Where’s the Value in Value-Based Care?

By DirectorCorps

September 10, 2019 Healthcare Financials

Welcome to the age of value-based care. One of the biggest changes to healthcare for years has been the shift from fee-for-service to reimbursements based on the quality of care. How has that shift been going?

The Centers for Medicare and Medicaid Services has developed a series of payment models for different diseases and providers that follows both a carrot and a stick approach. Buried within the complexity are ways to incentivize lower-cost, better care for patients.

For instance, ambulances who provide services to Medicare patients can now take patients to alternative healthcare providers rather than the emergency room, when appropriate. And hospitals get dinged when they have excess re-admissions. The models are built so that the payor and the provider share the risk that care will be inadequate.

So far, initial results appear mixed. Critics don’t think the movement toward value-based payment models have yet to change healthcare, and there have been changes to address provider complaints. Safety-net hospitals that tend to service a sicker population of patients compared to other hospitals don’t want to be punished for it.

Managed care organizations also are interested in value-based payment models, but widespread adoption isn’t there, according to First Report Managed Care. Nearly 40% of healthcare executives surveyed by healthcare technology firm Change Healthcare believe it will be three to five years before the market comprises a significant amount of value-based relationships that include shared risk, according to a March survey.

Insurers UnitedHealthcare and Humana have found significant cost savings from their value-based payment programs, reporting both better outcomes and lower costs, according to attorneys with Robins Kaplan.

Another study, however, found Medicare patients admitted to hospitals actually re-visited the hospital at an increasing rate from January 1, 2012, to October 1, 2015 within 30 days of discharge, even as the government had started a program that penalized hospitals for re-admissions, according to researchers from Beth Israel Deaconess Medical Center.

Healthcare is one of the most-regulated and important industries in the United States. For the health of patients and the nation’s healthcare spending, it is vital to get this right.