Health Care Service-Delivery Reform

The US Health care system often lags behind top-performing countries in research comparing measures like cost, equity, accessibility, and health outcomes. Cost is an issue for federal and state governments, and employers as well. Workforce shortages add to the nation’s health care delivery challenges (see also Health Care Workforce). 

Addressing the challenges of the health care system continues to take on many facets, including how individuals access services, how providers are paid for services, and how success is measured.

One significant investment in health care delivery reform at the federal level is the Center for Medicare & Medicaid Innovation (CMMI), also known as the Innovation Center. CMMI has been testing payment and service-delivery models designed to control spending, improve the quality of care, or both. These models seek to transform how health care is delivered to make care better coordinated and more person-centered. In 2021, a strategy refresh added the goal of improving health equity.

The National Quality Strategy (NQS), established as part of the Affordable Care Act, serves as a catalyst for a nationwide focus on quality improvement efforts and approaches to measuring quality. The NQS has three goals: better care, healthier people and communities, and lower-cost care. In order to achieve these goals, all care should be person-centered. Individuals (and caregivers, if appropriate) need to be full partners in all discussions and decisions related to care. This individualized care encompasses compassion, empathy, and responsiveness to the individual’s expressed preferences.

Primary care: Primary care is usually the entry point to the health care system.

Practitioners triage and address new conditions and needs, encourage and initiate preventive health activities, and coordinate with other parts of the system. Research suggests that health care systems with solid primary care foundations have better quality, lower costs, better population health, and fewer health disparities.

Growing shortages in the primary care workforce and the wide gap between payment for primary care and that for specialist services are concerns. Approximately 74 million Americans live in officially designated primary care health professional shortage areas. Experts observe that the income disparity between primary care physicians and specialists discourages medical school graduates from choosing primary care careers.

Team-based care: Patients also benefit from well-coordinated care managed by a team of professionals with the necessary skills to serve patients’ needs. The numerous demands, range of needed skills, and expectations of primary care suggest that primary care is best provided by a team whose members consult and coordinate with one another, as well as with the patient (and any caregivers, if appropriate) and with the patient’s specialist clinicians, as appropriate. Professional team members practice to the full extent of their licenses and provide services with a clear definition and understanding of roles and responsibilities.

People with multiple chronic conditions, in particular, can benefit from treatment by health professionals from a variety of disciplines. The team’s composition may vary according to patient needs. Customarily it includes physicians, Advanced Practice Registered Nurses, social workers, pharmacists, nutritionists, family caregivers, and home and community-based service providers.

Value-based purchasing (VBP) and value-based benefit design: VBP advances the idea that payers should hold providers of health care accountable for the cost and quality of care, that is, the “value” of care they provide. A growing practice among large purchasers and employer coalitions is to link payment to the performance of health plans, health care systems, providers, and clinicians to improve their clinical and service performance, as opposed to simply paying a set amount for each service or visit. Such “pay-for-performance” systems can take many forms, including paying a fixed fee to a provider to provide certain services to the patient or to care for a patient with certain health conditions during a specified period of time, or tying a portion of payment to achieving certain levels on quality measures. These initiatives are intended to reward enhanced quality of care, greater efficiency, or lower costs. However, different approaches can lead to different provider behavior and patient experience, including negative unintended consequences. Although improvements in quality can reduce costs, cost alone is not a measure of quality. (see also section on Value-Based Purchasing in Medicare).

Employers: Providing employees with information about comparative cost and quality information and can encourage them to use this information in choosing quality health plans that best meet their needs. This can, in turn, lower costs for employers and other employees by keeping healthcare spending lower.

Commercial health plans and public payers: Financial incentives used at the payer level include risk-based payments, and other means of allowing providers or other responsible entities to share in any money saved through their efforts. For example, the federal government and states often pay managed care plans using capitated payments, i.e., set amount for each enrollee. The goal of the arrangement is to give the plan a financial incentive to find ways to help enrollees stay has healthy as possible. Preventing use of more costly services, such as hospitals and emergency care, helps the health plan control its costs.

Provider incentives: Provider incentives often take the form of increased or reduced payment. For example, providers who demonstrate better health outcomes for patients, including decreased use of avoidable or unnecessary services, may receive bonus payments. Providers who perform poorly may be subject to penalties, such as the denial of payment increases.

Consumer incentives: Individual consumers can also play a role in promoting better care and making the best use of health care resources. Generally, incentives aimed at consumers are intended to make consumers more value- and cost-conscious in their health care choices. Some purchasers or payers offer incentives to encourage beneficiaries to use particular services (e.g., evidence-based preventive or screening services), or go to physicians and hospitals that achieve higher-quality results or are lower cost. For example, covering high-value services, such as preventive care or screenings at low or no cost to the consumer may encourage them to use these services.

Reference pricing: Reference pricing is a mechanism used by a health plan, employer, or payer to set a maximum payment (i.e., the “reference price” or “approved payment rate”) for a specific drug, procedure, or service. For this approach to work effectively and fairly, the payment limit should be set at a level that ensures a sufficient number of providers are available for beneficiaries to choose from. With this approach, consumers may choose other providers, but at a higher out-of-pocket cost if they select one that charges more than the reference price. Large, self-insured employers often have information from claims data about how service costs vary. They also can measure the quality outcomes of specific services. If made available to consumers, this information on quality and cost can help consumers make informed decisions about where to seek care.

All-payer claims databases: These databases are intended to collect health care claims data from public and private payors, including private insurance, Medicare, Medicaid, and all types of health care claims, including medical, facility, dental, and pharmacy. These databases can play a vital role in promoting cost transparency, quality care, and payment reform, by providing comparisons across payors. However, the U.S. Supreme Court’s Gobeille v. Liberty decision limited states’ ability to require reporting from self-funded employer-sponsored health plans directly. Employer-sponsored plan participation has remained low, reducing the effectiveness of all-payer claims databases (APCDs) in achieving initial goals. APCDs typically also do not include claims from federal health programs such as Veteran’s Health Affairs, the Federal Employees Health Benefits program, and Indian Health Services.