New payment model values quality over quantity

At Children’s Hospitals and Clinics of Minnesota, we pride ourselves in getting the best outcomes for our patients. That includes keeping patients healthy so they don’t require extra visits and expensive procedures.

We have a long-standing commitment to innovative care delivery, which triggered our willingness to partner with the Minnesota Department of Human Services to test a new delivery and payment model aimed at better health outcomes and lower costs for our state’s Medicaid program. The shift in approach is to tie payment to delivering higher quality outcomes rather than relying on the historic model of publicly-funded health care programs in Minnesota where health care providers were paid for the procedure.

By participating in this new payment model, our job at Children’s will be to manage the care of 14,000 patients. Rather than a system that creates an incentive for more visits and procedures, the total cost of the care model creates an incentive for us to advance methods that keep people healthy so they don’t have to use expensive services.

The cool news is that we’ve already been doing this for nearly a decade. Children’s established the state’s first Medical Home in 2004 and this care coordination model has resulted in reduced hospitalization and fewer readmissions, among other outcomes.

“With nearly a decade of experience to draw on, Children’s is pleased to partner with the state on an approach that financially rewards better health outcomes,” said Maria Christu, General Counsel and Vice President of Advoacy and Policy at Children’s. “We are confident we’ll deliver on the quality outcomes the state and, more importantly, our patients expect.”

Children’s joins five other major health care providers. They include Essentia Health, CentraCare Health System, North Memorial Health Care, Federally Qualified Health Center Urban Health Network (FUHN) and Northwest Metro Alliance (a partnership between Allina Health System and HealthPartners). In all, we’ll be responsible for 100,000 Minnesotans enrolled in publicly-funded programs.

Minnesota is the first state in the country to implement this new payment model. “This new payment system will deliver better health care at a better price. By changing the way we pay health care providers we can incentivize reform, help Minnesotans live healthier lives, and slow the rising cost of health care in our state,” Gov. Mark Dayton said in a statement.

This model is being implemented at the same time as Minnesota’s Medicaid population is expected to increase. Gov. Dayton’s budget proposal, which we wrote about last week, includes expanding Medical Assistance to 145,000 more Minnesotans, including 47,000 kids.

 

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