Managed Care - January 2009 - (Page 25)

any physician involvement, but the other half don’t. For the good of the patient, those states try to leave care in the hands of doctors. But it’s also for the good of the doctor that they keep those regulations in place. When care becomes rules based, you define quality in a completely different way. High quality is how fast can I get what I know I need, how convenient is it and how affordable is it? So for simple disorders, retail clinics offer much higher quality of care than a doctor’s office, but because doctors have such political clout, they just fight these retail clinics tooth and nail. MC: Why should payers support disruptive innovations if improved access to care will no doubt lead to higher expenditures? CHRISTENSEN: If you are a fee-for-service system, the providers make more money by providing more services. As services become more affordable, patients will buy more. What we need is a model like Kaiser — an integrated system that operates on a fixed-fee basis for the year. That gets you away from overprovision and overuse. MC: You blame fee-for-service medicine for a lot of what ails the health care system and you support health savings accounts and high-deductible health plans. Do you foresee fee for service disappearing? CHRISTENSEN: We do. We think high-deductible health plans and health savings accounts will account for half of the market around 2014. For insurance companies, it’s a huge change in the way they need to do business. MC: If insurers refuse to pay for disruptive innovations, will innovations fade into obscurity? CHRISTENSEN: If they do not pay, it prevents business model innovation. There are two types of things they will not pay for: In one case it is not clear their refusal is counterproductive, and in the other, it clearly is counterproductive. There really are some procedures that are unnecessary, given our state of knowledge. Refusing to do things that aren’t demonstrably improving the quality of care isn’t a bad thing. But when they refuse to reimburse for a disruptive innovation, that’s where it really kills you. For example, at Kaiser, many physician assistants do colonoscopies because the ability to see what needs to be seen doesn’t require all the training of a physician. It’s imbedded in the equipment and the rules. Inside of Kaiser, they can utilize physician assistants when they are appropriately trained and they don’t run up against the CPT code kind of resistance. But in an independent world, a provider cannot get reimbursed if it substitutes a physician assistant for the physician herself because the physician assistant isn’t licensed to do that procedure yet, and payers only reimburse for licensed procedures. That kind of thing really does inhibit disruptive innovation. MC: If disruptive innovations reduce health care costs and payers deny reimbursement for even some scientifically proven disruptive technologies, are payers in fact responsible for the uptick in health care costs? CHRISTENSEN: They are. A lot of the inertia comes from the CPT code system. Disruptive innovators, when they have the innovation ready to commercialize, have to ask themselves, “Oh gee, do we have to go through all the risk and trouble and expense of getting a unique CPT code or should we just try to get this thing approved under an existing CPT code.” It always seems that using an existing code is a faster way to get to market, but that means that a disruptive innovation has to be commercialized through the same providers and the same institutions as the prior technology was. That reimbursement practice sucks what otherwise could have been disruptions that made things more affordable into the current system and keeps it expensive. MC: Should we chuck CPT code books? CHRISTENSEN: CPT books will become obsolete in two ways. In the world of integrated fixed-fee providers, CPT codes don’t matter. So as those providers grow, they can develop their own internal shadow prices of various services based on the value they create in the system. Their prices are not determined by some formulaic, Kremlinesque price-setting mechanism in the outside world. That will be one mechanism. The other is that as employers integrate back into the provision of care, they will start to negotiate prices directly with providers, cutting the middleman out of the loop. It’s the middleman — the insurers — who are reliant on these CPT codes. As direct negotiation occurs, the procedures will begin to mirror more the true market prices rather than ones negotiated by these formulas. MC: Thank you. MC JANUARY 2009 / MANAGED CARE 25

Table of Contents Feed for the Digital Edition of Managed Care - January 2009

Managed Care - January 2009 Editor's Memo Contents Legislation & Regulation News and Commentary Medication Management Compensation Monitor Health Care's Disruptive Innovations Q&A With Clayton Christensen 'Disruption' May Be Plans' Best Bet Avoid the PBM Rebate Trap HealthPartners Puts Diabetes on Notice Formulary Files Plan Watch Tomorrow's Medicine Ad Index Outlook Unmet Needs in the Management of Plaque Psoriasis Impact of RSV: Implications for Managed Care

Managed Care - January 2009

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