The transition to a value-based payment system in healthcare is clearly accelerating. For years, buzzwords like “value” and “outcomes” have been the core drivers of a future “brave, new world” in healthcare delivery, which would someday supplant the traditional fee-for-service model. Exactly how and when the transition would occur has seemed uncertain and vague. Now, the road forward is less murky thanks to last week’s announcement of the Health Transformation Alliance.
Twenty prominent employers — including American Express, Caterpillar, Coca-Cola, HCA, Macy’s, Shell Oil, and Verizon — have decided to pool their data on the 4 million lives that their respective health plans cover. The aggregated data includes both costs and outcomes of treatments.
Through linking outcomes and costs (i.e. value), the newly formed alliance hopes to identify providers and practices who deliver high-value care for certain illnesses. Then, by steering employees to these “best practices,” the Health Transformation Alliance companies hope to bend the healthcare-cost curve and make employer-funded healthcare sustainable. The undesirable alternative is increasing copays and deductibles or reducing employees eligible for healthcare by reducing work hours.
One of the key mechanisms driving the shift to a value-based payment system in healthcare is the rise of employer-managed health plans, in which employers carry the risks associated with waste and poor outcomes exclusively. While high degrees of waste and poor quality would certainly negatively impact an employer’s bottom line, being self-insured represents a tremendous upside opportunity as well.
Many employers, such as Boeing and Intel, have partnered with health systems, such as Virginia Mason, to create value-based reimbursement models. Collaborations like that of the Healthcare Transformation Alliance provide insights to the entire supply chain that was previously a black box, controlled solely by large payers.
In a value-based payment system, the onus will be on physicians and healthcare organizations to demonstrate superior clinical outcomes at competitive costs, which will require organizing clinical work along the best evidence-informed practice guidelines and routinely collecting meaningful clinical outcome data. Standardizing routine care with accepted guidelines should reduce costly and unnecessary variation in clinical practice.
Publishing and simply distributing guidelines hasn’t been very effective in changing practice. Integrating clinical decision support (CDS) into the electronic medical record (EMR) facilitates actual utilization of practice guidelines, and user-friendly EMR and real-time CDS lead to practitioners’ adoption of those guidelines. Careful design of the workflow by healthcare providers with input by frontline clinicians improves efficiency and productivity, while not compromising the patient-physician interaction. Integrating systematic collection of patient outcome data into the process is critical to an ongoing reassessment of the clinical algorithm.
Clinical transformation to the value-based model is a challenge best met by providing the clinicians with the tools to assist in delivering and documenting the best evidence-based care in a patient-centered environment. The EMR “done right” is at the center of the process.
As employers assume more risk, they will want to incentivize good health behaviors amongst their employees. A number of companies are exploring services that compensate employees financially for healthy behaviors. Employers, especially those that are self-insured, will also be highly interested in innovative ways to drive adoption of healthy behaviors amongst their employees and help employees manage chronic diseases.
As for tech solutions, wearable technology to track body mass index, blood pressure, and even glucose will be an important element. Mobile applications such as those that provide simple reminders to a diabetic patient to check blood sugar provide immense value. For chronic heart failure patients, applications that monitor weight (fluid) can provide physicians with meaningful information that can guide medication adjustments. Both of these examples will reduce the number of costly hospitalizations and thus make self-insured employers happier in a value-based world.
Health policy challenges will accompany the growth of these types of applications. Protecting patient privacy while increasing interoperability will be key toward achieving success with these types of technologies. Last but certainly not least, regulatory concerns are undoubtedly associated with financially incentivizing employees to participate in these types of programs. The way to a value-based payment system in healthcare might be clearer but will still include some challenges.