Power Breakfast panel debates health care reform

October 17, 2009


What would it take for the fundamental financial incentives of the health care system to change, to shift from paying doctors a fee for every service they perform to paying them for spending time with patients and achieving good health outcomes?

KRAJNOVICH: Doctors should be paid and paid well. It is important to create the kind of mechanisms so that doctors are [motivated] to perform at even higher levels. Here locally the Indiana Health Information Exchange and Quality Health First [are] working to create score cards to provide to physicians so that they understand how they’re treating their patients, how they compare against their peer groups, so that they can continually treat their patients better and better and understand how again they’re performing in the marketplace. The work that the Quality Health First and IHIE do is fabulous work.

The alignment of incentives is important. It gets the hospitals and the physicians and others on the same page, focusing not on how the reimbursement works necessarily but rather how are we going to manage the care of this patient. With bundled payments you can create an incentive for really coming together and taking away some of those barriers and, in all honesty, some conflicting incentives in terms of how care is delivered today.

From St. Vincent’s perspective, we have been and are preparing for that kind of reimbursement change in the market. There are some things that you have to have in place: the aligned incentives, you have to have an IT infrastructure, electronic health record—that’s critically important to be able to manage in that kind of environment—and, as earlier stated, the primary care access and early intervention for prevention and wellness is very, very important.

BRATER: Well, I think what you’re referring to is if you imagined in contrast to what we’re doing today is if you had a fully capitated model [where doctors are paid per patient, not per procedure] is basically what we’re talking about if you take it to the extreme and that would affect all of us because all of our business models are based on what we’re doing today, so we’d have to fundamentally change and we’re not prudent if we don’t start thinking about that.

The way the medical school works is we cross-subsidize education and research with revenues that we generate clinically. And in the current business model, we generate those revenues by doing stuff, just like everybody else. So we have to think about if we went to a fully capitated model, then how would we have the resources to shift over to education and research to do those things the way they need to be done in a quality way?

I would go so far as to say, if it’s done in a fashion where academic health centers cannot cross-subsidize education and research, then we’re going to have some big problems—not just at the IU School of Medicine but in academic medicine in general. You’ll see some of these research engines grind to a stop. So you have to be really careful about it. Maybe I’m not smart enough, but it’s very hard for me to see systems get away from rewarding for doing a lot of things. The simplest way to have a compensation model or a reimbursement model that gets away from that, as far as I can tell, is really going into the capitation end of the world. Parenthetically, you could get rid of a hell of a lot of administrative expenses if you did that.

EVANS: The answer I think, dovetailing into what Craig and Kyle specifically said, is we should be [motivated] to keep people out of the hospital. We shouldn’t be [encouraged] to treat people in the hospital. Right now, the money all goes to acute critical care, it doesn’t go to the clinics. So to answer the question that we’ve got to be paid to keep people out, not paid to keep people in, that is a paradigm shift. That means you’d all have to agree to less choice. You’re the ones who call me and want to work around the primary care docs, right? Right? I’ll bet I get 10 calls a week from somebody in this room trying to figure out a way to go see one of the subspecialists at one of the IU Medical Group or Methodist Medical Group. Because that’s what you do when you’re frustrated, right? You do a work-around.

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