Most Value-based Payment Programs in Medicine Fail
Most value-based payment programs designed for healthcare fail to lower costs or improve health.
“The reason current programs have failed is that payers have tried to create “incentives” for physicians, hospitals, and other healthcare providers to reduce spending without providing the resources and flexibility those providers need to improve the way they deliver services to their patients. The solution is not to increase the financial risk for providers in these incentive programs, but to take a fundamentally different approach.”
Success in value-based payment requires a comprehensive solution that involve significant changes in current practice for most organizations. Value-based payment must support care processes that improve health and save money.
There are four important considerations:
1. Identify avoidable spending. That is, identify specific types of healthcare services or spending that could be reduced without harming patients. For example, bypasses and stents in patients with stable heart artery disease add no benefit to optimal medical therapy, they are much more expensive, and they expose the patient to additional risks.
2. Design an approach to delivering services that is expected to reduce the avoidable spending. Develop a program to deliver optimal medical therapy for diabetes and heart artery disease to reduce the need for expensive cardiac procedures and tests.
3. Create payments that support provider teams in caring for these high-risk, high-cost patients. Primary care advanced medical homes for cardiometabolic disease can function very well in a capitated system.
4. Hold providers accountable for delivering appropriate, evidence-based services in return for the value-based payments. Capitation failed before because there was no link of payment to quality that matters. Provider teams should deliver OMT at much higher levels than achieved in usual care. Minnesota already publicly reports OMT achievement for diabetes and vascular disease for over 500 organizations. Nationally, OMT is achieved in 22% of patients. If that number increased to 50% costs would be lower and patients would be healthier.
Failure to improve health and lower cost is a systems problem. Another reason that these value-based systems fail is they don’t focus on the highest risk, highest cost patients. That is where we can show the most benefit more quickly. The article that I have linked is excellent and it is a good review. Cardiometabolic disease is the low-hanging fruit.