MHMC’s Payment Reform Goals

MHMC members are working to develop reimbursement systems that support a primary care based system and incent the right care at the right time in the most appropriate setting, while reducing inappropriate utilization and its associated costs and risks to patients.  

MHMC Members’ Vision Leads to Payment Reform Initiative

In the summer of 2008, the Maine Health Management Coalition held a series of strategic planning retreats to determine its future course.  It was agreed that health system redesign was a shared goal, but the vision for what a redesigned system would look like was unclear.  MaineHealth and Hannaford Brothers initiated the Health Action Collaborative (HAC) to bring together diverse stakeholders to identify the attributes of an 'idealized' reformed health system.

The group reached broad agreement that the attributes of an ‘idealized’ system would meet the aims of the Institute of Medicine of providing care that is safe, effective, equitable, and efficient and therefore

1. Provide transparent cost and quality information
2. Promote accountability for cost and quality at the patient, provider, and community levels
3. Favor a viable and sustainable primary care foundation for the healthcare system that provides integrated, patient-centered care
4. Align payment with desired outcomes and eliminates waste
5. Support a public that is informed and engaged
6. Adopt integrated health information technology (IT) infrastructure that promotes patient-centered coordination of care across settings

There was consensus among HAC participants that in addition to the Coalition’s on-going efforts to improve quality, that healthcare cost containment is also an increasingly urgent priority as demographic demands and economic conditions necessitate a more affordable healthcare system for purchasers. 

There was also consensus that sustainable quality improvement and cost reduction will only be achievable through a redesigned system supported by reformed payment. In the words of Harold Miller, Executive Director of NRHI , “a major cause of the quality and cost problems in healthcare today is that payment systems encourage volume-driven healthcare, rather than value-driven healthcare.  Under current payment systems, physicians, hospitals, and other healthcare providers receive strong financial incentives to deliver more services to more people, but are often financially penalized for providing better services and improving health."

Collaborative Work Yields Results

The HAC is now a Maine Health Management Coalition-Foundation (MHMC-F) sponsored payment reform project.  The initial charge to the group was evaluation of healthcare payment models and their desirability and applicability for Maine.  The ongoing role of the group is to oversee implementation of payment reform changes in Maine to support an improved system.  The group is comprised of representatives from Maine's hospitals and health systems, many large employers, Quality Counts, the Maine Quality Forum (MQF), MaineCare, health plans, employers and other interested parties. 

Key Elements in the Coalition’s Payment Reform Work  

Creation of the MHMC Payment Reform Model  The MHMC-F received a grant from the Maine Health Access Foundation (MeHAF) to begin its work evaluating, vetting, and piloting a reformed payment model in Maine.  The Coalition has engaged consumers, payors, employers, and providers in developing a proposed Value-Based Payment Model, detailed below. 

Payment Model Research and Pilot   After examining many payment models including but not limited to Prometheus, capitation, Accountable Care Organizations and episode payments, the HAC developed a combined model that is based on our knowledge of unwarranted variation of utilization and cost of healthcare within Maine.  The Value Based Payment Model matches reimbursement and benefit design to the different service categories from the Dartmouth Atlas.

Central to the Coalition’s reform initiative is our partnership with the MQF and Health Dialog.  In collaboration with Health Dialog, and building on research and analysis done on behalf of the MQF, we will analyze outcomes data in 3 categories - preference sensitive care, supply sensitive care, and effective care - in three Maine communities: Portland, Lewiston, and Bangor.  Health Dialog will provide data in each area identifying outcome and utilization variations.  Once areas of under use and overuse are identified, we will work with providers, payers, and employers to advance payment reform and benefit design changes to incent appropriate utilization.   In August 2009, MHMC-F applied for a grant through Aligning Forces for Quality (AF4Q) and the Robert Wood Johnson Foundation to further develop and pilot an incentive based reimbursement model to reduce unwarranted variation in the service categories identified in the Dartmouth Atlas.  MHMC-F was awarded the grant from the Robert Wood Johnson Foundation in January 2010.