Claims Management News

Healthcare Payment Reform May Need the Employer Perspective

“It’s also important to remember that the vast number of employers are smaller in size... These are the ones by and large making the final opinion on healthcare payment reform.”

By Vera Gruessner

- At the Healthcare Financial Management Association (HFMA) National Payment Innovation Summit taking place February 10 to 12 in Memphis, Tennessee, a multitude of stakeholders gathered to share ideas and innovations related to healthcare payment reform and the health insurance industry.

Healthcare Bundled Payments

Dr. Robert Galvin, MBA, MD, CEO at Equity Healthcare, spoke at the HFMA National Payment Innovation Summit about employers and healthcare payment reform within the medical industry.

“I was a primary care doctor for about 10 years so I came from the granular experience of seeing about 35 patients per day before managed care. That was at the root of trying to find value for our payment system,” Galvin began.

“I think it’s great that we’re doing healthcare payment reform. People are arguing against the administration and asking how to accomplish this healthcare payment reform. As we expand upon new payment models, patients and consumers have seamless care and can see their doctors seamlessly while doctors are excited about seeing their patients and applying science and their compassion toward it.”

“We’re all working very hard at this. I want to talk about why the folks involved in payment reform should care what employers think. Benefit design is moving in a direction that isn’t compatible with payment reform. Commercial payers are important [when it comes to benefit design],” he clarified.

“Why should any one provider care about the employers since they never see employers and never hear about employers? ‘Why should I care?’ payers and providers consider,” Galvin continued.

“I think the reason to these questions is that we are the voice behind the insurers. It’s really not their money that they’re using. It’s the employers’ and employees’ money that payers are using.”

“Payers could innovate with GE or other major employers. [Medicare and federal agencies] have a theory of what they want to do and if it’s not where you want to go, you can work with employers,” explained Galvin.

“Through employers is how the workers get all their benefits. It is how employees and their kids get benefits. However, in today’s world, when kids turn 26 years old [and lose their parents’ coverage under Obamacare], they’re not happy [with the state of the health insurance market.]”

“Many employees think ‘What’s in it for me?’ The way employers are thinking about this is important. It’s interesting – it is a very unique thing that the US has employers involved in [healthcare coverage and access].”

“However, employers are not in this because they love healthcare. They’re in it because of great tax breaks and because of employee retention and recruitment,” Dr. Galvin positioned.

“Recruitment and retention is real and becoming more needed as people become grow into a more skilled labor force. It is important because it is about employers,” said Galvin. “Employers are powerful in a unique way – they are unified and they look for value for their dollar which is why we have the push toward value-based payment models.”

“Employers have a high level for policy. Employers are clearly powerful. For example, when it comes to the Cadillac tax, employers made an impact on its policy. And when it comes to managed care – where did that start? It began with employers.”

“Additionally, health promotion and disease management did not generate from Medicare and Medicaid but from employers. With all of the positives I’ve said, healthcare coverage is not imperative for employers. They don’t think about healthcare all of the time.”

“It’s also important to remember that the vast number of employers. Around 95 percent have under a few hundred people employed. These are the ones by and large making the final opinion on healthcare payment reform,” Galvin concluded.

As the medical industry innovates to pursue new payment models and work toward quality improvements among clinics and hospitals, it will be beneficial to have a multitude of stakeholders involved including payers, providers, federal agencies, state officials, the patient community, and employers.

When providers and payers join together to form accountable care organizations, bundled payment programs, or beneficiary incentives, it will grow imperative to speak to the consumer base and the executives of small and mid-sized businesses, according to Dr. Robert Galvin.

Healthcare payment reform will need to involve the participation of employers. Company leaders will need to have a seat at the table when health plans are putting together new benefit offerings or attempting to innovate into new payment models such as value-based care reimbursement or healthcare bundled payments.