Value-Based Care’s Data Problem

Rachel Katz OptimizedLisa is an administrator at an Accountable Care Organization, or ACO — a new healthcare payment model that encourages coordinated, high-quality, and efficient care. Lisa’s ACO facilitates the program at about 100 clinics around California, and her mission in the first year of operating might seem elementary to an outsider: to report a set of metrics to Medicare that indicate the health of patients who had been seen at these clinics.

At the start of 2015, Lisa received a panel of patients to review. She had expected a list of about 600, but instead there were 2,400. For each, she needed to report on a specific outcome or physician practices — like which beneficiaries with hypertension had blood pressure less than 140/90 and which had been screened for a risk of falling.

The kicker: she had just six weeks to submit this data. Most of the clinics didn’t have staff to do the required reporting, so Lisa contracted an assistant to travel from clinic to clinic, collecting the information they needed. About a quarter of the clinics used paper records, so the pair of administrators leafed through stacks of paper charts for the blood pressure and screening data.

In six weeks, Lisa collected 2,400 data points from across the clinics and submitted them to a third party vendor who would produce reports for Medicare. Lisa will wait until August to find out whether the ACO met its goals.

ACOs are on the cutting edge of applying data to improve the quality of care patients desperately need. And yet Lisa can only hope to track her clinics’ progress and adjust her recommendations annually based on dubious and data collected through a tedious manual process.

Healthcare’s new normal

Lisa’s situation is representative of a rapid shift in healthcare as more incentives are established for providers to improve patient outcomes and cut costs. It’s called value-based care (VBC), a payment model that attempts to pay doctors for the quality of care they provide rather than the quantity. ACOs are one manifestation; it’s happening across small clinics and large hospitals, driven primarily by government initiatives. Private insurers, too, are finding these new payment models financially appealing, and many are following suit.

The whole healthcare system is bound to follow these initial experimenters. According to a 2014 McKesson study, various forms of value-based care already account for over 40% of reimbursements and are expected to surpass current volume-based models by 2020. The Center for Medicare & Medicaid Services (CMS) announced in January a goal of 30% of all Medicare payments in value-based models by 2016 and 50% by 2018. In March, CMS launched the Healthcare Payment Learning and Action Network with some of the most influential people in medicine, insurance, pharma, technology, and government representatives to figure out how to make this transition. President Obama spoke at the Network’s kick-off meeting. Value-based reimbursement is here to stay.

I believe the concept of value-based care is good for healthcare. VBC encourages providers to make changes that put the patient at the center of care, so that different services can be provided across providers in a collaborative way. If all went according to the VBC vision, there would be fewer redundant tests, more emphasis on preventative care, and an effort to keep high-risk patients out of the emergency room. It’s also better for costs, something we desperately need in the US, where healthcare spending per capita is more than twice the OECD average.

But Lisa’s story, at the leading edge of the value-based experiment, is not good at all. ACOs and most other value-based models are new, constantly changing, and unproven. ACOs report on 33 metrics that are supposed to represent the quality of care provided by their networks of providers. While still extremely limited in scope, any more than 33 metrics would have made Lisa’s job impossible. So far, few ACOs have reported any savings. Worse — the metrics are unproven. What if they overemphasize standardized process over patient outcomes? And what if efficiency measures result in neglectful and impersonal care? A lot is riding on Lisa’s testing ground.

The administrative challenge

By engaging with and learning from people like Lisa, I have begun to understand the problems frontier administrators face — the same problems countless others will face if we don’t address the administrative burden early on. Here are a few of the top headaches being rolled out in the name of value:

Selecting metrics

For ACOs, 33 metrics are tracked today. Inevitably, these will expand and change as accountable care evolves. There are also countless other systems of metrics encouraged by other incentive programs: the Physician Quality Reporting System measures, Meaningful Use metrics, Agency for Healthcare Research and Quality Indicators, the Consumer Assessment of Healthcare Providers and Systems for patient experience metrics, indicators for each specialty (Stroke and Stroke Rehabilitation Physician Performance Measurement Set, Endoscopy and Polyp Surveillance Physician Performance Measurement Set, and the Heart Failure Performance Measurement Set, to name a few). The document outlining protocols for the Physician Quality Reporting System is 18 pages long, with a mouthful of a title to match: “The 2015 Physician Quality Reporting System (PQRS) Measure-Applicability Validation (MAV) Process for Claims-Based Reporting of Individual Measures.” Got that? A new piece of legislation that passed the House of Representatives last week — the “doc fix” bill — is about to revamp many of these requirements once again.

Collecting data

Lisa had to fumble through different electronic systems and paper charts to extract the relevant data for each patient in her panel at dozens of different clinics. In many cases, it was clear that care had been provided (e.g. an unstable patient had been upgraded from a cane to a walker), but the documentation wasn’t there (to fulfill the “Screening for Future Fall Risk” metric, documentation must state whether the patient had no falls, one fall without major injury, two or more falls, or any fall with major injury.) Therefore, even though care was provided to prevent future falls, the documentation did not meet the CMS requirement and no credit was given.

For the next reporting year, Lisa is designing her own reporting mechanisms for clinics and doctors. She says that her first reporting experience “was invaluable in learning ways to improve the reporting for year 2015 and beyond,” and she is putting processes in place to facilitate reporting next year. But each clinic is different: some need a page at the front of their paper chart with check boxes, and some have templates in their electronic health records. Her new processes may improve the situation, but additional tracking could also cut into time doctors spend with patients and add to the squeeze they already feel.

Integrating data

Lisa integrated all the data from each clinic manually, and this is a problem for small institutions who are trying to communicate and coordinate with each other. Right now it takes a long time and is not very scalable. Even at larger institutions with leading electronic health record systems, the data is locked away within proprietary databases, often in incompatible formats. Clinical data is rarely integrated with financial and patient-reported data in the way required to tie outcomes and claims to reimbursements in a value-based model.


After all of her data collection, Lisa still had to submit her data to a third part to produce reports, and she will wait many months for the results. The CMS websites are comically complex ; the instruction manual for using the CMS metric reporting interface is 127 pages long.

Putting patients at the center

If these problems aren’t addressed, we’re in for a long and painful healthcare reform. Administrative costs will continue to rise, along with another generation of frustrated physicians and admins. Moreover, value-based care could be deemed a failure not because it’s a bad idea but because of poor implementation. Instead of putting patients at the center of care, it could breed more bureaucracy and force doctors to spend more time reporting on metrics and less time with patients.

We can address these issues and we must — to give value-based care a chance at moving the US toward more patient-centered, less exorbitant healthcare.

Big thank you to the administrators and physicians who have shared their experiences with me. I am co-founder of a new company, Able Health, working to address these issues. I would love to talk to anyone interested in sharing your experiences — please email hello@ablehealth.co. Follow me @rachelthekatz.

Note: Subjects’ names have been changed.

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2 replies »

  1. Well it’s the ‘elephant in the room’ aka ‘the healthcare borg’. Bravo! If not a tad sad to the measured enthusiasm of ACOs as trail blazers into the value based healthcare economy.

    The administrative complexity (superbill punch lists, HCFA 1500s, yada, yada, yah..) we’ve built was even challenging before managed care contracting and the repricing and ‘mother may’ I permission based certification of visits, referrals, admits, etc., much to the delight of many (Trizetto et al) it wrought the birth the RCM vertical. I remember the days when hospital systems used to fraudulently age A/R based on charges and were shocked when they had to reprice to contract rates and take hits to balance sheets & P&Ls.

    Lets face it, the tangled hierarchical, specialty specific web of document, code, file, and chase receivables we’ve woven is unfix-able. We must simplify. Global budgets and the world according to PMPM (while not without it’s own actuarially constructed complexity) are the future.

    Take a listen to just one of my heroes Rushika Fernandopulle MD, CEO and Founder of Iora Health (he gets it!). P.S. it ain’t an ACO (as least as currently defined by ACA and rule sequelae):


    Footnote: the direct practice model, a ‘dis-intermediation’ play, is based on membership (pre-paid) fees for bundled primary care medicine which in principal is re-seeding the return to the HMO model, IMJ (at least the non profit community based version, not the Wall Street bastardized version that destroyed this community oriented asset).

    Nice piece!!