There’s a debate in the United States about whether the current measures of health care quality are adequate to support the movement away from fee-for-service toward value-based payment. Some providers advocate slowing or even halting payment reform efforts because they don’t believe that quality can be adequately measured to determine fair payment. Employers and other purchasers, however, strongly support the currently available quality measures used in payment reform efforts to reward higher-performing providers. So far, the Trump administration has not weighed in.
The four of us, leaders of organizations that represent large employers and other purchasers of health care, reject any delay in payment reform efforts for the following three reasons:
Even imperfect measurement and transparency accelerate quality improvement. One set of measures often questioned is the Agency for Healthcare Research and Quality’s (AHRQ) Patient Safety Indicators (PSIs) used by the Centers for Medicare and Medicaid Services (CMS) and others in value-based payment programs. These indicators measure surgical complications and errors in hospitals, which is critical given that one in four hospital admissions is estimated to result in an adverse event.
PSIs remain among the most evidence-based, well-tested, and validated quality measures available. CMS uses many in its value-based purchasing programs. Use and reporting of PSIs through AHRQ’s Medicare Patient Safety Monitoring System has measurably improved quality. For instance, CMS reported a reduction in inpatient venous thromboembolisms (VTEs) from 28,000 in 2010 to 16,000 in 2014, meaning that 12,000 fewer patients had potentially fatal blood clots in 2014.
In addition to using quality measures in payment programs and for quality improvement, making measures public is key to accelerating change. “If transparency were a medication, it would be a blockbuster,” concluded a multi-stakeholder roundtable convened by the National Patient Safety Foundation’s Lucian Leape Institute in 2015. The foundation’s report cited the Leapfrog Group’s first-ever reporting of early elective delivery rates by hospitals in 2010, which galvanized a cascade of efforts to curtail the problem and thus reduce maternal harms and neonatal intensive care unit (NICU) admissions. This was effective: The national mean of early elective deliveries declined from a rate of 17% to 2.8% in only five years.
My big brother Bill, may he rest in peace, taught me a valuable lesson four decades ago. We were gearing up for an extended Alaskan wilderness trip and were having trouble with a piece of equipment. When we finally rigged up a solution, I said “that was harder than it should have been” and he quipped in his wry monotone delivery, “There are no hard jobs, only the wrong tools.”
That lesson has stuck in my mind all these years because, as simple as it seems, it carries a large truth. It rings of Archimedes when he was speaking about the simple tool known as the lever: “Give me but one firm spot on which to stand, and I will move the earth.”
Enter the Electronic Medical or Health Record (EMR or EHR) as it exists in most forms today. As information tools for clinicians, most EMRs have been purchased by administrators who know nothing of patient care or workflow, and most of these EMRs have been reverse engineered from billing and collection systems, because the dollar drives all.
The Robert Wood Johnson Foundation (RWJF) is striving to build a Culture of Health in this country where everyone has an equal opportunity to live the healthiest life possible, no matter where they live, learn, work, and play. To get there, we need to make sure that everyone is getting the high quality, affordable care they want and need whether this care is provided inside or outside the health care system. Right now in the U.S., we spend a lot of money on health care, especially as compared to other countries, but we don’t have the outcomes to show for it. Last year, Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 that would change how Medicare pays physicians with the goal of getting higher value for our health care dollars. And recently, the Centers for Medicare and Medicaid Services (CMS) proposed rules for how these payment and reporting requirements would be implemented.
On June 23, 2016, RWJF submitted comments on these proposed rules. We believe that changing health care payment in this country to reward better, rather than more care, is critically important. In our comments, we shared lessons and insights from RWJF grantees to encourage CMS to design incentives in ways that will truly transform our health care system to provide measurably better outcomes for all. We focused our comments on three areas: fostering integrated care, ensuring patient goals and needs are at the center of all we do, and providing high value care for everyone.
Ask the chief medical officer of a major health system about the issues that keep them up at night and he or she will talk about the need to understand outcomes in complex populations, the need to engage in new business models, novel collaborations with other stakeholders, and engaging “customers” i.e. patients in new ways, all while addressing increasing cost pressures and safety concerns.
Sit down with a franchise leader in oncology at a pharmaceutical or biotech innovator and ask the same questions, and the response will pretty much be the same.
The convergence of business imperatives is largely driven by two factors: 1) the shift to value based healthcare reimbursement from volume, and 2) our rapidly advancing understanding of the causes of disease and health that holds promise to accelerate further because of the proliferation of electronic health information coupled with continued scientific innovation.Continue reading…
How would you judge the value of your health care? A longstanding definition of treatment holds that value is the health outcomes achieved for the dollars spent. Yet behind that seemingly simple formula lies much complexity.
Think about it: Calculating outcomes and costs for treating a short-term acute condition, such as a child’s strep throat, may be easy. But it’s far harder to pinpoint value in a long-term serious illness such as advanced cancer, in which both both the outcomes and costs of treating a given individual—let alone a population with a particular cancer—may be unknown for years. And then there’s the complicating issue of our individual preferences, since one person’s definition of a good outcome—say, another few years of life—may differ from another’s, who may be seeking a total cure.Continue reading…
When a family member was a new mom she called me concerned about her 7-day old baby’s breathing.I almost sent them to the ER. Then she asked me if we could FaceTime. What I saw was a warm, pink, dry baby looking around, looking quite well to me. I was able to tell that she had no labored breathing, no retractions or nasal flaring. She just had a little stuffy nose. I had been answering questions, treating minor ailments and triaging the acutely ill for several years via text, but it was in that moment that I knew the iPhone and other smartphone devices would fundamentally and forever change the way physicians can deliver our services.
Fast forward to next year. An estimated 2 billion people will have smartphones across the world in 2016. Industries are being transformed radically by the widespread uptake of these devices. Healthcare will be no different and will continue to move toward more virtual care enabled by smartphones. As the example above demonstrates, it makes sense for both care and economics.Virtual care and telemedicine worldwide is expected to be a $34 B market by 2020 according to Mordor’s Market Intelligence, with the US accounting for 40% of that, nearing $15 Billion in the next five years. Several early stage tele-medicine companies have raised many millions of dollars in the last several months.
Payment reforms are driving the market toward value-based care and will only accelerate the use of telemedicine via smartphone. Many new forms of payment for medical services are emerging that are not tied to the legacy fee-for-service reimbursement model. Patients are paying more out of pocket and therefore have increasingly aligned interests with payers to reduce costs while achieving better overall health. These changes are, in turn, driving the empowered healthcare consumers’ demand for a better experience and convenience.
Recently we wrote a blog post promoting the benefits of shifting from fee-for-service to value-based payments. We praised the recent decision by leaders at the U.S. Department of Health and Human Services (HHS) to accelerate that shift, and we were then and remain convinced this shift paves the way for better, more affordable care.
There were some strong reactions to the post.
Some people think capitated payments have been discredited, others believe the change from fee-for-service will change little. One physician told John Irvine, editor at The Health Care Blog, that he got the impression from our post that we were saying value-based payments would make physicians lives easier. “Really?” Irvine’s doctor friend said. “You’re making my life easier? Prove it.”
How Will the Practice of Medicine Change?
We didn’t actually use the word easier in the post though we did say that “increasingly, physicians seek liberation from the constraints of fee-for-service in order to focus on the overall health of their patients. Value-based payments allow doctors to do exactly that.” So we definitely hear what Irvine’s friend is saying — and we understand his frustration. Has there ever been a time when so many physicians have been worn thin — angry with the direction of our health care system?
Irvine invited us to respond to his friend and we thought we would do so by soliciting the thoughts of Scott Young, MD, executive director of Kaiser Permanente’s Care Management Institute and associate executive director for Clinical Care and Innovation at The Permanente Federation.
“Easier?” said Dr. Young. “No, value-based payments don’t make doctors’ lives easier. But I think it does make the practice of medicine more rewarding and fulfilling.”
Accountable care demands that the system sync with the preferences and choices of the consumer purchasing the services. In order to get to real health value, consumer-patients must make the health care decisions that improve personal health and do not derail personal bank accounts. It was hard to piece these together for the last 15 years. Now, with high deductible plans, more transparency for costs, and on-time digital connectivity, there is less difficulty.
Information technology can deliver the needed information to the patient and the physician to improve not only the likelihood of improved care but also the time-to-achieve the outcomes. Most patients want and need to be involved in their care. There is evidence that giving patients access to their information results in higher levels of engagement and adherence to recommendations. In fact, the latest evidence shows that patients have been signing up for access to their health system portals at a rate of 1% per month for over 30 months.
The Health Care Blog recently featured our Open Letter to Primary Care Physicians,generating quite a bit of reaction. A commenter made the point that “we cannot expect” primary care physicians “to act differently until and unless they get paid differently.” [Emphasis added]
The comment refers to a doctor in solo practice and notes that “the first step is changing how you are paid, in one way or another. And there are many ways that work better than the current code-driven fee-for-service model.”
Does waiting for payment reform make sense? Or should primary care practices act now to change the way they practice in anticipation of payment shifts?
Moving Toward Value-based Care
Some physicians groups seem somewhat frozen – unsure exactly where health care payment is headed and thus waiting until there is a clearer signal.
But it seems to us that the payment reform signal grows louder and clearer and support for that contention comes in a recent research report* from McKesson, the international consultancy:
We can now say with certainty that healthcare delivery is moving in one direction: towards value-based care.
This is care that is paid for based on results – on measurable quality – as opposed to the traditional fee-for-service approach that pays for volume. McKesson notes that
The affordability crisis is causing unprecedented changes in the healthcare landscape, the most significant of which is the transition from the current volume-based model [fee-for-service] to myriad models based on measures of value.
To remain relevant and competitive, payers, hospitals, health systems, and clinicians must respond now to integrate value-based models into their existing systems.
There’s a growing view in U.S. healthcare circles that the industry is on the cusp of remarkable – perhaps even revolutionary – transformation. At a recent summit sponsored by the Altarum Institute’s Center for Sustainable Health Spending, speaker after speaker returned to the theme that we are slowly but surely moving from a volume-based system (paying for stuff) to a value-based model (paying for results).
The health sector is moving toward the traditional economic principles of other industries. Revenues flow to businesses that are high quality, efficient and knowledgeable about customer desires. In other words, high performers reap the financial rewards, not those that are simply doing more. We at PwC describe this future state as the New Health Economy.
Several stars have aligned to make this shift possible. Cost pressures have turned attention to getting our money’s worth in healthcare. Technological advances such as cloud storage, mobile devices and data analytics provide the tools to deliver the right care to the right patient at the right time. And consumers today have both the freedom and responsibility that come with making more decisions and spending their own money.
What was striking at the Altarum summit was the widespread agreement on where American healthcare is headed. Speakers referenced the rise of myriad alternative payment programs, including overall spending growth limits in Massachusetts, site agnostic payments for specialty care such as oncology and provider bonuses tied to patient satisfaction.