New Marketplace
Much Ado About Nothing Over Payment Reform? (05:00)

In their talks during the NEJM Catalyst event “Navigating Payment Reform for Providers, Payers, and Pharma,” both Michael McWilliams and Griffin Myers state that a certain amount of necessary payment reform might just happen on its own if we let things play out.

“Is our concern with payment reform maybe a bit of a much ado about nothing?” asks Robert Huckman during the event’s second panel discussion. “Should we let the system play its course? Or do we need to just give maybe more subtle nudges than we’re doing?”

“I believe that we’re doing too much in payment reform,” answers McWilliams. “There are too many horses out there, and we can’t have a horse race because they’re all knocking into each other.” He references the debate over bundling versus global payment as an example.

“We need to be careful about what we mean by payment reform and let a model run its course for a while to see where that takes us,” he says. “I tend to think that the global budget model, with a primary care–based risk-bearing entity, is the horse to ride and see where it takes us for a while.”

That said, the presence of disturbing trends like rapid consolidation — will any independent, risk-bearing primary care groups be left? — means that the system could use some help. “Getting the market structure right so that these payment models can really work as they should, that’s the key,” says McWilliams. He suggests the implementation of complementary policies, along with site-neutral payments and/or reforming the 340B Drug Discount Program — and reforming financial incentives that underlie the impetus for consolidation.

Myers answers Huckman’s questions from a different perspective — as someone who builds care teams rather than recommends policies. “You can’t expect policymakers to create policies for groups like Oak Street Health,” he says. “There are 60 million Medicare-eligibles; we take care of 30,000-something folks.” According to Myers, no public policy change of the past 20 years has affected Oak Street Health, with the exception of Medicare Advantage and dual integration programs.

“We’re just going to keep working along, we’re going to try to take care of as many people as we can, and do the best job we can,” Myers says. He explains that Oak Street does not make money by cutting out waste and spends the same on Medicare Part B that any other group would — but spends it differently, with savings gained from Part A. “That for us is the ultimate quality metric: people staying out of the hospital,” he says. “That’s the quality metric that happens to pay for what we do.”

He recommends that policymakers help where the majority are struggling and says he’s fine with “anything that improves the application of evidence-based, equitable, accountable care.”

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

More From New Marketplace
Shachar01_pullquote value-based care fee-for-service fraud and abuse laws

Are Fraud and Abuse Laws Stifling Value-Based Care?

To realize the true potential of value-based care, we must update the underlying assumptions in our fraud and abuse regulatory system.

Porter02_SBUs and IPUs pullquote1

What 21st Century Health Care Should Learn from 20th Century Business

Just as there is no such thing as good marketing or good manufacturing, there is no such thing as good primary care — it completely depends on how that care is tailored to meet the needs of patients with a particular medical condition.

Missouri Show Me Health Plans Cost Calculator for Health Insurance Enrollment screen shot - health insurance education

Facilitating Health Insurance Enrollment in an Uncertain Environment

Lessons learned from five years of open enrollment in Missouri.

Birkmeyer02_pullquote - national physician practices NPPs

Aggregators, Innovators, and the Resurgence of National Physician Practices

A perspective on the growth of NPPs and the ideological divide between for-profit and nonprofit providers.

Hospital-based ACOs Key Capabilities Are Different Based on Level of Risk

Hospital-based ACOs Face Challenges in Tracking Performance Indicators

A focus on bundled payments for specific episodes of care — versus the broad changes required in an ACO model — may be a more effective method for ACO participants to develop capabilities required to measure utilization, cost, and revenue metrics.

Medicaid Referral to Specialist by the Numbers without eConsults

Can eConsults Save Medicaid?

How eConsults unlock medical expertise for the underserved.

Transparency Can Improve Both Quality and Cost of Care

Survey Snapshot: Seeing Progress in Transparency, but the Quest for Value Continues

NEJM Catalyst Insights Council members agree that despite the challenges and caveats, transparency efforts are essential.

Growth in alternative payment models shared savings shared risk bundled payments population-based payments

The State of the Evidence on Payment Reform

Despite some successes among the many efforts to execute value-oriented payment models, the lack of rigorous independent research studies impedes robust progress.

University of Utah Health Buzz Survey Report Cost of Care and Physician Responsibility Out-of-Pocket Costs

Buzz Survey Report: Cost of Care and Physician Responsibility

An independent NEJM Catalyst report sponsored by University of Utah Health on how practicing clinicians and health care leaders view health care costs.

Donald Berwick Melinda Buntin Patrick Conway Raymond Vara Edward Prewitt head shots IHI forum panel on health care policy

Signal or Noise? Navigating Health Care Policy — Part 2

A discussion from the Institute for Healthcare Improvement National Forum. Part 2 of a two-part series.


A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »


Value Based Care

181 Articles

Are Fraud and Abuse Laws Stifling…

To realize the true potential of value-based care, we must update the underlying assumptions in…

What 21st Century Health Care Should…

Just as there is no such thing as good marketing or good manufacturing, there is…

Disrupting the Health Care Landscape: New…

Traditional boundaries are disappearing in health care. Unlikely partners such as CVS Health–Aetna are teaming…

Insights Council

Have a voice. Join other health care leaders effecting change, shaping tomorrow.

Apply Now