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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.

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