It’s about the money, when it comes to value based health care. Shifting from a pay per visit enterprise to a system based on evidence and outcomes, is more than an incremental change. The medical industry has avoided evidence based and outcomes. The word the industry is most likely to substitute for evidence or outcomes is value. Value based health care is the new buzz word.
The word value is used primarily in the industry to be synonymous with quality. However, quality care is not the same as improving health care outcomes. We want to explore the industry’s use of value and later contrast that with the type of care which promotes the greatest advantages for consumers.
You may have heard our system of medicine called inefficient. Improving efficiency would save money and reduce cost. I wrote about efficiency in “Transparency Breeds Medical Efficiency”. Efficiency is a metric in production, as a measure of increased productivity. Productivity is the ability to produce one more widget at the same cost of production.
This level of efficiency benefits the producer first, while the end user gains benefits only if the producer passes the savings along. Value is gain by the industry for improving their efficiency and the end user (patient) may receive value as a reduction in cost for services received. This use of the word value assumes customers primarily interact with the medical industry is based on cost. Patient interact with the medical industry desire better outcomes.
Value Based Medicine
Value has also been used in the medical industry to describe an increase of quality of care, mostly due to improved efficiency. Advancements in pharmaceutical research is usually given credit for quality of care improvements. An example would be life expectancy has continually improved over the past 50 years for both men and women. People living longer does add value to everyone’s life. Life expectancy is quantifiable evidence that drug therapies work. However, the trend in this country point to consumer’s desire for treatments which are less drug centered.
Drug therapies can add years to one’s life and by doing may add some quality years. More years of life is does not necessarily equate to increased quality of life. Somehow we’ve been seduced into this notion that a pharmaceutical treatment plan is the best in medical outcomes. While technological advancements can create efficiencies, drug therapy can assist with treatment but consumers should demand more evidence based treatment outcomes.
Mandated Value Added
Under the Affordable Care Act of 2010, the Centers for Medicare and Medicaid Services (CMS) are adding a value modifier under the Medicare physician fee schedule. This value modifier will eventually apply to all physicians who bill for Medicare patients. Medicare reimbursement is based on the value modifier which collect cost and quality data for each provider.
Medicare providers are encouraged to form Accountable Care Organization (ACO), which are supervised by the CMS. ACO reimbursement payments are tied to a score of 33 different measures. The industry lingo for these services are referred to as value based purchasing (VBP). VBP compiles data on the quality of health care, patient outcomes and health status and the cost of care. The goal is to manage the use of health care systems to reduce “inappropriate care” and to identify and reward best performers.
Appropriate Use Criteria (AUC) specify when it is appropriate to perform a medical procedure or service. An “appropriate” procedure is one for which the expected health benefits exceed the expected health risks by a wide margin.
CMS reimbursement payments are tied to the data scores of each provider and payments will be withheld or reduce for those providers who do not meet specific quality measures. To their credit most private and large national health insurers are in agreement and support efforts to accelerate reimbursement reform throughout the industry.
Critics of the CMS suggest that value has historically been centered on structure and compliance requirements from accreditation organizations. VBP outcome measures are too industry focused. They argue that the future of outcome measurements must manage outcomes specifically linked to patient results. The measures need to focus on consumer health indicators and health behaviors of communities.
Value Based Health Care
What does value based outcomes look like for consumers. Dr. Cornett of Wexner Medical Center in Ohio, defines health care value as Value equals Superior Outcomes plus Patient Centered Care plus Efficiency minus Low Cost. The problem is how we achieve Value from a health care system where there is a gap between research and practice. Where evidence is inconsistently implemented in clinical practice and the customers experience is lacking in data collected.
A customer centered approach to adding value to health care would be one that placed a higher value on maximizing outcomes at the lowest cost. The American Hospital Association’s Hospitals and Health Systems of the Future identified 4 priority strategies for achieving higher Value:
- Aligning hospitals, physicians and other clinical providers across the continuum of care.
- Utilizing evidence based practices to improve quality and patient safety.
- Improving efficiency through productivity and financial management.
- Developing integrated data systems.
In their book Redefining Health Care, Porter and Teisberg discussed the fundamental flaws of our health care system as having the wrong kind of competition. Competition not centered on providing patient value. Value which is divided creating high cost, low quality, under or over treatment, too many preventable errors in diagnosis and treatment, restrictions on choice, rationing of services, limited access and costly lawsuits.
Instead of focusing on zero sum competition, Porter and Teisberg suggest; health care should focus on value for the consumer not simply lower cost. Competition should be outcome based, occur over the entire cycle of care and based on a global scale, driven by a provider’s experience of the medical condition. Outcome data that supports the value based competition should by accessible by everyone. Innovations that increase value should be rewarded. Such as innovations that are superior in cost, quality and outcomes over their traditional medical practices.
Deerberg-Wittram, J., Guth, C., & Porter, M. E. (2013). Value-based competition: The role of outcome measurement. Public Health Forum 21 doi 10.1016/j.phf.2013.09.008
Ginsburg, M. (2011). Value based insurance design: Consumers views on paying more for high cost, low value care. Health Affairs 29(11) 2022-2026
Chapman, S. (2014). Strategies for success in a value based world. For The Record (Great Valley Publishing Company, Inc.), 26(9), 18-21
Karash, J. A. (2013). Investing in value-based health care. Hospitals & Health Networks,87(5), 54-58
Cornett, B. S. (2015). Discovering health care value: Outcomes and the bottom line. Journal of Health Care Compliance, 5-10.