Value in Medical Care

The New York Times, Letter, December 22, 2015

To the Editor:

We applaud expanding reimbursement analysis beyond Medicare data to include commercial insurance.

It is essential to differentiate locally provided care from complex specialty care best provided by destination medical centers. Future payment models should recognize making an accurate diagnosis, providing appropriate treatment and achieving the best results.

It will be through a commitment to work collaboratively that payers, providers and policy makers build a sustainable, value-based health care delivery system in our country.

John H. Noseworthy

President and Chief Executive
Mayo Clinic, Rochester, Minn.


Payment for Medical Care

The New York Times, Letter, December 29, 2015

To the Editor:

I take issue with the “value-based payment models” for medical care promoted by John H. Noseworthy, the president of the Mayo Clinic, in his letter to the editor (“Value in Medical Care,” Dec. 22).

When he says, “It is essential to differentiate locally provided care from complex specialty care best provided by destination medical centers,” is he suggesting that his destination medical center should be paid more than local care providers for the same work?

It is my understanding that all doctors are being evaluated equally on the accuracy of their diagnoses, the appropriateness of their treatments and the quality of their results. They should be paid accordingly.

Value-based payment models are used by the pharmaceutical industry to justify a drug price many times greater than the cost to bring it to market and manufacture it. The drug company decides how much “value” its drug provides to the patient who takes it.

Let’s not allow major destination medical centers to follow the same model. Better yet, let’s reverse the trend entirely.

Robert D. Schrock Jr.
Chapel Hill, N.C.

The writer is a retired orthopedic surgeon.

It seems that the current policy fixation in health care reform is on paying for value instead of volume. This really plays into the hands of the medical-industrial complex.

Currently the pharmaceutical industry is leading the way. A prime example is the new, outrageously priced drugs for hepatitis C. In explaining why the prices are so high, representatives of the industry indicated that the new standard for drug pricing should not be simply the usual costs such as research and marketing, but rather they should be priced on the value provided – the value of preserving quality of life that would be lost with progression of disease, and the value in preventing expensive care in the future, such as liver transplants. These executives have to gall to claim that the monetary value of the preservation of quality of life and the aborted potential future health care costs should accrue to them and their shareholders.

By that same reasoning, many of the high priced cancer therapy drugs should be repriced at pennies on the dollar since they have an almost negligible benefit on the quality of life, and they actually increase the cost of cancer care simply because of the very high prices of the drugs themselves along with the costs of administering and monitoring them. Of course, then instead of pricing based on value, they resort to their fallback position of the high cost of drug research and other corporate expenses, like executive compensation (plus an extra bonus because this is CANCER, after all).

Of great concern, the pharmaceutical industry was successful in including in the Trans-Pacific Partnership Agreement (TPP) this concept that “value” be included as a legitimate basis for determining the price of drugs – pocketing greater profits for this nebulous add-on to the drug itself.  This is one more reason that TPP should not be approved in its current form.

Now the president and CEO of Mayo tells us that the complex specialty care provided by “destination medical centers” implicitly is of higher value and thus presumably should be rewarded more highly through value-based payment models. If they offer unique specialty care that is not offered at other centers, then payment based on costs plus a fair margin would be appropriate. But care that duplicates quality care available in the community should not command higher prices.

We cannot underestimate the uncanny ability of the medical-industrial complex to innovate with policy concepts to further their own pecuniary interests.

This concept of rewarding value instead of volume has led to the implementation of numerous payment models that are backed by not much more than “wish-it-would-work” concepts from the policy community; the initial evidence of benefit is extremely limited. We know single payer works. That’s what we should be implementing instead.

If you wish more information, yesterday’s message, “No more SGR, but… here you go!,” discusses some of these wish-it-would-work concepts such as Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs) supposedly rewarding value instead of volume:…-here-you-go