There’s no doubt that the health system needs new payment models to replace the aging fee-for-service (FFS) method criticized for providing incentives for physicians to do more procedures, prescribe more drugs, and see more patients more frequently.
Among efforts to control costs and improve patient outcomes, health insurers and health systems have been shifting from the FFS model, which drives volume, to a payment model that rewards value. They hope value-based payment will help keep costs down while improving patient outcomes. Health system marketers call it better care at lower cost.
The federal Centers for Medicare and Medicaid Services says value-based care is significant: “Our value-based programs are important because they’re helping us move toward paying providers based on the quality, rather than the quantity of care they give patients.”
During a session on value-based care at the April’s Health Journalism 2018 conference in Phoenix, we heard how executives at UnitedHealthcare, one of the nation’s largest health insurers, were “maniacal” about value-based care. UHC’s much-respected Chief Medical Officer Sam Ho, M.D., explained that the company has been using this approach to pay for and deliver care since 2001.
It’s difficult to argue, however, that value-based care is, in fact, containing costs while health care spending continues to rise every year at rates that almost always exceed the rate of inflation. And if patient outcomes are improving, why does health care quality in the United States rank so low compared with that of other nations? See this Health System Tracker from the Peterson Center on Healthcare and the Kaiser Family Foundation for data on health care costs and quality in the United States versus that of other countries.
Stated differently, perhaps value-based care is just another new trend or just an old idea with a new name. Researchers asked recently if having physicians and other providers accept more financial risk actually would improve quality and lower costs. Their research suggests that the transformation from volume to value appears to be driven more by ideology and aspiration.
Bruce Japsen, who writes about health care for Forbes and moderated the AHCJ panel in Phoenix, explained that value-based care is complicated. “Journalists should think of it as all a part of the same effort to get patients’ medical care and treatment in the right place, in the right amount and at the right time,” he said. “The key going forward will be how successful these models will be at reducing costs. We will know that when premiums stop rising or slow dramatically.”
As an example of value-based care, he cited UnitedHealthcare’s plan to provide housing for some of its members in Medicaid plans who are homeless. “Does paying a person’s $500-a-month rent translate into saving money if this person has mental illness, gets care and no longer shows up at the emergency room 10 times a month at a cost of $1,000 or more?” he asked. “Time will tell.”
Check out this new tip sheet on value-based care before you start reporting on the situation in your community.