Health insurers are gung-ho about finding ways to pay physicians for clinical quality as opposed to quantity. And the health care reform bill proposed some innovative payment reforms such as bundled payments, medical homes and accountable care organizations.

But no one should get too excited just yet, said Anna Fallieras, program leader for health care initiatives at General Electric, during a presentation at the 2010 AHIP Institute in Las Vegas.

"Right now we have a bit of irrational exuberance around these programs and little evidence about their effectiveness," Fallieras said before a standing-room only crowd. In addition, she said, these programs will not cure all that ails the health care industry. GE, which in 2009 spent $2.5 billion on employee health care, has yet to see any payoffs from the recent quality/efficiency push. GE's expenditures for outpatient services, for example, shot up 30% in 2009, driven mostly by higher prices as opposed to increased utilization.

Another troubling trend: The mantra that provider consolidation inevitably leads to lower costs/better quality/more efficiency has not proven the case, Fallieras said. GE's research found that in consolidating provider markets where there is a dominant provider organization, costs rose significantly will little indication of any clinical benefits for GE employees.

Fallieras also noted that what's old is new again ... some of the reform bills proposals mimic the old concepts of capitation and primary gatekeeper, neither of which panned out.

Andrew Baskin, M.D., the medical director at Aetna Inc., also sounded a cautionary note when discussing payment reform. He focused his presentation on the immense difficulty of creating bundled payments, a project underway at Aetna. The insurer's development team is trying to develop bundled payments for knee replacement surgeries. Questions large and small constantly crop up, he noted.

For example, what patients are eligible for bundled payments? "Well, if you decide that only healthy patients are eligible, you've just eliminated at least half of the potential payments, since the procedure is usually done on elderly patients, many of whom can't really be considered healthy. And when do bundled payments start, at the decision date or surgical date? And are all clinicians involved in the patient's care eligible for bundled services, or just a surgeon?"

The list of decisions required to offer bundled payments are seemingly endless, he said. "A real good one is the idea you'll be paying for directly-related costs. Everyone you put in a room will have a different definition of what's 'directly related,' I assure you."

 --Greg Gillespie


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