Paying for value: What's next?

With the Supreme Court's upholding of the Affordable Healthcare Act (ACA), all eyes have now turned to the industry to see whether this law can truly improve the health status of our nation. In 2014, major changes are expected to occur, including state health insurance exchanges and Medicaid expansion. Thus, many observers have remarked that the ACA's focus is more about improving access to health care, as opposed to the delivery of that care. By providing more Americans with access to a healthcare system that rewards volume instead of quality or value, there are valid concerns the ACA may exacerbate the problem of rapid cost growth. In response to the challenge of paying for public programs and private health insurance, several initiatives have already emerged to improve value in our health care delivery system. We believe that bundled payments are a critical piece of the solution that can provide a framework for high-value providers to be awarded for quality and cost efficiency, rather than being penalized as a FFS system would do. Our payment system is primarily fee-for-service (FFS), which is designed to reward more volume and has been effective in driving more services. While FFS is in many ways dysfunctional, it is familiar to providers, employers and members. It is well supported by current claims systems and processes and does not require providers to assume any degree of risk. Therefore, while we think these new paradigms are superior in many ways, it is likely that FFS will exist for some time to come.