By Thomas W. Feeley, M.D. and Namita Seth Mohta, M.D.
NEJM Catalyst, November 8, 2018
In a survey of the NEJM Catalyst Insights Council in July 2018, sponsored by Optum, 42% of respondents say they think value-based reimbursement models will be the primary revenue model for U.S. health care. Indeed, this transition is already happening. Respondents report that a quarter of reimbursement at their organizations is based on value, on average. While three-quarters of their revenue remains fee-for-service, we see a remarkable change to a reimbursement system that was static for decades.
In particular, survey respondentsā organizations are pursuing two value-based strategies: accountable care organizations, which often use capitated payments; and bundled payments, which provide single payments for multiple services addressing a single condition.
Nearly half (46%) of respondents ā who are clinical leaders, clinicians, and executives at U.S.-based organizations that deliver health care ā say value-based contracts significantly improve the quality of care, and another 42% say value-based contracts significantly lower the cost of care. While this data suggests considerable support for value-based reimbursement, it is worth mentioning that a significant number (36%) of respondents say they are uncertain that this will ever become the primary revenue model for U.S. health care, indicating that for many, the jury is still out.
This finding deserves some informed speculation. Some respondents may want to adhere to the fee-for-service system. Others may want to see more evidence that value-based reimbursement actually improves outcomes and controls costs. Others may be unfamiliar with what value-based reimbursement actually represents. All of these concerns we have heard repeatedly over the past several years, and they are reflected in verbatim comments from survey respondents.
Clinicians, in particular, have reservations about value-based reimbursement. Fewer clinicians (37%) and clinical leaders (39%) than executives (51%) say they think value-based reimbursement will be the primary revenue model of the future. Fewer clinicians (38%) than executives (55%) and clinical leaders (47%) believe that value-based contracts significantly improve the quality of care, and fewer clinicians (36%) than executives (50%) and clinical leaders (42%) think value-based contracts significantly lower the cost of care.
As with several other questions in this survey, a significant number of respondents are undecided. More than one-third (37%) say they neither agree nor disagree that value-based contracts significantly improve the quality of care, and 41% neither agree nor disagree that value-based contracts significantly lower the cost of care.
To us, this survey suggests that many in health care see value-based reimbursement as a real solution to the nationās current health care crisis. Until payers and providers become better aligned, however, there will be challenges in scaling and accelerating this approach. The survey participants say what is needed is a better understanding of value and better ways of assessing value. Collectively, we must measure outcomes that matter to patients seamlessly in the workflow, through advances in information technology, and then reward those outcomes in a value-based reimbursement system.
Thomas W. Feeley is a Senior Fellow at Harvard Business School and former Head of the Institute for Cancer Care Innovation at the University of Texas MD Anderson Cancer Center.
Namita Seth Mohta, MD, is the Clinical Editor for NEJM Catalyst. She practices internal medicine at the Brigham and Womenās Hospital and is faculty at The Center for Healthcare Delivery Sciences and at Harvard Medical School.
Analysis of the NEJM Catalyst Insights Council Survey on the New Marketplace: Transitioning Payment Models: Fee-for-Service to Value-Based Care, sponsored by Optum. Qualified executives, clinical leaders, and clinicians may join the Insights Council and share their perspectives on health care delivery transformation.
Comment:
By Don McCanne, M.D.
This resource represents the views of leaders in the health care industry. It shows, once again, that value-based health care is a business concept rather than a patient care concept. Wrong priority.
We are off and running with value-based care primarily because it is being controlled by the people who move money around rather than the people who ensure the health of their patients.
We have serious problems in health care. Too many are left out. Too many face excessive financial barriers to care. Too many are deprived of their choices of health care professionals and institutions. The value-based models will do nothing to correct these deficiencies. What will? Single Payer Medicare for All. Let’s shift our priorities and efforts to a model that really will work.
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