May 14

What is "Value-Based Care"?

Updated: May 15

By Martine G. Brousse (not AI!)

"The Medical Bill Whisperer"

Patient Advocate, Certified Mediator

AdvimedPro

May 14, 2024

In a separate blog, I explored the way the healthcare system works, from care-providing to reporting to payment. Based on the “Fee-For-Service” (“FFS”) model, it calculates a value and price for every single item, procedure, service, drug, visit, lab, report, test on a case-by-case basis. Care is based on Quantity of service, not necessarily Quality.

“Value-Based Care” is a system which aims at replacing the FFS system to streamline medical care, improve health outcomes while lowering costs.

A. What are the goals:

1. Best use of resources

· More services have not led to a healthier population, on the contrary. While specific reasons are highlighted in my separate blog on FFS, it is enough to say that of all developed countries, we have the unhealthiest population while overusing diagnostic and therapeutic resources

· Streamlining care through cooperation and communication between providers, so that duplicate services and wasted efforts are eliminated

· Reporting of how services are used can lead to better protocols, more efficiency and lower costs

2. Improved healthcare

· Payment based on results should eliminate the “defensive medicine” and “conventional medicine” frameworks, which are routine for physicians trying to avoid medical errors (and lawsuits) and sticking to protocols established without much thought for costs or less aggressive alternatives

· Data collection and analysis will lead to standards of care more efficient, less stress on patients to undergo duplicate or useless procedures/tests, better quality of care and life

· more focus on prevention and lifestyle changes before chronic or serious conditions develop will be encouraged

3. Cost containment:

· Fewer services save $

· More efficient medical protocols lead to faster, less aggressive but better outcomes and money saved

· Prevention efforts are cheaper than treating chronic conditions

· All parties win

B. Who is concerned?

1. The parties involved and concerned are many:

· Medical providers from Drs and therapists to hospitals, and everyone in between

· Practice and hospital administrators

· Insurance companies, both commercial and government-run

· Supportive entities (billing services, TPAs, etc)

· IT systems: Electronic Medical Records, Electronic Health Records, reporting, etc

· Coding, Billing and Payment systems

· Employers (especially those under ERISA, or self-funded plans)

· Legislators at State and Federal levels

· And of course: patients and their families

2. The appeal and promise of VBC for patients is great:

· Better medical care

· Improved and optimum health outcomes

· Best individualized clinical protocols

· Easy, prompt access to care

· Lowest costs

C. Some examples

While we are still far from total implementation, efforts have been under way for a good number of years, especially under the helm of CMS, the Center for Medicare and Medicaid Services.

Their spearheading measures have already led to test implementations, and feedback.

Some examples already in place are:

1. “Capitation”

· In this model, used for years in the HMO setting, a medical provider gets an advance set payment in exchange for providing a range of service to one patient. Even if the patient never needs any service, the provider still gets to keep the payment. If a patient’s care requires many services, the provider may lose financially.

· Usually, less complex, more routine or preventive care services, or those rendered by a Primary Care Physician are included. Some injections, immunizations, routine treatments, anticipated measures, screenings, diagnostic care also are.

· If referrals must be made for specialists, the capitated physician may be financially liable by losing part of their capitation.

· The advantages: contained and better managed care as one provider manages the overall services, less errors, less waste and less duplication of services, more controlled and therefore lower costs for patients

· The problems: care can be too contained or more costly measures disapproved, HMO patients routinely complain about lack or slow access to specialists or higher-level care, less specialized or informed provider (PCP) responsible for managing care above their competence may provide sub-par care.

2. “Pay for Performance”

· In this model, medical provider get paid a bonus when meeting certain performance criteria.

· Clinical outcomes and therefore bonuses are based on meeting set reporting measures that evaluate quality of care, efficiency, reduced risks, changes in lifestyle after counseling, and clinical benchmarks.

· The advantages: priority on preventive care and lifestyle changes before chronic or serious conditions set in, less waste and duplication of services as everything is tracked, better controlled costs for patients

The problems: value indicators and data reporting metrics can be arbitrary, too general and not addressing specific needs and health status of individuals, care becomes driven by outside perimeters, goals can be too short-term as they are meeting a specific reporting deadline is the motivation.

3. “Accountable Care Organization” (“ACO”)

· Only in place for a portion of Medicare/Medicaid members at this time, this is being tested as “the” model of the future.

· While there are sub-species of ACOs, the overall idea is for a group of hospitals and medical providers to associate in order to coordinate high quality, lower cost care to a group of patients under their umbrella

· ACOs earn financial incentives when delivering care that keeps patients out of ERs or hospitals, reduces the number of inpatient days, balances “sick” care with preventive measures, and improves individuals’ overall health status and outcomes

· The advantages: Due to high coordination and communications among treating physicians, duplicate services are eliminated, costs are lower and patient experience can be improved

· The problems: reporting measures are for a general population and may not apply or be skewed for many individuals, choices of providers are limited to within the ACO, maintening extensive coordination between many providers can be difficult.

D. Some concerns:

1. A number of medical associations have raised concerns:

· Increased paperwork to report so many measures and benchmarks

· Limited use of clinical parameters to assess quality

· What about sicker or non-compliant patients whose data can negatively affect a provider’s rating and income?

· Goals are too short-term and set to meet deadlines, not always realistic

· Inter provider cooperation and communication is difficult and time-consuming to set up and maintain on a case-to-case basis

· What criteria and who determines feedback and suggestions for improvement?

· Adaptation to yet another major change will take efforts and time on the part of medical providers who are already stressed to the limit

· Conflicting medical goals can be expected, what happens then?

· “Directed care” can be encouraged over comprehensive care

· Standardized reporting measures are too restrictive, too narrow and too generalized

· Costs will still guide medical care, because income will be based on criteria established by insurance companies and external administrators, not standards of care

· What about negative financial consequences for providers when their patients meet unintended, uncontrollable medical events lowering the outcome scores, or for populations too sick too recover or improve?

E. But…

· The existing FFS system is not working, from patients to legislators to insurers to medical providers, it is too costly, too inefficient and medically failing.

· While the VBC model is only testing, has shown limitations, has exposed problems on several levels and will take time to be fully operative and beneficial, its aims and goals must be met if the US healthcare system is to survive financially, and patients to receive the best medical care they deserve and pay for.

· While the “Medicare for all” model remains a talked-about alternative, its implementation, if/when accepted and legislated, would require years and would likely meet with resistance and delays.

· Medical providers' reluctance to change their payment structure and lack of enthusiasm at adapting to new landscapes have been known to slow down implementation of new protocols and systems, and while their concerns are legitimate and confirm many patients' complaints, their acceptance and adaptation will be a major determining key.

Martine Brousse was a long-time Billing Manager for Physicians before switching to the side of patients in 2013. The move has allowed her to apply her deep expertise and vast experience of the intricacies of resolving all types of medical bill and claim payment issues in