Payment reform: A sustainable solution to solving the health care cost crisis

Patricia Smith and Michael W. Cropp, M.D.

October 1, 2013, was a significant day in our nation’s health care history; it marked the start of health insurance exchanges across the country and symbolized the commencement of one of the most significant provisions in the Affordable Care Act (ACA), signed into law in March 2010.

Although technical problems have initially hampered the enrollment process in these online exchanges, once corrected, millions of uninsured and underinsured Americans will have the unprecedented opportunity to shop for more affordable, quality health coverage.

While the ACA was designed to expand access to health coverage, it did not offer a prescriptive solution to solving the unsustainable trend of rising health costs. These solutions will come from local efforts to transform the delivery of quality care and lower costs.

A case in point is the success of many community-based health plans in changing the antiquated way we pay physicians. It is clear that the current physician payment system is not adequate to meet the intertwined goals of affordability and improved quality. Members of Congress from both sides of the aisle agree, and are working on alternative approaches to physician reimbursement under Medicare that focuses more on quality outcomes rather than volume of services provided.

A recent Alliance of Community Health Plans (ACHP) report, “Moving Beyond Fee-for-Service: A Path to Payment Reform from Community Health Plans,” features seven ACHP member plans who have changed the way they pay many of their physicians. While they have taken different approaches, they have in common a focus on primary care, recognition of the importance of linking payment to meaningful quality measures, and involving physicians in the design and implementation of new models.

Independent Health, a Buffalo, N.Y.-based health plan, was one of the plans featured in the report. They have forged a successful alliance with nearly 200 primary care physicians called The Primary Connection, which uses a shared savings model that promotes efficient, effective care delivery.

Independent Health provides each practice with data to help physicians identify opportunities for improvement and work toward better results and value for their patients. This effort is helping physicians create patient-centered practices that are improving access to health care, as measured by the ease and timeliness with which patients obtain medical services – a key indicator of quality of care. The goal is to provide the right care, at the right time, in the right setting.

The Primary Connection is also a pathway to more effective interactions with specialists, more consistent quality in terms of preventive services and better use of hospitals and other facilities in the health care system. This collaboration is addressing avoidable hospital admissions and readmissions, reducing duplicative services and testing, prescribing generic medications where appropriate, and enhancing care communication between referring primary care physicians and specialists.

Empowering primary care physicians to expand their influence in patient care not only improves the delivery and coordination of care, but also results in greater professional fulfillment and satisfaction. As an industry, we must recognize this and invest in the revitalization and growth of primary care.

Real health reform has to include a focus on better care, lowering costs and improving quality – more coverage alone is not enough. ACHP member plans are leading the way in implementing patient-centered approaches to paying primary care physicians, which will lead to improved quality and increased affordability. The future of our health care system depends on this mindset reaching markets across the country.

Patricia Smith is president and CEO of the Alliance of Community Health Plans (ACHP). Michael W. Cropp, M.D., is president and CEO of Independent Health in Buffalo, N.Y., the chair of the ACHP board of directors and a board-certified family physician. The ACHP report, “Moving Beyond Fee-For-Service: A Path to Payment Reform from Community Health Plans” can be found at

This blog was originally printed in Healthcare Lighthouse on October 29, 2013.

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