With the issue of health care at the center of the 2020 presidential campaign, North Carolina is tackling it head-on—with Duke at the center of the reforms.
North Carolina’s health care system currently operates under a fee-for-service model, which charges patients for every service they receive during health visits regardless of quality of care. It’s shifting to a model that pays providers based on the success of health outcomes. The team behind this progress is multifaceted, including the Duke-Margolis Center for Health Policy, Duke University Health System and the North Carolina Department of Health and Human Services.
The current model was born in the midst of the establishment of the federal Medicaid and Medicare systems in 1965. While the fee-for-service model has since become the U.S. health care standard, critics have argued that it has resulted in skyrocketing expenses for patients and providers alike, especially if a patient is charged for a service that they don’t actually need.
To cope with those rising costs, North Carolina and Duke University affiliates are helping to pioneer a new way to pay for health care in North Carolina.
“North Carolina is dramatically redesigning the way health care is paid for and delivered in the state,” wrote Robert Eick, a policy fellow at the Duke-Margolis Center, in an email to The Chronicle. “These changes are being led by [North Carolina] Medicaid’s transition to managed care and reimbursement models that pay for better patient health rather than how many services a provider or hospital delivers.”
Under the new system, providers will be paid based on their patients’ health outcomes rather than the number of services they receive. This change is being implemented by both Medicaid providers and private insurers including Blue Cross and Blue Shield of North Carolina, the state’s largest private insurer.
The idea of value-based payment has already been implemented in 48 states with varying levels of success, and alternative payment models represented 34% of all payments in 2017. States like New York have tested and implemented value-based systems for Medicaid and are progressing toward new approaches to maternity care and HIV treatment.
In North Carolina, value-based payment models have already been implemented in areas like Winston-Salem, where physicians at Ardmore Family Practice receive extra pay in addition to a standard charge when certain quality outcomes are achieved.
Eick wrote that the transition is “an essential focus of our work at Duke-Margolis,” a center within the University that aims to produce innovative solutions for healthcare dilemmas. The center collaborates with industry and policy experts to develop, implement and evaluate health policy in the state of North Carolina.
The Duke University Health System also worked with Blue Cross NC to spearhead the health care reform within its facilities.
This reform is not the first time the two have worked together, as they formed a new insurance company, Experience Health, as a joint venture two years ago. The company was created to meet the needs of seniors, and it will be launching a Medicare Advantage program in January 2020, according to a news release.
That launch is happening alongside the launch of Blue Premier—a collective effort including Blue Cross NC and Duke Health alongside a host of other state health care providers—which would place responsibility for costs and care on providers.
The new reform relies on close partnerships between health care providers, something that Thomas Owens, president of Duke University Hospital and senior vice president for Duke University Health System, described as one of the main forces driving the movement.
“Blue Cross and the state have been really challenging us,” Owens said. “We try to see the world through each other’s eyes, learn about what challenges we face and how we might better serve patients by working together.”
Owens emphasized that Duke Health is trying to move away from transactional relationships and focus more on patients themselves, a process that has been ongoing for several years.
“Another key driver of change is that patient preferences are changing,” Owens said. “Patients are seeking care differently.”
Owens explained that health care needs and preferences are changing across age groups, so younger people may have different expectations than older generations. The region served by Duke University Hospital also treats more diabetes and smoking-related diseases than other regions, so this needs to be taken into account instead of developing a one-size-fits-all approach.
North Carolina is also working to promote health in other ways.
The state Medicaid division recently launched the Healthy Opportunities program, which aims to address underlying causes of health issues, such as housing stability. Duke is also involved in that program, as Mark McClellan, director of the Duke-Margolis Center, serves on the advisory panel for Healthy Opportunities.
“It certainly feels like a challenging time for many in health care with all the changes coming, but that means it’s also a really exciting time,” Owens said.
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Nadia Bey, Trinity '23, was managing editor for The Chronicle's 117th volume and digital strategy director for Volume 118.