Is value-based health care a fad?

Photo: Robert Geiger via Flickr

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.

4 thoughts on “Is value-based health care a fad?

  1. Patti Singer

    I’m curious about whether value-based care is/was supposed to put more emphasis on prevention. That seems to be what UHC is saying. As we all know, it’s hard to know the return on investment in prevention. We can’t always know what we stopped from happening. However, if the next big thing from the medical/industrial complex could move us from the current sick care system to a true health care system, I believe that would make physical, mental and financial improvements in individuals and in populations.
    Patti Singer

  2. Norman Bauman

    The key to all of this is Joe’s conclusion that value-based health care “appears to be driven more by ideology and aspiration than by evidence.”

    Fads can do a lot of damage, We now have evidence-based medicine, to show us which policies are effective and ineffective.

    When a company manufactures a new drug, they go from benchtop, to pilot plant, to industrial scale. Why don’t we do the same with health policy changes?

    Here’s the question that I ask people when I’m writing about these new policies (or “fads,” if you prefer):

    How can you advocate imposing policies on the entire health care system that haven’t been proven to work? Why haven’t you tested them on a small scale first? Why don’t you do randomized, controlled trials? Is that the method of science?

    In JAMA and NEJM, I see lots of articles that tried to demonstrate that these fads, like employee incentives, or “nudges,” or quality measurements, improved clinically meaningful, significant outcomes.

    Here’s a question that George Lundberg, ex-editor of JAMA, used to ask: “Show me the high-quality studies” of effectiveness.

  3. Norman Bauman

    I just came across this systematic review of pay-for-performance:

    7 March 2017
    The Effects of Pay-for-Performance Programs on Health, Health Care Use, and Processes of Care: A Systematic Review
    Aaron Mendelson, et al.
    Ann Intern Med. 2017;166(5):341-353.
    DOI: 10.7326/M16-1881

    Conclusion: Pay-for-performance programs may be associated with improved processes of care in ambulatory settings, but consistently positive associations with improved health outcomes have not been demonstrated in any setting.

    Primary Funding Source: U.S. Department of Veterans Affairs.

    (Notice that the funding was from the VA. When I look for evidence-based studies on improving quality, I wind up with a lot of VA studies. If you want to find out how to improve quality, maybe we should find out how the VA does it, not just the for-profits, since the VA has better outcomes, according to most of the research. For example, according to Hospital Compare, the 30-day mortality for acute myocardial infarction was 9% in VA hospitals, 14% in non-VA hospitals; and 9% and 16% respectively for pneumonia JAMA Intern Med. 2017 doi:10.1001/jamainternmed.2017.0605 and JAMA doi:10.1001/jama.2017.17667 ; also see J Gen Intern Med. doi: 10.1007/s11606-016-3775-2 .)

    So here’s my question for the next AHCJ panel: If pay-for-performance programs consistently fail to demonstrate improved health outcomes, why do you want to expand it to the whole health care system?

  4. Elizabeth Gardner

    Whenever I consider the prospect of reducing the total US healthcare bill, I think about all the businesses and people now benefiting from the enormous amount we pay. If we actually reduce that total, someone’s going to lose. No one likes to lose, and in this country the right to make as much money as you possibly can, regardless of any collateral damage to the well-being of society as a whole, is so venerated that it amounts to our national religion. So while I see the logic of value-based care, and I think it holds a lot of potential to improve the quality of the care we receive if the principles are applied consistently and the incentives are right (two big ifs), I think truly “bending the cost curve” to get our total per capita costs down to the level of other industrialized countries will require changing the whole system in ways that are heretical to our national religion. We might be able to shift who gets the money, but there are formidable forces arrayed against actually spending less, and the only offsetting force on the other side is fear of national bankruptcy, which doesn’t seem to be much of a force at all.

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