By Ginny Weir, MPH, CEO

We have usually paid for health care in ways that encourage more services — whether they improved health or not – a fee for each service. Ten years ago, the Center for Medicare and Medicaid Innovation started testing payment and service delivery models beyond fee for service. The goal was to test and compare different ways to transform our system from one that pays for volume to one that pays for value. In We Won’t Get Value-Based Health Care Until We Agree on What “Value” Means, the author says, “turns out one reason there’s been such little progress in creating a value-based system is that the stakeholders in the U.S. health care system — patients, providers, hospitals, insurers, employee benefit providers, and policy makers — have no common definition of value and don’t agree on the mix of elements composing it (quality? service? cost? outcomes? access?).” We have traditionally defined value as quality divided by cost – sometimes multiplied by appropriateness; but value to who? As the mother of two young kids, I have spent quite a bit of time in the pediatrician’s office and while the care overall has been excellent (e.g., screenings, vaccinations, height, weight, recommendations of the book 1, 2, 3, Magic – yes it is magic), I also define value by the amount of time I have to wait.

In the article CMS Innovation Center at 10 Years — Progress and Lessons Learned, former chief, Brad Smith says that while some of the models that have been tested were associated with positive, tangible results, five resulted in financial savings and several others produced improved quality, the majority have produced neither. He lays out the following lessons learned as we continue to push for value: the difficulty in wholesale, system-wide change by allowing voluntary participation, issues with cost benchmarking with the multitude of other factors (e.g., inflation) that impact cost over time, inability to collect meaningful quality data from control groups in which claims data may be the only readily available source, and difficulty and errors in administering a different financial arrangement.

The article, Why Aren’t Value-Based Payment Models More Successful? A Failure To Confront Market Dynamics says “dynamics already in place around commercial plan-provider relationships; lopsided market leverage between “must-have” providers and health plans that cannot sell products without including those providers in their networks; and structural inequities in resources available to different providers” have been barriers to success while Value-based payment has produced little value. It needs a time-out argues that “wrong diagnosis [fee for service was not contributing to rising costs], no definition of what [Accountable Care Organizations] (ACOs) are expected do, requiring that ACO “members” be assigned rather than enroll, no evidence for the assumption that price and quality can be accurately measured” are barriers as well. In the Upshot, Dr. Austin Frakt points to financial incentives being too weak to drive change with too many diffuse measures being confusing for delivery sites to prioritize. He says that we have seen more singles than home runs and points to bundled payments and some of the ACOs as foundations for future growth.

We have the opportunity dive into these questions and address the critiques head on this Thursday as we close out our Value-Based Payment webinar series with Blowing up the Value Equation: Rethinking Value and How We Get There on October 6^th from 10:00-11:00AM PT. We will start with a conversation between myself and Dr. Drew Oliveira, newly Executive Director of the Washington Health Alliance then transition into a panel with Ashby Wolfe, MD, MPP, MPH, Centers for Medicare & Medicaid Services, Regional Chief Medical Officer, CMS San Francisco, Seattle and Denver Offices; Matt Stiefel, MS, MPA, Director, Center for Population Health, Kaiser Permanente Care Management Institute; and Nicole Saint Clair, MD, FACOG, Executive Medical Director, Regence BlueShield of WA. We will talk about whether our health ecosystem can accurately measure either cost or quality and how this shows up in our day-to-day work. Join us Click Here to Register.