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May 08, 2017
Business Groups Urge Administration to Accelerate Market-Based Healthcare Reforms

Two plan sponsor groups are calling for the Trump administration to undertake a series of market-based initiatives to lower healthcare costs.

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healthcare benefitsIn a May 2 letter to President Trump and Health and Human Services Secretary Tom Price, the Pacific Business Group on Health (PBGH) and the ERISA Industry Committee (ERIC) proposed targeted deregulation and market-based purchasing strategies, and offered a policy blueprint based on innovations that some large employers have already undertaken.

“It’s absolutely critical for the health of Americans and our economy that value-based care is quickly embedded in the health care system,” said PBGH President and CEO David Lansky in a statement. “Policymakers must focus on what works to achieve these goals, and we know that value-based care helps to drive down costs and improve patient outcomes.”

America spends far more than any other country on health care, but its outcomes fall short of other developed countries on many key healthcare indicators, according to the letter from ERIC and PBGH. This misalignment in spending and outcomes is partially the result of the fee-for-service payment model, which pays solely for the volume of healthcare services without regard to quality, and is still used in over 80% of healthcare transactions.

Value-based care and market-based strategies—including value-based payment, transparency, consumer engagement, and healthy competition—have the proven potential to incentivize high-quality patient care, the groups stated. This market-based approach can help patients receive better care and make more informed choices, while providers are rewarded for achieving quality patient outcomes, purchasers are paying for what works, and businesses can invest in jobs and innovation.

“Value-based care should be front and center when policymakers look for ways to improve quality and make health care more accessible and affordable,” said ERIC President and CEO Annette Guarisco Fildes. “Remember, the government pays for insurance for about 100 million people. In order to cut taxes and fund other national priorities, we've got to drive government efficiency, effectiveness and accountability—and there is no better or more proven way to do that than promoting value-based care, short of curing diseases altogether.”

Under the banner of the newly announced DRIVE Health Initiative, ERIC and PBGH outlined a policy blueprint focusing on the following elements:

  1. Consumer engagement and appropriate financial incentives, including smarter use of health savings accounts in high-deductible health plans; lower cost-sharing for high-value chronic care management services; and more flexible use of value-based care for Medicare beneficiaries.
  2. Alternative provider payment models, including prospectively-set payments for comprehensive bundles; larger financial incentives for providers accepting two-sided financial risk; strong financial incentives for hospitals to provide high-quality care, including the reduction of avoidable readmissions and hospital-acquired conditions; prospective enrollment in Medicare Accountable Care Organizations; and wider use of telehealth services.
  3. Transparency and performance measures, including stronger requirements for standardized measures of clinical outcomes, patient-reported outcomes and patient experience; creation of aggregated databases that pool data from various sources, including clinical data from providers and hospitals as well as insurance claims data; and stronger interoperability requirements for electronic medical records and patient-generated data.
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