Data transformations to improve the performance of health plan payment methods.

The conventional method for developing health care plan payment systems uses observed data to study alternative algorithms and set incentives for the health care system. In this paper, we take a different approach and transform the input data rather than the algorithm, so that the data used reflect the desired spending levels rather than the observed spending levels. We present a general economic model that incorporates the previously overlooked two-way relationship between health plan payment and insurer actions. We then demonstrate our systematic approach for data transformations in two Medicare applications: underprovision of care for individuals with chronic illnesses and health care disparities by geographic income levels. Empirically comparing our method to two other common approaches shows that the "side effects" of these approaches vary by context, and that data transformation is an effective tool for addressing misallocations in individual health insurance markets.

Do quality improvements in assisted reproduction technology increase patient numbers in a managed competition setting?

In a system of managed competition, selective contracting and patient choice reward providers for quality improvements through increases in patient numbers and revenue. We research whether these mechanisms function as envisioned by investigating the relationship between quality improvements and patient numbers in assisted reproduction technology in the Netherlands. Success rate improvements primarily reduce volume as fewer secondary treatments are necessary, but this can be compensated by attracting new patients. Using nationwide registry data from 1996 to 2016, we find limited evidence that high-quality clinics attract new patients, and insufficiently as to compensate for the reduction in secondary treatments. The net effect of quality increases appears to be a small decline in revenue. Therefore, we conclude that patient choice and active purchasing reward quality improvements insufficiently. Nevertheless, clinics have improved quality drastically over the last years, showing that financial incentives are perhaps less important factors for quality improvements than factors such as intrinsic motivation and professional autonomy.

Advice from the health insurer as a channelling strategy: a natural experiment at a Dutch health insurance company.

BACKGROUND: In a health care system based on managed competition it is important that health insurers are able to channel their enrolees to preferred care providers. However, enrolees are often very negative about financial incentives and any limitations in their choice of care provider. Therefore, a Dutch health insurance company conducted an experiment to study the effectiveness of a new method of channelling their enrolees. This method entails giving enrolees advise on which physiotherapists to choose when they call customer service. Offering this advice as an extra service is supposed to improve service quality ratings. Objective of this study is to evaluate this channelling method on effectiveness and the impact on service quality ratings. METHODS: In this experiment, one of the health insurer's customer service call teams (pilot team) began advising enrolees on their choice of physiotherapist. Three data sources were used. Firstly, all enrolees who called customer service received an online questionnaire in order to measure their evaluation of the quality of service. Enrolees who were offered advice received a slightly different questionnaire which, in addition, asked about whether they intended to follow the advice they were offered. Multilevel regression analysis was conducted to analyse the difference in service quality ratings between the pilot team and two comparable customer service teams before and after the implementation of the channelling method. Secondly, employees logged each call, registering, if they offered advice, whether the enrolee accepted it, and if so, which care provider was advised. Thirdly, data from the insurance claims were used to see if enrolees visited the recommended physiotherapist. RESULTS: The results of the questionnaire show that enrolees responded favorably to being offered advice on the choice of physiotherapist. Furthermore, 45% of enrolees who received advice and then went on to visit a care provider, followed the advice. The service quality ratings were higher compared to control groups. However, it could not be determined whether this effect was entirely due to the intervention. CONCLUSIONS: Channelling enrolees towards preferred care providers by offering advice on their choice of care provider when they call customer service is successful. The effect on service quality seems positive, although a causal relationship could not be determined.

The Merit-based Incentive Payment System (MIPS): A Primer for Otolaryngologists.

Following passage of the 2015 Medicare Access and CHIP Reauthorization Act, most clinicians caring for Medicare Part B patients were required to participate in a new value-based reimbursement system known as the Merit-based Incentive Payment System (MIPS) beginning in 2017. The MIPS adjusts payment rates to providers based on a composite score of performance across 4 categories: quality, advancing care information, clinical practice improvement activities, and resource use. However, factors such as practice size, setting, informational capabilities, and patient population may pose challenges as otolaryngologists endeavor to adapt to this broad-reaching payment reform. Given potential barriers to adoption, otolaryngologists should be aware of several important initiatives to help optimize their performance, including advocacy efforts by the American Academy of Otolaryngology-Head and Neck Surgery, the development of otolaryngology-specific MIPS quality measures, and the launch of a Centers for Medicare & Medicaid Services-qualified otolaryngology clinical data registry to facilitate reporting.

Managing imperfect competition by pay for performance and reference pricing.

I study a managed health service market where differentiated providers compete for consumers by choosing multiple service qualities, and where copayments that consumers pay and payments that providers receive for services are set by a payer. The optimal regulation scheme is two-sided. On the demand side, it justifies and clarifies value-based reference pricing. On the supply side, it prescribes pay for performance when consumers misperceive service benefits or providers have intrinsic quality incentives. The optimal bonuses are expressed in terms of demand elasticities, service technology, and provider characteristics. However, pay for performance may not outperform prospective payment when consumers are rational and providers are profit maximizing, or when one of the service qualities is not contractible.

Japanese healthcare: Fostering competition and controlling costs.

Japan's universal healthcare system is relatively inexpensive, provides accessible services, and was established nearly 10 years before Canada's. Two aspects of Japan's system are particularly interesting. The first is that there is active competition for patients between a variety of hospital providers, which can be privately or publicly owned. This competition is based on service quality because prices are set centrally. The second feature is that these prices are adjusted biannually by a National Council, the Chuikyo, that includes payers (employers), providers, and third-party experts in public negotiations. This process improves transparency, reduces political stakes, and allows for appropriate fee adjustments. Recent movements in Canada toward more activity-based funding and greater management accountability are developing the capabilities of healthcare executives to embrace these ideas, if introduced in Canada. The increased autonomy afforded to providers will empower their leaders to make strategic decisions to improve the quality and efficiency of healthcare services.

Innovations In Diabetes Care Around the World: Case Studies Of Care Transformation Through Accountable Care Reforms.

The rising prevalence, health burden, and cost of chronic diseases such as diabetes have accelerated global interest in innovative care models that use approaches such as community-based care and information technology to improve or transform disease prevention, diagnosis, and treatment. Although evidence on the effectiveness of innovative care models is emerging, scaling up or extending these models beyond their original setting has been difficult. We developed a framework to highlight policy barriers-institutional, regulatory, and financial-to the diffusion of transformative innovations in diabetes care. The framework builds on accountable care principles that support higher-value care, or better patient-level outcomes at lower cost. We applied this framework to three case studies from the United States, Mexico, and India to describe how innovators and policy leaders have addressed barriers, with a focus on important financing barriers to provider and consumer payment. The lessons have implications for policy reform to promote innovation through new funding approaches, institutional reforms, and performance measures with the goal of addressing the growing burdens of diabetes and other chronic diseases.

Demand-side strategies to deal with moral hazard in public insurance for long-term care.

Moral hazard in public insurance for long-term care may be counteracted by strategies influencing supply or demand. Demand-side strategies may target the patient or the insurer. Various demand-side strategies and how they are implemented in four European countries (Germany, Belgium, Switzerland and the Netherlands) are described, highlighting the pros and cons of each strategy. Patient-oriented strategies to counteract moral hazard are used in all four countries but their impact on efficiency is unclear and crucially depends on their design. Strategies targeted at insurers are much less popular: Belgium and Switzerland have introduced elements of managed competition for some types of long-term care, as has the Netherlands in 2015. As only some elements of managed competition have been introduced, it is unclear whether it improves efficiency. Its effect will depend on the feasibility of setting appropriate financial incentives for insurers using risk equalization and the willingness of governments to provide insurers with instruments to manage long-term care.

Acceptance of selective contracting: the role of trust in the health insurer.

BACKGROUND: In a demand oriented health care system based on managed competition, health insurers have incentives to become prudent buyers of care on behalf of their enrolees. They are allowed to selectively contract care providers. This is supposed to stimulate competition between care providers and both increase the quality of care and contain costs in the health care system. However, health insurers are reluctant to implement selective contracting; they believe their enrolees will not accept this. One reason, insurers believe, is that enrolees do not trust their health insurer. However, this has never been studied. This paper aims to study the role played by enrolees' trust in the health insurer on their acceptance of selective contracting. METHODS: An online survey was conducted among 4,422 people insured through a large Dutch health insurance company. Trust in the health insurer, trust in the purchasing strategy of the health insurer and acceptance of selective contracting were measured using multiple item scales. A regression model was constructed to analyse the results. RESULTS: Trust in the health insurer turned out to be an important prerequisite for the acceptance of selective contracting among their enrolees. The association of trust in the purchasing strategy of the health insurer with acceptance of selective contracting is stronger for older people than younger people. Furthermore, it was found that men and healthier people accepted selective contracting by their health insurer more readily. This was also true for younger people with a low level of trust in their health insurer. CONCLUSION: This study provides insight into factors that influence people's acceptance of selective contracting by their health insurer. This may help health insurers to implement selective contracting in a way their enrolees will accept and, thus, help systems of managed competition to develop.

Embracing a diversified future for US primary care.

Although less focused upon given the current emphasis on the patient-centered medical home innovation, the future for US primary care is arguably one that will be characterized by diversity in service delivery structures and personnel. The drivers of this diversity include increased patient demand requiring a larger number of primary care access points; the need for lower-cost delivery structures that can flourish in a low-margin business model; greater interest in primary care delivery by retailers and hospitals that see their involvement as a means to enhance their core business goals; the increased desire by non-physician providers to gain work independence; and a growing cadre of younger PCPs whose career and job preferences leave them open to working in a variety of different settings and structures. A key issue to ask of a more diversified primary care system is whether or not it will be characterized by competition or cooperation. While a competitive system would not be unexpected given historical and current trends, such a system would likely stunt the prospects for a full revitalization of US primary care. However, there is reason to believe that a cooperative system is possible and would be advantageous, given the mutual dependencies that already exist among primary care stakeholders, and additional steps that could be taken to enhance such dependencies even more into the future.

Managed competition in the Netherlands-a qualitative study.

BACKGROUND: In 2006, the Health Insurance Act changed Dutch health insurance by implementing managed competition, whereby the health insurance market is strongly regulated by the government. The aim of the study is to investigate key stakeholders' opinions about effects of recent changes in Dutch healthcare policy, focussing upon three important requirements for successful managed competition: risk-adjustment, consumer choice and instruments for managed care. METHOD: Expert interviews with 12 key stakeholders were performed (October/November 2009), transcribed and analyzed in a four-step qualitative process. RESULTS: The Dutch risk-adjustment scheme is very advanced but incentives for health insurers to select risks remain. The Health Insurance Act has given insurers new incentives to focus upon consumer needs and preferences, whereby large group contracts have replaced individual consumer choice with collective decision-making. Managed care concepts are slow in developing. Patient organizations and insurers report taking part in such efforts, but other stakeholders do not perceive that progress has been made. CONCLUSIONS: The pre-requisites for successful managed competition in the Netherlands are not yet entirely in place: risk-adjustment schemes cannot yet counteract all incentives to select risks, consumer preferences are just beginning to influence insurer policies and managed care elements are currently in the development stage.

Swiss and Dutch "consumer-driven health care": ideal model or reality?

This article addresses three topics. First, it reports on the international interest in the health care reforms of Switzerland and The Netherlands in the 1990s and early 2000s that operate under the label "managed competition" or "consumer-driven health care." Second, the article reviews the behavior assumptions that make plausible the case for the model of "managed competition." Third, it analyze the actual reform experience of Switzerland and Holland to assess to what extent they confirm the validity of those assumptions. The article concludes that there is a triple gap in understanding of those topics: a gap between the theoretical model of managed competition and the reforms as implemented in both Switzerland and The Netherlands; second, a gap between the expectations of policy-makers and the results of the reforms, and third, a gap between reform outcomes and the observations of external commentators that have embraced the reforms as the ultimate success of "consumer-driven health care." The article concludes with a discussion of the implications of this "triple gap".