Michael Thompson on Employers Engaging on Value-Based Reimbursement

Currently, employers choose health plans based on administrative costs and provider discounts, but they need to start engaging around value-based reimbursement, said Michael Thompson, president and chief executive officer of the National Alliance of Healthcare Purchaser Coalitions.

Transcript

How can mandatory bundled payments reduce the cost of care for employers?

You know, today we’re in a system that rewards volume rather than value, and the advantage of a bundled payment—type approach is that it essentially is designed in a manner to pay for the care that’s needed to execute on an episode of care. And by including appropriate incentives and warranties around quality in those payments, you actually reward value delivered by the providers themselves.

In some instances, we’ve actually found where the fee-for-service system does not reward a high-performing system. For example, in the area of substance use disorder. That’s an area where we’re looking at new models of reimbursement that are more conducive to the initial treatment and the ongoing support of people with those conditions.

From your experience, what are the main things purchasers consider when they shop for health plans?

You know, how purchasers select health plans today and how we ultimately need to select health plans can be 2 different things. Today, it’s largely driven on 2 factors: their administrative costs and the discounts that they’re receiving from providers. When the evaluation is done by consulting firms, those tend to be the dominant factors in the performance.

I think increasingly we need to get to working with health plans that are more progressive in how they are engaging with providers around value-based reimbursement, around the support with consumers, and the downstream impact on outcomes and value. That’s a little more difficult evaluation, but ultimately, I think that’s how health plans can distinguish themselves from each other.