Calif. Health Groups Join Pledge To Move to Value-Based Agreements

On Wednesday, a group of some of the largest health care systems and insurers -- including two from California -- announced a commitment to transition from fee-for-service payments to value-based agreements by 2020, the New York Times reports (Abelson, New York Times, 1/28).

Background

The announcement comes just days after HHS Secretary Sylvia Mathews Burwell announced ambitious goals for reforming Medicare payments for hospitals and physicians that would make 30% of payments through alternate payment models like accountable care organizations and bundled payments by 2016.

Along with the alternative payment models goal for 2016, Burwell also wrote that HHS will seek to have 50% of Medicare payments through alternate payment models by the end of 2018.

Further, she wrote that HHS will seek to have 85% of Medicare hospital fee-for-service payments tied to quality or value -- through programs such as the Hospital Value-Based Purchasing Program or the Hospital Readmissions Reduction Program -- by the end of 2016. That percentage would increase to 90% by the end of 2018 (California Healthline, 1/27).

Details of the Coalition

The private coalition, known as the Health Care Transformation Task Force, was proposed by Richard Gilfillan, CEO of Trinity Health and the former head of the Center for Medicare and Medicaid Innovation. It aims to reach a consensus on the most-effective payment models for hospitals, private insurers, and federal payers to eliminate the need for multiple arrangements for each private payer and Medicare (New York Times, 1/28).

The task force has 28 members so far. Sixteen of the participants are provider organizations, including: 

• Advocate Health Care;
• Ascension;
• Dignity Health;
• OSF Healthcare;
• Partners Healthcare; and
• Trinity Health.

The four insurers participating in the task force are:

• Aetna;
• Blue Cross Blue Shield of Massachusetts;
• Blue Shield of California; and
• Health Care Service Corporation (Rappleye, Becker's Hospital CFO, 1/28).

The coalition says it is committed to moving 75% of its contracts into alternate payment models by 2020.

According to the announcement, the task force will attempt to create contracts that "successfully incentivize and hold providers accountable for the total cost, patient experience, and quality of care for a population of patients, either across an entire population over the course of a year or during a defined episode that spans multiple sites of care" (Evans, Modern Healthcare, 1/28).