The Way Forward for Health Plans — Part III: Provider Payment Reform

Jeffrey Kang, M.D., chief medical officer of Cigna, is among the most thoughtful managed care executives — and a nice guy as well.  I spoke to him recently at the World Health Care Congress about how health plans can survive reform.  His view — not surprisingly — is that health plans must focus on two areas: 1. Wellness and care coordination; 2. Payment reform. 

Kang says that the reform legislation is “completely silent” on shifting provider payments from fee-for-service to fee-for-results.  “This is a big opportunity for health plans to innovate in the area of payment reform,” he says.  Despite all the talk about medical homes and accountable care organizations, payment reform really boils down to incentives and measurements, he says. 

It’s important to measure and provide incentives for better outcomes, Kang says, not for improved processes or certifications achieved.  Some examples of outcomes to measure might include smoking cessation, weight loss, lower blood pressure, and lower total cost of care.  Incentives should be around pay-for-performance, Kang adds, not for shared insurance risk.  “We as health plans are better off continuing to hold that insurance risk because we have the actuaries and the capital,” he says.  Health plans can then focus on “really trying to create payment methods that give people incentives to improve quality, lower cost or penalties if they miss these targets.”  Cigna has eight pilots offering incentives for quality, outcomes and lower total healthcare costs. 

As for wellness and disease management, Kang notes, “From a benefit design perspective, the legislation did get it correct” by focusing on first dollar coverage for prevention and screening.  “You want 100% of the people to be getting the recommended prevention and screening services.  That’s the opportunity that health plans have,” he says.  He notes that about 75% to 80% of Cigna’s entire book of business has access to first dollar coverage for preventive services, including all risk and consumer-directed lives; however, utilization is only 60% — representing a big upside.

About these ads

4 Responses to The Way Forward for Health Plans — Part III: Provider Payment Reform

  1. [...] Kang, MD, chief medical officer for Cigna, has some thoughts on this already: It’s important to measure and provide incentives for better outcomes… not for [...]

  2. [...] Jeffrey Kang, MD, chief medical officer for Cigna, has some thoughts on this already: [...]

  3. [...] Jeffrey Kang, MD, chief medical officer for Cigna, has some thoughts on this already: [...]

  4. [...] Jeffrey Kang, MD, chief medical officer for Cigna, has some thoughts on this already: [...]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

%d bloggers like this: