NBCH Supports Government Leadership in Value-Based Physician Pay for Performance

Congress and the Centers for Medicare and Medicaid (CMS) are considering a number of strategies in the 109th session to integrate value-based purchasing into the Medicare program, though it is yet to be determined whether this action will result in incremental demonstration programs or if fundamental reform of the current Medicare provider reimbursement process will take place. Both purchasers and providers recognize that the current Medicare payment system needs to be updated. No longer can or should our nation's largest single purchaser of health care services enable an inefficient system which is based on an antiquated regulatory pricing system.

NBCH believes that fundamental change is absolutely vital this year and recommends that Congress and CMS work together to provide the leadership necessary to set a new and constructive precedent toward long-term reform. The most appropriate initial step in this process is the development of national consensus measures, followed by an incremental integration process allowing a proportion of provider's Medicare reimbursement to be performance-based. Overtures and dalliances toward ongoing demonstration projects and quasi-reform are no longer acceptable, particularly given the unsustainable cost and growth of health care services. Our government needs to make a firmer commitment toward long-term, effective reform.

Parallel to government's efforts, NBCH and its members are dedicated to value-based purchasing of health care services through the collective action of public and private purchasers. In developing, identifying and disseminating best practices in value-based purchasing strategies; NBCH seeks to accelerate the nation's progress towards safe, efficient, high quality health care.

NBCH is a national, non-profit, membership association of business health coalitions committed to reforming the health care system and improving community health through value-based purchasing. NBCH's membership consists of nearly 80 employer-based health care coalitions dedicated to value-based purchasing of health care services. Representing more than 10,000 employers and approximately 20 million employees and their dependents, NBCH's member business coalitions are composed of mostly mid- and large-sized employers in both the private and public sectors across the United States.

As the catalyst for value-based purchasing, for over a decade NBCH has been focused on a clear set of principles:

• Value-based health care purchasing — obtaining the highest quality care at the most reasonable cost
• Measuring the comparative quality and efficiency of hospitals, physicians, and health plans in the community to identify the best value
• Creating incentives to provide higher-value care through integrated delivery systems and continuous quality improvement
• Improving the overall health of the community

The Role of Medicare in Value-Based Purchasing

NBCH and our members commend Medicare for taking a leadership role in provider pay for performance. As the nation's largest health care purchaser, Medicare has an opportunity to set an example to the private sector, and is in a very unique position to have the most influence on building the business case for quality. Additionally, to the degree possible, Medicare and private sector pay for performance activities need to be coordinated. A fine example of such collaboration is a Medicare pilot program in Arkansas in which physicians will be paid a bonus for investing and using health information technology (HIT). Similarly, NBCH's member coalition in Arkansas is participating in a pay for performance project that comprises a bonus for physicians investing in HIT who have been certified through NCQA's physician recognition program.

Key to the success of a performance-based health care provider payment system is a standardized set of national consensus measures. Consistency and reliability are vital to the success of performance-based health care. These measures should be used as a platform for all private and public sector performance programs, with preference given to measures endorsed by the National Quality Forum (NQF), and independent and national accreditation entities.

Finally, in addition to the development of national measures, we hope that as Congress works to address the Medicare physician reimbursement issue that considerable focus will be given to the basic principle of differential payment based on objective measures. We believe that timely development of this basic principle is the overriding responsibility of Congress while relegating to the Secretary of the Department of Health and Human Services (HHS) the authority to develop the processes for implementation of a Medicare provider differential payment system.

NBCH Value-Based Purchasing Projects

To move value-based physician pay for performance incentive programs forward, late in 2004 NBCH selected four of its member organizations as Bridges to Excellence demonstration sites. The sites are part of an overall NBCH physician incentive program implemented through a partnership with the Bridges to Excellence coalition, a group of large employers supporting physician pay-for-performance efforts around the country.

Bridges to Excellence creates market incentives for physicians to follow best practices, which will yield better outcomes and reduced costs. The NBCH Bridges to Excellence initiative was launched in July 2004 to assists local business coalitions in taking a leadership role in recognizing and rewarding health care providers who demonstrate that they deliver performance-based, efficient and effective care.

Business coalitions were selected for this grassroots effort because they can coordinate the action of many employers, which is a key component to creating market incentives for improved health care quality and value. Business coalitions can have a strong impact in their markets and, in turn, can be instrumental in restructuring the health care reimbursement system that rewards performance-focused activities.

The four business coalitions selected as demonstration sites are:

• Employers' Health Coalition, Fort Smith, Arkansas
• Tri-State Health Care Coalition, Quincy, Illinois
• Heartland Healthcare Coalition, Peoria, Illinois
• Colorado Business Group on Health, Denver, Colorado

With the addition of these new markets, Bridges to Excellence has become one of the largest national physician pay for performance programs. Working with these four coalitions, NBCH is developing and implement strategies to promote the adoption of Bridges to Excellence tenets by both local employers and physicians. The lessons learned and experience gained in these markets will assist other business coalitions, purchasers and providers in implementing future physician incentive programs.

In providing a knowledge base for employers to improve health care quality and make the most of their health care spending, over the past four years NBCH has developed a tool known as eValue8. This is a Web-based health plan procurement system enabling health care purchasers and coalitions to focus on plan performance management and improvement while reducing the time involved and associated expense.

eValue8 is conducted annually and is driven specifically by NBCH coalitions and members, focusing and uniting purchaser voices informed by public health and clinical experts. The tool includes information on hundreds of benchmarks on critical issues such as plan administration, provider performance, pharmacy management, disease management, patient safety, and member and provider communication. It also complements the National Committee for Quality Assurance (NCQA) accreditation process, an essential foundation without which eValue8 would need to be vastly more extensive.

For more information, call 202-775-9300 or visit www.nbch.org.