ON Wall Street, health leaders want to talk about “value -based care”. Since 2011, the term has appeared in profits 1,800 times, the health news website reported in early December.
The basic idea is to refund the provider for current health results. In some cases, the concept transfers financial risks and bonuses to providers based on performance standards, which is why some value -based care arrangements are also referred to as risk or risk contracts. The goal, in both cases, is to reduce costs for patients and provider alike.
“Value -based care” has also been connected to the country as well. In August 2020, Blue Cross Shield Blue based in Eagan Minelesota announced a six -year -old value -based payment agreement with Allina Health. “We have lived in a volume -based health care world, where the benefit of the disease is greater than the benefit of Wellness,” said Dr. Craig Samitt, then CEO I Blue Cross Blue Shield to Minnesota. He maintained value -based agreement as a “positive example of what is possible when health care plans and health care providers work in cooperation with common challenges to improve the physical, mental and financial health of our patients and members.”
As the agreement enters its fifth year, it remains to be seen whether those goals will be met in the long run in this specific case. Across the industry, deals like these have long been held as a balm on many issues that plague the American health system. However, while health systems and insurers require value -based care benefits, general health results in the US have not yet improved measurable. All the time, Americans still spend more on health care than any other high -income nation.
The shocking assassination of CEO by UNITEHealthcare Brian Thompson in New York City in early December, meanwhile, threw the long disappointments of many Americans with health insurance again in the spotlight.
Although some health care observers see value -based care potential, many say that strict value -based care arrangements remain stubbornly difficult to realize on a wider basis, despite their popularity among executives and analysts. This is because, in part, for a number of factors: complex legal concerns about data sharing between providers and payers, living choices of individual patients, wider social health determinants such as race and where you live, and many other factors that are similarly beyond the control of providers.
In some cases, too, there is not always a strong agreement for the correct definition of value -based care.
“Value -based care landscape is purely massive, and it can really mean almost anything,” says Ari Gottlieb, founder and director of the National Health Counseling Firm A2 Strategy Group. “As long as you are paying someone for something other than the service they are offering, that’s all value -based care.”
Value, not volume
Pushing for value -based care is not just a phenomenon of the private sector; By 2030, centers for Medicare & Medicaid (CMS) services aim to have 100% of Medicare beneficiaries in “Responsible Care Relations”, a specific type of value -based care agreement.
There has been a move to this goal, however ambitious. In 2023, 28.5% of all US healthcare payments – through trade and federation -funded plans as Medicare – were concluded through the risk risk contracts, according to the learning network and the action of health care, which traces alternative payments in the health care sector.
“Progress has made progress, but it is not as far as any of us predicted,” says Jean Abraham, a professor at the University of Minnesota Public Health School.
What many Americans can agree on is that we are spending a lot on health care for different results. According to federal data, healthcare costs at the USA listed 7.5% in 2023, in $ 4.9 trillion. This equates to about $ 14,570 per person – about 17.6% of the country’s gross domestic product.
However, more money has not led to better health results. Among the high -income nations from peers, the US has “the lowest life expectancy at birth, the highest levels of death for avoidable or treatable conditions, the highest mortality of mothers and infants, and among the highest levels of suicides”, according to a January 2023 report by the New York Commonwealth Fund.
Although the prospects for a universal American health care system such as those in the UK and Canada remain impossible in the short term, the federal government remains the largest payer of health care in the country. This means that the direction of Medicaid and Medicare matters for both trade payers and health care providers.
Gottlieb attributes some of the popularity of value based on the goals of the federal government, though it is not immediately clear what direction will take CMS under Trump 2.0.
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“The government has pushed it” during the Biden administration, says Gottlieb.
Wrong stimuli
While some industry observers see it, one of the biggest obstacles to the implementation of value -based care is the historical incentives of the American health system. For most of the modern era, providers are stimulated for urgent care, says Dr. Tim Sielaff, an executive associate at the University of St. Thomas’ Business College and former medical officer at Allina Health.
“Wonderful things happen in hospitals, dozens of times every day,” says Sielaff, mentioning that providers are “really good in the care of salvation.” But simply, hospitals are not necessarily stimulated to reduce the number of patients who occupy beds, for example. Abandoning salvation care, of course, is not really an opportunity.
It is a complicated problem that Sielaff describes as “technical and adaptive”.
“In my work by being a doctor to be an executive, is the approximation of stimuli throughout the continuation that is the main complexity that has not been resolved so far,” says Sielaff. “I don’t see it being extremely different from 20 years ago. The same issues are there.”
Then there is the issue of patients’ choices associated with social determinants of health – that is, many non -masked factors that affect one’s health. A doctor may strongly advise a patient to abandon smoking, but that does not mean the patient will follow. “We are asking providers to do a lot because we know those things also matter to spending and use,” says Abraham.
Sielaff says the advent of value -based care can be seen as a result of the Movement to HMO (health maintenance organizations) in the 1990s. The basic idea is to limit coverage to providers with an HMO. While any patient who has had to seek “network providers” these days may prove, some principles of this model remain today.
An attempt to reduce waste
No one discusses that there is waste in the health system today – tests or procedures unnecessarily, mirdiagnoss, duplicate documents. The list goes on. “The problem with waste,” says Sielaff, “is that someone is taking advantage of him.”
Value -based care evangelists say their model, if applied to a larger scale, can eliminate or reduce these factors.
“The problem with waste is that someone is taking advantage of him.”
—Dr. Tim Sielaff, Executive Comrade, University of St. Business College Thomas opus; Former Main Medical Officer Allina Health
“We see value based on value as an opportunity to bend the lowest cost curve for Minototans,” says Logan Nesse, President and CEO of Minnesota Health Plans Council, a trading group representing local non -profit health plans, including Medica, Ucare and Blue Cross Blue Shield. “Numerous studies have recognized a large part of the spending – approximately one -third – in health care services that are unnecessary or minimal for the patient. This adds costs, including out of pocket, for Minototans.”
He showed a 2017 report from the Minnesota Health Department that cited diagnostic images of “uncomplicated headache” as one of the most common and costly low -value services.
“Historical payment agreements based on the volume of services have served as a financial incentive to make them in the first place,” Nesse says. “Value -based care agreements approximate better incentives to support efficient, cost effective care.”
More data, more problems
Data sharing between providers and payers represents another major obstacle to the implementation of more value -based care arrangements. If payers do not have all the data they need for lifestyle, for example, to determine a patient’s health results, how can they know how to refund the provider? The Cross-Ollina Blue Partnership represents a possible response, but also illustrates how many possible solutions are based on parts between individual providers and payers.
“The provider themselves do not like the data to go beyond their health systems,” says Stephen Parente, a professor at the University of Minnesota University School, who studies the health economy. “They don’t want it to flow freely into an insurance company or another group of third parties to see what’s going on there.”
The advent of electronic medical records can one day help mitigate the issue of data flow, leading to more valuable -based care models, says parenting, but this will require a severe amount of legal negotiations between all providers, payers and patients.
If the health plans council argues that Minnesota may be in a better position than many other states to do so. “Minnesota is known to have some of the best collaborations in the country between providers and insurers,” he says. “Systems apparently useful for implementing agreements, but success outside this model, as evidenced by the BCBS agreement with Allina, shows that it is not a must.”
Whatever the future of value -based care, most observers agree that it will not happen quickly. The health care systems themselves do not necessarily have an interest in transforming their operations. It can take another big break like Covid to force change, some observers say.
“Markets cannot be transformed overnight. Probably probably a 10-20-year-old journey, ”says Gottlieb.