januari 05, 2024
Rethinking Healthcare: Navigating the Uncomfortable Path of Value-Based Care
According to critics, a decade of value-based care (VBC) efforts have proven an abject failure, improving neither cost nor quality of healthcare. Over 50 VBC program implementations have collectively lost billions of dollars as compared to traditional fee-for-service (FFS) benchmarks, they say, and can boast little to no clear improvement in quality outcomes. In short, “there just isn’t any real value to be had in value based care.”
As a proponent of VBC, I’ve spent a lot of time learning from value based care experts on both the payer and provider side. And I can say that the critics are indeed right—from a certain perspective.
In aggregate, value based care has yet to produce the consistent, positive results that we seek. But VBC’s slow start is actually a reflection of the difficulty of transitioning away from our entrenched healthcare compensation system. What I have really learned from providers and payers is that value based care not only can work, but we must make it work, given the unsustainable path of healthcare spending.
We’re on a road to nowhere
Before we begin criticizing value based care, let’s look at the status quo. The current fee-for-service model is comfortable for providers because they know how and when they’ll be compensated and it’s comfortable for payers because they are experts at managing risk.
But public and private spending on healthcare is projected to climb from $4.4 trillion in 2022 to more than $7 trillion by 2031, outpacing GDP growth and averaging over $20,000 per American, annually. A full 25% of that expenditure is considered a waste, due to overtreatment, poor coordination, and other factors. Meanwhile, patient satisfaction is just 48% and 100 million Americans carry healthcare debt.
The status quo is comfortable, but it isn’t good. Value based care may not yet be performing that well across the board, but it is an alternative to continuing down this road to nowhere. Instead of criticizing VBC’s failures, we should learn from its successes. For me, there are three principles to illuminate our path forward: We must put patients in the center, let doctors be doctors, and get comfortable with the discomfort of change.
Put the patient back in patient care
Consider an elderly man who suffers from chronic respiratory disease, kidney disease, coronary artery disease and hypertension. Three specialists provide medications to treat the man’s conditions, but they rarely talk to each other. He tries to do everything they say, but he’s unable to cook healthy foods for himself and doesn’t understand when and how to take his medications. He no longer drives, he lives on a small pension and he has trouble attending all of his appointments. Once a month, the man ends up in the emergency room with chest pain, breathing difficulties, or nausea. All of this leaves him feeling anxious, depressed and alone.
While this is an imaginary example, there are millions of patients who face challenges just like these. Without value based care initiatives, these patients continue to suffer and cost the system billions.
Now imagine the same patient, but with coordinators who help him book medical appointments and arrange transportation. He receives dedicated education by a pharmacist and proactive medication reminders by a community health worker. He is given easy to remember action plans to proactively treat himself if he experiences shortness of breath, excessive urination, or other early warning signs. And he is connected to a meal delivery service that tailors his diet according to his conditions.
The man’s conditions stabilize. He is more energetic and clear-headed. His mental health and quality of life drastically improve. And because he no longer ends up in the emergency ward every month, his total cost of care declines, despite the additional support.
Let doctors be doctors
While my story sounds great for patients and payers, much of what I described are things that occur outside of the four walls of a clinic, in-between visits. Those things are not covered in the fee-for-service model. While we are focusing on the needs of patients, we can’t lose empathy for the struggles of healthcare providers. We need to find a way to let doctors be doctors.
Administration consumes 15-30% of total healthcare cost. Asking doctors to also provide high-touch support in between visits without compensation is impractical. Therefore, initial value based care models compensated doctors for these services, hoping they would reduce expensive tests, procedures, drugs, and hospital time. Unfortunately, that neither reduced cost nor improved quality. “It’s all carrots, without sticks,” said the critics. And they were right again.
And so, in the latest approach to value based care, providers share in the risks, not just the rewards. When a patient gets sicker and needs more treatment, part of that cost is owned by providers. Most agree that it is a more sensible approach. Large healthcare providers with the right technology and human resources are beginning to figure out how to deliver on the promise of VBC. Smaller players are recruiting help from focused third parties who can coordinate care and reduce doctors’ administrative load. However providers handle it, we need to make sure that the resources needed for value based care are available, so that doctors can get back to being doctors.
Get comfortable with being uncomfortable
Now we have carrots and sticks, but clearly there are no silver bullets. The old compensation system is so entrenched, this will take time and sensitivity to the needs of all healthcare constituents to get right. Instead of expecting value based care to work right out of the box, we need to lean into the discomfort that accompanies change, and continue to be curious and adaptive. Some of the questions to answer are:
• How to calculate per-patient capitation fees in VBC models, given the complexities of patient populations?
• Should there be a bundled care model on top of standard baseline care models to address acute patient needs like cancer and renal disease?
• Should per-patient fees be scaled according to provider size, so that those with large patient populations and more robust administrative resources take on more risk, while protecting smaller providers?
• Should new value-based programs contain a “grace period” to allow establishment of reasonable benchmarks on a per-provider basis?
• Are there ways to streamline reporting requirements to decrease administrative burden?
Changing healthcare requires a lot of creative rethinking. The system needs to empower providers and payers to deliver high quality care to patients, without going bankrupt. While we are figuring it out, the critics will have their say, and sometimes they will be right. But everyone that I speak to tells me this—we are getting closer. The journey may be uncomfortable and the critics may be loud. But we are worth it.
Photo: atibodyphoto, Getty Images
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