Paying doctors for quality, not quantity, is easier said than done in an American health care system that has been built around the concept that physicians should be compensated for every test, every visit and every suture.
But Highmark Inc. is part of a growing number of health care organizations that hopes to turn the old equation on its head. On Thursday, the Pittsburgh company announced the formation of the "Accountable Care Alliance," a network of hospitals and physicians meant to better coordinate patient care -- and in the process, change the way physicians are paid.
Some could get paid up to 30 percent more that they currently do from Highmark, picking up bonuses that will be doled out to practices that are able to wrestle down the cost of care practice- and system-wide.
Highmark is hoping to bend the cost curve by 3 to 5 percent per patient. The new payment arrangement is already in effect.
Right now, the rewards system is focused on primary care physicians, including those inside Highmark's new Allegheny Health Network, and some independent practices as well. That adds up to a total of about 500 participating doctors who will get the bonuses if they and their patients meet health outcomes and quality standards on some 28 care metrics.
Eventually, specialists will be added, too.
"This is a program that is built around quality," said Paul Kaplan, senior vice president of provider integration at Highmark. The goal, he said, is for patients to be able say, "I got what I needed, I got it when I needed it. And the price is right."
Highmark describes the alliance as akin to an "accountable care organization," which is essentially a network of doctors and medical providers who have agreed to assume greater responsibility and risk when it comes to the quality of care patients receive, and the cost of providing that care (that's where the "accountable" comes in).
Version 1.0 of the new Accountable Care Alliance will rely on bonuses to reward performance, but the risk portion of the equation -- putting practices and specialists on the hook if their patients eat up too much care and money -- won't be put in place for another few years, said Mike Fiaschetti, president of health markets for Highmark's insurance wing.
Eventually, the alliance will come to resemble a fully accountable care organization, in which physicians and specialist can reap the rewards -- and savings -- from good care, and will owe the insurer money if care costs more than is budgeted.
At the heart of this new model is a transition away from volume-based "fee-for-service" care -- the nation's dominant and long-standing reimbursement system -- and toward a system that rewards doctors for the quality of that care. To do that, the entire health care system has to become more patient-centered.
The result, it is hoped, is that medical bill will come down, and patient satisfaction will grow.
Highmark's accountable care group is the next step in the transition; the health insurer is already in the midst of a multi-year "patient-centered medical home" pilot program, which, in some ways, lays the foundation for the larger, system-wide ACOs.
The patient-centered medical home pilot began 2011, including 160 primary care physicians in 12 practices that cover about 45,000 patients. The pilot has since been expanded to include 1,000 primary care physicians in more than 100 practices.
While the accountable care organizations address both care and cost, the PCMHs are more focused on care -- seeking to establish a more comprehensive, continuous relationship among patients, physicians and nurses, particularly when it comes to working with those dealing with chronic health issues that need more regular monitoring and coaching.
Highmark reported that, among patients being seen in the patient-care medical home pilot practices, inpatient acute admissions dropped 9 percent, 30-day readmissions dropped 13 percent, and care costs for patients with coronary artery disease and diabetics dropped.
Highmark's Accountable Care Alliance will initially include physicians from six of the seven Allegheny Health Network hospitals -- Allegheny General Hospital, Allegheny Valley Hospital, Canonsburg Hospital, Forbes Hospital, Jefferson Hospital and West Penn Hospital. Eventually, physicians from Saint Vincent's Hospital in Erie will join.
For a practice, or an entire health system, to become more patient-centered, one key is better communication, between physicians themselves and also between the practice and the patient, said Tony Farah, chief medical officer at the West Penn Allegheny Health System, which is now part of the larger Allegheny Health Network.
"I see patients with five different doctors," Dr. Farah said. "That care, I can tell you right now, is never coordinated." He said it leads to duplicative, too-expensive care. Assigning outreach specialists and nurses to track patients is one way to solve that problem, he said.
Others will be explored, Mr. Fiaschetti, and the reimbursement program will be tweaked over the next several years to include some combination of incentives, risk-sharing and perhaps even "capitated" payments to certain practices.
The payment model will be installed across the breadth of Highmark's insurance product line, and will eventually include providers in West Virginia and Delaware, where the company also operates Blue Cross Blue Shield plans.
While Highmark's accountable care network is being built in the private realm, it's possible that the network could also someday participate in the federal government's Medicare accountable care organization project, called the Medicare Shared Savings Program.
Bill Toland: email@example.com or 412-263-2625. First Published July 18, 2013 12:00 AM