Local health providers deal with national trends

Alaska health care payment trends are contrary to national trends, according to Central Peninsula Hospital CEO Rick Davis.

A pair of presentations from health care providers at Friday’s Kenai Peninsula Industry Outlook Forum — from Davis and from Peninsula Community Health CEO Monica Adams — provided an overview of health care both nationally and locally. Davis said health care nationwide is moving from a “fee for service” model, in which providers are paid the specific task of treating a sick person, to a value-based payment, in which providers are paid for the broader service of creating a healthy community. The existing fee for service model, Davis said, incentives patient volume because “every time we do something, we get paid for it,” whether or not the action is most effective for the patient.

“There’s no incentive to coordinate care,” Davis said. “The incentive is just to find a sick patient, treat him, and get paid for it. … There’s no data transparency, so it’s hard for a patient to know if a hospital is good or bad, or how much a procedure might cost. And frankly most people aren’t concerned until there’s an urgent need, and at that point they’re more concerned with getting cured than studying who’s good and who’s bad.”

Davis said this system incentives the wrong goals.

“We’re good at fixing patients, but not good at keeping community healthy,” Davis said.

He contrasted the present volume-incentivizing system with the newer model of value-based payment.

“Value in this sense is quality of care provided, divided by cost of care,” Davis said. “Value is measured in patient satisfaction.”

The conceptual change in health care payment is being driven by the Affordable Care Act, which Davis said penalizes hospitals “for not taking patient satisfaction milestones and quality care milestones.” He used readmissions as an example of a prevalent phenomenon under the old system being penalized by the new.

“Unnecessary readmissions are a huge cost to our system,” Davis said. “In today’s market, there’s no incentive not to have a readmission. If something goes wrong and you come back to the hospital or have to go back to your physician, you get charged again. Incentives are really messed up, so that’s changing. We’re starting to penalize for readmissions.”

Such changes, he said, are dropping costs and improving care in the Lower 48 but have yet to reach Alaska. What Davis described as the ills of the fee for service model are more likely to be familiar to Kenai Peninsula residents.

Davis once again used readmission as an example. Under new federal incentives, CPH spent $80,000 on penalties for readmission of hip-replacement patients in 2015.

“Part of the problem with our readmissions on joints is the aftercare is not available here on the Kenai Peninsula,” Davis said. “It makes it hard to take care of people at home, and they have to come into the hospital. But I think if you can’t do a joint replacement as good as the guy down the road, then you can’t be doing it.”

One of CPH’s efforts to adapt to new health care trends is a plan for a care coordination system that will share Medicaid patient information between providers and stabilize care costs. This program was being planned in partnership with Moda Health, the insurance company recently barred from Alaska’s individual insurance market and being put under state restrictions in Eastern Oregon, where it was setting up a similar care coordination program. Although Moda has insufficient capital to provide insurance in Alaska, CPH spokesperson Bruce Richards said that the hospital is planning to continue work with them on the coordinated care project, although “it’s entirely possible it may get pushed back a little, considering all that they (Moda) are dealing with.”

One need that could be met through increased coordination, Davis said, is the integration of mental health services into the larger care delivery effort. Adams said that PCHS has taken steps to meet this need with the two social workers and one psychologist in the group’s medical department, and with its psychiatric and behavioral health departments. Adams said PCHS’s psychological and behavioral workers were integrated into the community — the two social workers provide crisis intervention at CPH, and the behavioral health workers serve most schools in the Kenai Peninsula Borough.

Reach Ben Boettger at ben.boettger@peninsulaclarion.com.

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