Paul Levy, former chief executive of Boston’s Beth Israel Deaconess Medical Center, recently made a compelling argument in a blog post about why value-based pricing for hospital services ultimately will fail.
In “The Game That Shows Why Value-Based Pricing Is Doomed” on AthenaInsight, Levy argues that the incentives in value-based pricing are all wrong. As a payment model, value-based pricing promotes selfishness but at the same time requires all parties to cooperate, he writes.
It’s not often that anyone criticizes value-based care, and why would they? That would be like opposing the use of grocery coupons. Continue reading
We’ve all heard the talk about how the health care system is moving quickly from fee-for-service payment to value-based care. Certainly a new payment model is needed, but what is the difference between fee-for-service and value-based payment?
As health care journalists we have a good idea about how FFS works, but what are the characteristics of new models in which physicians and hospitals are paid for delivering value? And how do payers define value exactly? Continue reading
Health insurers are trying a wide variety of methods to link drug costs to the value medications deliver to patients. Value-based payment strategies bear watching for two reasons. First, they are aimed at controlling the high costs of prescription medications, and, second, they could usher in new ways of pricing all medications.
The idea that insurers should link a drug’s value to price is not new, but it is gaining traction, at least among private health plans. One proposal calls for paying for drugs based on the quality-adjusted life year, or QALY, a measure used to quantify the value of treatment. Continue reading
We’ve told you over and over again on this blog that the Affordable Care Act isn’t just about coverage. It’s also about changing how health care is delivered, moving away from fee-for-service to a more value- and quality-based system. Medicare is aiming to have half of its payments under alternative payment models by 2018.
That means hospitals have to change. But not all of them want to.
Fee-for-service is the preferred business model for many. Why should those hospitals want to go through considerable expense and upheaval to switch to a new system that demands more – and may well pay less? Continue reading