Wednesday, July 22, 2009

Carilion moves to an innovative payment structure

Carilion's Dr. Ed Murphy (below) says the system will be turning its attention to problems inherent in the current medical payment system, which rewards over-treatment while providing no incentive to keep people well.

Carilion’s conversion from a traditional, hospital-centric health care organization to a multi-specialty, patient-centered clinic is entering a new phase.

The conversion for the Roanoke-based health care institution began three years ago with a commitment to improve patient care, improve service and eventually decrease health care costs.

“We’ve made remarkable progress in building the organization and infrastructure necessary to fulfill our promise,” says Carilion Clinic president and CEO Dr. Edward G. Murphy. “We’ve added more than 200 doctors, a physician leadership structure and a comprehensive electronic medical record. At the same time we’ve improved our academic profile by developing a new medical school and research institute with Virginia Tech.”

According to Murphy, Carilion is now turning its attention to problems inherent in the current medical payment system, which rewards over-treatment while providing no incentive to keep people well. Two new pilot programs aimed and improving patient care, efficiency and wellness while lowering costs will begin in 2010.

Carilion Pilots Brookings-Dartmouth Model A new and innovative, nationally-recognized health care model that rewards providers for improving patient outcomes while lowering cost growth will soon be pilot tested in Roanoke through a cooperative effort by the Engelberg Center for Health Care Reform at Brookings, The Dartmouth Institute for Health Policy and Clinical Practice, and the Carilion Clinic.

The “Accountable Care Organization” (ACO) model encourages physicians, hospitals, insurance companies, and the government to work together to coordinate care, improve quality, and reduce costs. The Engelberg Center and the Dartmouth Institute have selected Carilion Clinic to be a pilot site to implement the model through the Brookings-Dartmouth ACO Pilot Project.

In an ACO, providers assume greater responsibility for the quality and cost of the care they deliver–supporting providers when they take steps to keep their patients healthy, deliver high-quality care, and avoid costly medications and procedures. This makes it financially feasible for doctors to practice preventive care and to provide enhanced disease management for patients with chronic conditions such as heart disease and diabetes.

“The Brookings-Dartmouth ACO Pilot Project and Carilion Clinic are on similar paths,” says Murphy, “We understand that rising health care costs are not sustainable and that provider leadership is essential to reforms that reduce costs, improve efficiency, and are accountable for clinical outcomes. As providers, we are best equipped to develop solutions that keep patient care and quality at the center of the discussion.”

“Carilion’s work in developing an integrated multi-specialty physician group provides a strong foundation from which to pilot the payment reforms central to ACOs,” says Elliott Fisher, director of the Center for Population Health at Dartmouth.

“Accountable Care Organizations are a model for delivery reform that can help transform our nation’s health care system from one that rewards overuse to one that delivers high-quality care at lower costs,” says Mark McClellan, director of the Engelberg Center for Health Care Reform and Leonard D. Schaeffer Chair in Health Policy Studies at the Brookings Institution.

Carilion Clinic will receive technical assistance in setting up, implementing and testing the ACO concept, and will develop a pilot process for payment and delivery system reform based on accountability for quality improvement and cost reduction. Brookings and Dartmouth< style="font-style: italic;">

(This comment from Joe Kelliher was sent on Facebook: "Good article; important improvement. Mr Murphy may need to be careful; if he starts following these guys to closely, he may wind up finally moving toward the concept of price transparency; which he told me at a Roanoke Kiwanis meeting in 2007 wasn't important.

"I know of Mark McClelland and Leonard Schaeffer, who has the rare expertise of being a physician and an economist; which is a perfect combination to serve in this roll. While he was the Commissioner of FDA and as director of CMS; he worked hard to accomplish major cost saving and quality improvement initiatives. I've heard Mark speak on three different occasions.

"Leonard Schaeffer was the founding Chairman and CEO of WellPointe Health Systems. Both guys have been recognized by my professional Association (National Association of Health Underwriters - NAHU) for their outstanding work in and for Health Care and Health Care Financing."

And there was this from Diana Christopulos: "If they are using the Mayo Clinic model, we are in for great care at reasonable prices.")

1 comment:

  1. This is an excellant move on the part of Carilion. It is well known that Higher Cost do not necessarily mean better care. Pricing and Incentives tied to performance is much needed in the Health Care Industry. Mark McClelland worked hard toward the goal of better valued health care @ CMS and FDA in the Bush Administration. He also served as a Deputy Treasury Secretary under Bill Clinton.