New Marketplace
Getting Out of the Health Care Graveyard (09:37)

Have you visited the health care graveyard? It’s where good intentions and innovations go to die, according to Bob Galvin, Chief Executive Officer for Equity Healthcare. He points out tombstones such as health maintenance organizations and comparative effectiveness.

“We know that good ideas in health care don’t always work,” says Galvin. “A lot is happening in payment reform, and the basic mantra is, how do we move from paying for volume — fee-for-service —  to value, and how do we make that idea happen and keep it out of that graveyard?”

Health care loves great new ideas but isn’t known for executing them. “We don’t as much like to do the painful operational work of going ready, aim, fire,” says Galvin. “Where we are today so far is doing a lot of work, but I think we’re missing the bullseye.” Early evidence about savings from payment reform is weak, and clinician satisfaction is low.

Galvin asks payers to fix two fundamental flaws, the first of which is lack of simplicity. He describes the elevator pitch in its early days, and how in 1990 he worked with Jack Welch, who would ask employees to explain their big idea for the next year and how they were going to accomplish it — while traveling with him in an elevator, in a building only three floors high. “We got very good at speaking concisely,” says Galvin. He quotes Albert Einstein: “If you can’t explain it simply, you don’t understand it well enough,” adding, “if you don’t understand it, you can’t really accomplish it.”

“Imagine a clinician getting on an elevator with a payer. I’ll give you 30 floors. And the clinician says to the payer, ‘What’s all this payment reform stuff? Tell me what’s going on.’” Galvin asks how many acronyms the clinician would glaze over — ACOs, PCMHs, MIPS, MACRA, APMs, PQRS, etc. “I don’t believe there’s face validity to thinking that you’re going to have successful payment reform if the clinician who is at the bedside with the patient [doesn’t think] all this payment reform stuff is understandable, is going to create more time for him or her with the patient, and is going to help their professionalism.”

So what can payers do? They can commit to simplicity, and stop the arms race toward arrangements they’ve made and practices they’ve penetrated.  Galvin suggests the Six Sigma outside-in approach to customers or stakeholders: before payers go to a practice or system and talk about their payment reform scheme, they should ask what the organization is already doing, what reforms they’ve already implemented, and then retrofit the payer’s scheme if it will fit — or simply not institute it if it won’t.

“That is what we can hope for,” says Galvin. He was involved in the quality measurement movement for a couple of decades and says they “made a mess out of it,” wanting to start with a small number of measures and ending up with thousands. He doesn’t want payment reform to make the same mistake.

The second flaw Galvin wants payers to fix is more important: how we value physician or clinician services. “Any system that is going to pay twice as much for a clinician to take off two moles than it does for another clinician to take care of a really sick patient is kidding itself if it thinks it’s going to get to a value-based system,” says Galvin. Payers frequently tell him that’s fee-for-service, and not to worry because they’re moving away from fee-for-service — that “fee-for-service is dead.”

“I would say on behalf of fee-for-service that the reports of its death have been greatly exaggerated for two reasons,” says Galvin:

  • The majority of payment reforms over the next 5 years will be fee-for-service based, and 5 years in health care equals is $15 or $20 trillion, according to Galvin.
  • “The fee see schedule that I talked about with those valuations is still at the basis of the advanced payment reforms.” A group might get capitated, or get a bundled payment, but when it trickles down to individual clinicians it still uses those valuations.

“A system that uses that as its valuations is in trouble,” says Galvin. So what can we do? Without going into the sausage-making of payment, Galvin explains briefly that the American Medical Association sponsors a committee called the RUC [Specialty Society Relative Value Scale Update Committee], which surveys doctors, reports its findings to the Centers for Medicare and Medicaid (CMS), and CMS takes its recommendations. Despite the fact that 23 minutes is still given for the removal of a mole when it only now takes 3 minutes, despite MedPAC recommending something more quantitative, and despite the Affordable Care Act including quantitative language, we haven’t done anything to change it, says Galvin.

“Payers, please lead the effort, and we [the employers] will join you in trying to put resources into trying to rebalance these valuations,” says Galvin.

Strategic planning at Galvin’s company comes in the form of “writing the history of the future,” where senior staff write two histories: one where everything goes well over the next 10 years, and the decisions that were made to achieve that success, and one where everything goes terribly, and what decisions led to that failure. “Why I do that is for two reasons,” says Galvin. “The decisions we make today matter, and we have free will — we don’t have to make the wrong decisions.”

“So my elevator speech to payers is: commit to simplicity, adopt outside-in, and please help us rebalance the RUC.”

From the NEJM Catalyst event Navigating Payment Reform for Providers, Payers, and Pharma, held at Harvard Business School, November 2, 2017.

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