My background in public health has meant that I am my friends’ “go-to” when it comes to anything related to understanding their health care bills or coverage. They ask me to explain their insurance options during open enrollment, why they received a bill that was much higher than expected, or if they can actually use their Medicaid when they get sick. To be honest, I don’t always have good answers to all their questions. I am challenged by the task of breaking down the complex ideas into easy-to-swallow bites for people who aren’t immersed in this world.
My friends are not the only ones who find dealing with and paying for health care to be overwhelming. Health care in the United States is expensive and complicated, but we aren’t getting good value for our money; our health outcomes lag far behind other industrialized nations. This is because of the way the health care system was designed and built. Typically, we determine the amount that is owed based on the number and types of services a patient received. Services include things like lab tests, visits with providers, x-rays, as well as procedures such as surgeries and blood transfusions. This system of billing for services is known as a fee-for-service payment model, and it dominates health care in our country.
Under this payment model, the more services and procedures a patient receives, the more financially beneficial it is for providers and health systems. Unfortunately, this does not always benefit the patient, their wallet, or their health. By charging per service, there is little incentive to address the root cause of a patient’s health condition, which may be social factors and circumstances that take place outside of the hospital walls, or even to actually improve a patient’s health. Communities of color and low-income Coloradans are less likely to have access to resources like transportation, healthy food, and safe housing, which help us get and stay healthy, or robust health insurance, which will pay for expensive and unnecessary health care services a provider or hospital might order for them. Therefore, continuing to provide and pay for health care under a fee-for-service payment model is not just expensive, it perpetuates preventable health disparities.
Rethinking how health care is paid for is an essential step to achieving health equity in Colorado and beyond. The movement to change what we pay for in health care is called payment reform. At Center for Health Progress, we are committed to deepening our knowledge and building the capacity of communities and partners to advocate for payment reform in Colorado. We recently published the report, Payment Reform and Alternative Payment Models: A Primer, as a first step in that journey. In it, you can read about “alternative payment models” or other ways we could determine health care costs, such as paying a set amount per patient regardless of what services they need or providing financial rewards for high quality care.
There are some innovative models working to change the way we pay for and deliver health care in Colorado. Health First Colorado (Colorado’s Medicaid Program) has an extensive primary health care program, known as the Accountable Care Collaborative (ACC), which connects members to social services by creating a network of coordinated providers. As it enters its second iteration this year, we will continue to learn how the ACC impacts the health of its members and reduces health care costs.
At Center for Health Progress, we are beginning the new year by learning more about payment reform as an important avenue to health equity. We hope you will join us in this work to ensure our health care system works for all Coloradans.