New Payment System Already Working in Western New York

 By Michael W. Cropp, M.D.

Last week’s announcement by the Obama administration that it plans to overhaul the way Medicare pays hospitals and doctors – rewarding quality rather than volume of services provided – is good news for U.S. health care consumers and the nation’s $2.9 trillion health care system. The goal is for half of all Medicare payments to be handled this way by 2018.

A broad cross-section of key stakeholders in the health care system, including hospitals, doctors, health plans and employers, quickly stepped forward to voice their support.

Not surprisingly, the health care system here in Western New York is way ahead of the curve.

In June 2013, Independent Health’s chief medical officer, Dr. Thomas Foels, was invited to provide testimony at a hearing of the U.S. House of Representatives’ Subcommittee on Health to discuss reforms to the Medicare provider payment system. He was able to illustrate how Independent Health has been partnering with local physicians to initiate quality-based payment incentive programs dating back to 2000.

This long and successful history of collaboration with the region’s physician community resulted in the introduction of the Primary Connection in 2012, a pioneering group that now represents 30 primary care practices and nearly 200 internal medicine, family practice and pediatric physicians.

Our community can take pride in the outcomes to date – from reducing potentially avoidable hospital admissions by 25 percent since 2013 to avoiding $4.7 million in unnecessary readmission costs and decreasing the usage of brand-name drugs by 23 percent since 2012, which translate into lower cost trends for our customers. At the same time we have seen improvements in the coordination of care among primary care physicians and specialists, resulting in enhanced quality and patient outcomes.

We believe there are valuable components of this program here in Western New York potentially scalable and transferable to other communities beyond our own. In addition, we have identified and shared a set of critical success factors based on our experiences that can help guide innovation on a national level.

The old fee-for-service or open-ended reimbursement system has been a major contributor to rising costs. Despite spending more on health care than any other nation, the United States still ranks near the bottom in quality compared with other industrialized nations.

Implementing a payment system that rewards quality outcomes, encouraging patient-centered medical care and adhering to evidence-based medicine, will help achieve the Triple Aim of better health, better care and lower costs, and ensure a more sustainable health system for generations to come.


Michael W. Cropp, M.D., is president and CEO of Independent Health in Buffalo, New York. This column originally appeared in The Buffalo News.