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January 26, 2016

Payments to Providers Must Be Reformed

Summary:

Carriers and healthcare providers have no incentives to curb fee-for-service payments. Self-insured employers must lead the way.

Photo Courtesy of Mike Mozart

Sally Welborn wrote a good blog post in The Health Care Learning & Action Network calling on self-insured employers to take the lead in reforming healthcare purchasing. She is senior vice president of benefits at Walmart Stores and is responsible for the design and administration of benefits.

She writes, “Fixing the payment system can actually result in limiting the cost increases AND drive quality improvements.”

We can’t wait for carriers to fix the fee-for-service system.

She writes:

  • Most are publicly traded and must consider their shareholders. The amount of money they make directly correlates to how much healthcare costs. The more it costs, the more they make from their customers…us.
  • Most consider their provider network to be a key competitive advantage. So by default they must consider the provider community a primary stakeholder they can’t ignore.
  • Many have a large volume of business with CMS/Medicare and must have systems and processes that support their largest payer.

“More importantly,” Sally says, “I urge you to consider what you [self-insured employers] can do to move your organization to smarter, value-based purchasing of healthcare.”

If true reform is to occur, and such reform is quite overdue, self-insured employers will need to make it happen.

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About the Author

Tom Emerick is president of Emerick Consulting and cofounder of EdisonHealth and Thera Advisors.  Emerick’s years with Wal-Mart Stores, Burger King, British Petroleum and American Fidelity Assurance have provided him with an excellent blend of experience and contacts.

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