cost-effective, what gets you the best outcomes,” she said.

Should doctors get paid for saving money?

But some advocates are concerned about what will emerge from the effort to redesign the state’s health care system.

They say the planning process hasn’t had enough consumer input and hasn’t been transparent. The planning team includes representatives from state agencies, as well as from insurance companies, health care providers, the state’s health insurance exchange, foundations and private companies.

And advocates are concerned that the new system the planners are devising could give doctors and other health care providers a financial stake in lowering costs, something they say could hurt patients. It could be structured in a variety of ways, giving providers a share of any savings generated, penalizing them if they don’t reduce costs, or giving them a set amount of money for patient care and letting them keep what isn’t spent.

A draft document used in the planning process indicated that the SIM planning group was considering such a model. It indicated that, over five years, the vast majority of patients in Connecticut would be seen by providers paid through a “total cost of care” model, in which a portion of their payments were tied to meeting overall cost and quality measures.

Veltri and others on the planning team say the group hasn’t settled on a payment model.

Regardless, Veltri said, providers will only get rewarded if they meet certain quality targets.

“They’re not going to get paid just to save money,” she said.

But Veltri also said she believes providers must be made accountable for cost. A patient can turn out to be fine if he has five MRIs, she said, even if four turn out to be unnecessary.

“There are ways in which quality can be secured that still do not promote the best way of delivering care,” Veltri said. “So I think having the providers have to be accountable for providing the right care at the right time, the right place, it adds a layer of accountability. It is all in the design.”

Charge: Model could hurt patient care

But critics fear that holding doctors accountable for reducing health care costs could hurt patients.

Sheldon Toubman, an attorney with the New Haven Legal Assistance Association, said tying doctors’ pay to their ability to reduce costs could lead primary care doctors “to have a massive thumb on the scale.”

Proponents say it’s possible to ensure that doctors aren’t cutting corners to save money by tracking care quality indicators, but Toubman said there are subtle ways to trim patient care and costs that wouldn’t be caught. A doctor could recommend that a patient get fewer hours of home care than necessary, or prescribe a lower-cost drug that has side effects.

“You can think of hundreds of scenarios under which there are ways for providers to make more money for themselves, by reducing the total cost of care in ways that are not in consumers’ interest and you’ll never be able to catch them all,” Toubman said.

The model the SIM planners have considered, Toubman said, is an “extremely blunt instrument of assuming that if the doctors are saving money on their patients, therefore they’re doing better.”

Ellen Andrews, executive director of the Connecticut Health Policy Project, said some advocates are worried that things could get worse for Medicaid patients, who already struggle to find doctors to treat them.

“But things are pretty bad for everybody else, and we have to reduce costs,” she added.

How to measure quality?

In a letter to Lt. Gov. Nancy Wyman, who chairs the planning committee, Andrews and 21 other advocates also raised concerns that the state doesn’t have an adequate system for monitoring care quality. Providers, they wrote, don’t have the tools needed to reduce overtreatment and make other changes necessary to improve care.

“Connecticut has no ability to identify when savings are generated by withholding appropriate care as opposed to the intended reductions in unnecessary care and duplication of services,” they wrote.

They requested that any new model first develop a monitoring system that identifies quality performance and under-treatment, and lets individual providers know how they’re doing. Only after that, they added, should any payment incentives be attached to quality measures. And they wrote that health care providers that don’t meet the quality standards should be ineligible for any financial rewards.

Toubman suggested that any new model be based on the state’s person-centered medical home program, a model in use for Medicaid patients that pays health care providers to coordinate patient care in addition to their usual fees for services provided. Providers in the program are eligible for additional payments if they meet quality targets. There are no financial consequences for providers related to the cost of care.

Toubman said that makes the doctor an “honest broker.” Giving doctors a stake in cost-savings, he said, would ruin that.

But Veltri said that doesn’t give health care providers enough credit.

“I think it’s a simplistic formulation to suggest that automatically having a reward for cost-savings will lead providers to go down the road of not providing quality care or not giving care, because there are consequences to providers for not providing quality care,” she said.  Doctors who withhold care to get a financial reward probably aren’t going to practice with quality in mind under the current system, she added.

And Veltri said criticisms of the new model don’t properly account for flaws of the existing health care system, which she said can also lead to care denials.

Providers who participate in whatever emerges from the SIM process will have to meet quality standards, she said, adding that not everyone is expected to be ready immediately. And she said those involved don’t see the model as ultimately about money.

“It really is about the quality of care,” she said. “I think most of us believe that if we have a system that is really about the quality of care we deliver as opposed to the quantity, that there will be savings.”

The planning team’s next meeting is at 2:30 p.m., Tuesday, Sept. 17, in the state Capitol, room 410. The grant application is due to the federal government Nov. 30.

Draft SIM Report

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Arielle Levin Becker covered health care for The Connecticut Mirror. She previously worked for The Hartford Courant, most recently as its health reporter, and has also covered small towns, courts and education in Connecticut and New Jersey. She was a finalist in 2009 for the prestigious Livingston Award for Young Journalists, a recipient of a Knight Science Journalism Fellowship and the third-place winner in 2013 for an in-depth piece on caregivers from the National Association of Health Journalists. She is a 2004 graduate of Yale University.

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