By Louise Marie Roth
The Hill, November 16, 2018

I was in Canada this past June when I broke my wrist and had to go to the ER. They were fast and professional and the bill was much lower than what American ERs charge you just for walking in the door.

Under single-payer health care, you can see the savings on administrative costs with your own eyes. When you walk into physicians’ offices in Canada, they have a small administrative staff, often consisting of one person behind the counter.

They don’t need to employ extra people to fill out dozens of different forms for various insurers with multiple plans, all with different copays, deductibles and coverage. There are no copays or deductibles and everyone knows the rules for what is covered and how to bill the provincial insurance plan. They don’t need staff to spend hours fighting with insurers about which services or medications they will cover or how much they will pay.

Meanwhile, the U.S. pays more than twice as much per capita for health care ($10,348 in 2016) than Canada ($4,752), Australia ($4,708), or the UK ($4,192), but has lower life expectancy and higher infant and maternal mortality rates even compared to some less developed countries.

As someone who grew up in Canada and moved to the United States more than two decades ago, I have seen firsthand that American health care is expensive, unequal and inhumane – and that there is a better way that costs less, is more equitable and covers all pre-existing conditions. It’s time to solve this problem with single-payer health insurance, so that everyone gets care regardless of their ability to pay.

In this year’s midterm elections, health care was a top issue for American voters and nearly 60 percent favored Medicare-for-all. Now that the Democratic Party is poised to take over the House, it’s time to move forward. The most likely next speaker, Nancy Pelosi, said that all health-care options are “on the table,” and 123 Democratic representatives in the House are co-sponsors of Medicare for All legislation.

Even though the ACA was an inferior solution compared to single-payer, the result is that a growing number of Americans once again lack adequate health insurance.

Of course, Republicans, including President Trump in a recent USA TODAY oped found to have many fact errors, are fighting Medicare for All by calling it “socialism.” But when I ask my students if they would prefer a capitalist fire department, where firefighters only put out a fire if you have up-to-date private insurance or can pay the bill, they think that a taxpayer-funded socialized fire department is a much better idea. They do, however, worry that single-payer health care would not work in the U.S. because of its larger population. They usually don’t know that the U.S. already has socialized medicine in the form of Medicare and Medicaid, which covers more than 30 percent of the population. If federal and state governments can cover more than 30 percent, then why can’t they simplify the whole system and cover everyone?

Single-payer is simply the most efficient and most humane way to cover everyone, including those with pre-existing conditions, which many people have through no fault of their own.

My oldest son had a vascular malformation in his brain and needed brain surgery when he was six. Fortunately he is doing fine now but, as the federal government removes more and more of the protections under the ACA, I wonder if he will be insurable when he is no longer covered under my insurance. Why should he be unable to get insurance or have to pay exorbitant premiums when he did nothing to cause his medical history? Luckily he has an anchor mom – he can always move to Canada. Not everyone has that option.

Dr. Louise Marie Roth is an associate professor of sociology at the University of Arizona and a Public Voices Fellow with The OpEd Project. She teaches medical sociology and is writing a book about maternity care in the United States.

https://thehill.com…

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Comment:

By Don McCanne, M.D.

The author is an academic sociologist from Canada who lives and teaches in the United States. Her lightly edited op-ed is reproduced here since it represents a highly credible, expert view on why the United States should enact and implement a Single Payer Medicare for All system much like Canada’s rather than perpetuate our overpriced and underperforming health care financing system based on ACA.

Would it be that we were all as intelligent and discerning as her, we would make the change now.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Steffie Woolhandler and David Himmelstein
Health Affairs Blog, November 19, 2018

Single-payer reform is in the news — and in the U.S. House and Senate. One hundred twenty-three Congresspeople have signed on as co-sponsors of H.R. 676, the single-payer legislation in House of Representatives, and 16 Senators have formally endorsed S.1804, the Senate version. (Disclosure: H.R. 676 was closely modeled on the Physicians for a National Health Program reform proposal published in JAMA, for which we served as lead authors).

While both bills would cover all Americans under a single, tax-funded insurance program, they prescribe different provider payment strategies. The Senate version largely adopts Medicare’s current payment mechanisms; the House bill’s is modeled on Canada’s single-payer program, also called “Medicare,” which pays hospitals global budgets (much as a fire department is paid in the U.S.) and sharply constrains opportunities for investor-owned care.

These differences haven’t attracted much attention from politicians or the press, and few patients are aware of, or deeply concerned about them. That’s not surprising, since both bills address the lay public’s most pressing payment-related concern: they would drastically shrink (S.1804) or completely eliminate (H.R. 676) out-of-pocket payments for needed care.

But these divergent payment strategies would create very different financial incentives for providers, shaping the culture of medicine and the financial viability of a single-payer reform. The Senate version would, like Medicare, pay hospitals and other institutional providers on a per-patient basis, intermixing payments for current operating expenses with funding for future capital investments and profits. As at present, hospitals’ success, and even survival, would depend on generating profits (“surpluses” in non-profit facilities). Hospitals with a favorable bottom line could invest and add new buildings and programs, while unprofitable ones couldn’t modernize or expand, risking a downward spiral toward takeover or closure.

It’s this profit imperative that drives hospitals’ financial gaming, e.g. upcoding, and concentration on the most lucrative services, such as elective cardiac and orthopedic services, rather than money losers like mental health. This payment mechanism (and S.1804 as a whole) also leaves the door open to investor-owned providers.

In contrast, the House bill would abolish per-patient billing by hospitals and other institutions, and its global budget payments would cover only operating costs; hospitals would be prohibited from retaining surpluses, and capital investments would be funded through separate government grants. The bill would also explicitly proscribe payments to investor-owned facilities, and it calls for their conversion to non-profit status financed by issuing bonds.

Implications For The Financial Viability Of Reform

Expanding and improving coverage, as both S.1804 and H.R. 676 would do, is expected to increase care utilization and hence clinical costs. Yet most analysts foresee savings on billing and administration (as well as on prescription drugs prices) that would offset these increases. Both bills would replace the current welter of private plans—with average overhead of about 12 percent of premiums—with a single public insurer whose overhead would likely be similar to the traditional Medicare program’s 2 percent, or the 1.6 percent in Canadian Medicare (National Health Expenditure Trends, 1975 to 2017: Data Tables — Series A).

But insurance overhead accounts for only 44 percent of the administrative savings that could be realized under a single-payer program; the rest comes from streamlining providers’ administrative work. For instance, U.S. hospitals’ administrative costs average 25.3 percent of their total revenues, versus only 12 percent in single-payer systems like Canada’s and Scotland’s that pay global operating budgets and minimize rewards for financial gaming.

Medicare’s payment approach requires hospitals to bill for and justify each hospitalization, a requirement that persists in value-based payment schemes like ACOs and would continue under S.1804. Hence, hospitals would have to maintain much of their current wasteful billing, documentation, and internal cost-tracking systems. Retaining the profit imperative would also continue to reward hospitals for financial gaming and tailoring services to profitability, driving up both administrative costs and wasteful spending on low-value care.

Instead of bundled payment arrangements tied to individual patients, the House version would substitute an institution-wide bundled payment, i.e., a global budget covering all operating costs. As noted above, that approach has streamlined hospital administration in other nations, which have been more effective than the United States at restraining overall costs. In contrast, ACOs have increased providers’ administrative costs by about $200 per patient annually, and have generated trivial or no savings after accounting for Medicare’s “shared savings” bonus payments. Similarly, Medicare’s (and other payers’) pay-for-performance initiatives impose substantial administrative costs on providers, with no evidence that they’ve improved patients’ outcomes in any setting.

In sum, the financial viability of a single-payer reform turns on cutting administrative costs and minimizing incentives for financial gaming. Maintaining Medicare’s current payment strategies, as under S.1804, would be substantially costlier than adopting the non-profit global-budgeting strategy used in several other nations.

Implications For Medical Culture

Differences in payment strategies also have implications for the work lives of doctors and other clinical personnel. Medicare’s turn to ACOs effectively forces providers to become insurers who bear the risk of their patients’ medical expenses, even those incurred in other venues. This strategy virtually banished small independent providers, triggering a wave of mergers and acquisitions. Community hospitals have been gobbled up, and a rapidly growing share of doctors have become employees.

The profit imperative imposed on hospitals and physician practices by Medicare’s payment incentives filters down to doctors. It manifests as morale-sapping productivity pressures; redundant documentation requirements; time wasted on mandatory upcoding classes; and the sense that clinical priorities have become subservient to financial ones. The length of doctors’ notes in EPIC’s electronic health record—larded with clinically useless templated and copied material, and four times as long in the U.S. as in other nations—gives one indication of how payment rules translate into burnout.

The Senate’s version risks maintaining these ACO-driven incentives, and even risks the reemergence of private insurance under the guise of vertically integrated, risk-bearing corporate ACOs.

The Future Of Investor-Owned Care

The House single-payer bill envisions a buyout of the investor-owned facilities needed to provide care under the single-payer system, while the Senate version would leave them in current hands.

Proponents of the House approach acknowledge that many non-profit health care organizations have drifted far from their charitable roots. However, they cite evidence that for-profit providers (including hospitals, dialysis centers, nursing homes, home care agencies, and hospices) provide inferior care at inflated prices (see, for instance here, here, here, here and here – use URL below to access live hyperlinks) and are more likely to bend care to profitability (see here, here, here and here). For-profit hospitals spend less on nurses and other clinical aspects of care, but more on administration and financial management; for-profit chains have often been cited for questionable business practices and have been repeatedly implicated in large scale fraud (see here, here, here and here).

According to CMS, for-profit nursing homes are cited for quality deficiencies 28 percent more often than non-profits, and for deficiencies that place residents in immediate jeopardy 53 percent more frequently. Investor-owned home care agencies cost Medicare $752 more per patient than non-profit agencies, while providing worse care.

Yet even some who would prefer to exclude investor-owned facilities from a single-payer system worry about the cost of a buyout. In conversations with Congressional aides, some have suggested that these costs could amount to $1 trillion or more, although none could cite a source for that figure. While it’s not clear exactly how to value the assets of investor-owned medical facilities, estimates of their current capital assets and of their stock market valuations provide some guidance.

In the detailed cost reports filed with Medicare covering fiscal year 2016 (the most recent year for which virtually all reports are available), all for-profit hospitals taken together reported total capital assets of $97.845 billion at the start of the year, and additional purchases totaling $7.453 billion (Himmelstein & Woolhandler, unpublished analysis of hospital cost reports). So the total capital stock of all for-profit hospitals – including not just acute care hospitals, but most other inpatient facilities besides stand-alone nursing homes – totaled $105.298 billion. (The comparable figure for non-profits is $718.628 billion).

Since most investor-owned providers also carry debt, it’s not surprising that the capital asset figures are considerably higher than the stock market value of the firms that own the facilities. As indicated in Exhibit 1 (use URL below to access exhibit), the market valuation of the five publicly-traded firms that account for the vast majority of for-profit hospitals totals $50.071 billion. While data on the market value of the (smaller) privately held for-profit hospital chains is not available, the value of the larger chains, and past sale prices for three of the privately-held firms, suggests that they’d add only several billion to the total.

Similarly, as Exhibit 1 shows, the total value of shares in publicly traded nursing home firms, rehab, dialysis, and home care and hospice providers is relatively modest: less than $50 billion. And these valuations (which fluctuate from day-to-day) include aspects of the businesses that would not be included in a buyout, e.g. the value of real estate devoted to senior living communities, or the roughly 15 percent of DaVita’s business that’s unrelated to dialysis and the 20 percent of Fresenius’ revenues attributable to sales of products such as dialysis supplies.

Overall, the fair market value of investor-owned facilities covered by a buyout, whether assessed by capital stock or stock prices, seems unlikely to exceed $150 billion. Purchasing these assets using Treasury Bill financing over 15 years at the current interest rate of 3 percent would cost about $12.75 billion annually, equivalent to about 1 percent of annual hospital costs. Moreover, even in the short term, some or all of these costs would be offset by savings on profits, which totaled more than $6 billion in 2017 for just three of these firms (HCA, DaVita and Fresenius).

Bottom line: A buyout of investor-owned facilities is affordable. Indeed, it might well lower costs.

Looking Forward

In the short run, the divergence between the House and Senate versions of single-payer reform is of little consequence. No bill will be enacted under the current administration. Yet with support for single payer blossoming among Democratic leaders and the public, the prospect of legislative action is increasing, and with it the push for convergence. Indeed, Pramila Jayapal, the leader of the House Single-Payer Caucus, has indicated her intent to move the two bills closer together.

In aligning the bills, House members should, in our view, adopt some aspects of the Senate’s bill, notably its repeal of the Hyde Amendment that forbids using federal funds for abortion, as well as its greater specificity. But Senators should adopt the House bill’s payment strategies and commitment to non-profit ownership of health care providers.

https://www.healthaffairs.org…

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Comment:

By Don McCanne, M.D.

This Health Affairs Blog post by PNHP cofounders Steffie Woolhandler and David Himmelstein explains the differences between the House and Senate versions of Single-Payer Medicare for All legislation, and why it is important that they be aligned in a manner that gets the policy right.

Because of the importance of the topic, the article is presented in its entirety, but the electronic version accessible at the Health Affairs website also provides important hyperlinks plus an exhibit itemizing market value of investor-owned health care providers. You may want to read the article as posted on the Health Affairs website (URL above).

Besides covering some important single-payer principles, this article is particularly helpful in that it explains how a buyout of investor-owned facilities is affordable and, in the long run, would actually lower costs. This should alleviate the concerns of those who say that we cannot afford to convert to a non-profit health delivery system that eliminates passive investors.

The process of aligning the bills and converting them into legislative language is already underway and is expected to continue into the next session of Congress, which is almost upon us. So today’s message could not be more timely.

Those members of Congress who were elected after campaigning in support of Medicare for All need to understand that voters were supporting Single-Payer Medicare for All and not simply supporting the addition of a public option to our existing fragmented, dysfunctional, overpriced, and underperforming system, even if the public option carried a Medicare label.

But it is absolutely imperative that we communicate in a dignified and respectful style; the passion for our cause must be used to fuel a very positive message of truly attainable health care for all. The principles presented in this blog will provide the message that we need to convey.

This article should be shared widely to be used in our advocacy work.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Harris Meyer
Modern Healthcare, November 15, 2018

Nearly 4,000 Arkansans lost their Medicaid expansion coverage in October because they failed to comply with the state’s new work requirement, joining 8,462 other low-income adults who lost benefits in the previous two months.

State officials reported Thursday that 3,815 of the 69,041 people subject to the so-called community engagement requirement in October were noncompliant for three months and were dropped from Medicaid. They will lose coverage for the rest of 2018 and can only reapply in January.

The total number of people cut off of coverage in October in the state’s Medicaid expansion program, dubbed Arkansas Works, was 15,081.

Of that number, 25% were axed due to noncompliance with the state’s requirement that they spend at least 80 hours a month working, volunteering, going to school or receiving job training, while 28% were dropped because they failed to supply the requested information.

The state said 6,002 additional people have been noncompliant for two months and are at risk of losing their coverage at the end of November.

Only about 1,525 of the 69,041 people subject to the work requirement in October reported meeting the 80-hour-per-month work requirement.

Total enrollment in Arkansas Works now stands at 245,553, down 12% from 279,602 when the work requirement started in May.

Arkansas Gov. Asa Hutchinson said in September that the program’s goal is to boost labor participation and increase work training and assistance to able-bodied people who want to work. The Republican cited state data showing that about 1,000 people gained job training or employment as a result of the program.

But experts and provider groups have expressed alarm about the coverage losses and the viability of the state’s complex work and reporting requirements. Beneficiaries can only report through an online portal.

The Arkansas Hospital Association has said it would like to see the requirement halted. Providers fear the new system will disrupt care for people with chronic conditions and drive up uncompensated-care costs.

In June, (U.S. District Judge James) Boasberg invalidated the CMS’ approval of a similar requirement waiver in Kentucky on the grounds that the agency did not adequately consider its impact on coverage. Following that ruling, the CMS held a new public comment period on the Kentucky waiver and is expected to re-approve it in some form.

Two other Republican-led states, Indiana and New Hampshire, also received CMS approval this year for a five-year demonstration waiver to establish a community engagement requirement. Their programs haven’t started yet.

Ten other states have requests pending to establish similar Section 1115 demonstrations.

In addition, there are discussions in Idaho, Nebraska and Utah, three states where voters just approved Medicaid expansion, about including a work requirement. Similar discussions are taking place in Montana, where voters just shot down a tobacco tax to fund a renewal of Medicaid expansion, and in Alaska, where an anti-expansion Republican was just elected governor.

The Trump administration in January encouraged states to seek work requirement waivers.

In Arkansas, beneficiaries must report that they were either meeting the community engagement requirement or that they qualified for an exemption, such as for a disability. They can only report through an online portal run by the state Department of Human Services. There is no option for reporting by phone, mail or in person.

Enrollees may be hard to reach by phone due to unstable housing or other factors, and a large percentage lack email or internet access. In addition, the online reporting process is complicated and confusing, even to advocates and providers that have tried to help beneficiaries.

“The most likely reason for noncompliance is that (Medicaid expansion enrollees) simply do not know about the new requirements or else do not know about or understand the online portal they need to navigate in order to successfully comply,” said Bruno Showers, senior policy analyst at Arkansas Advocates for Children and Families.

https://www.modernhealthcare.com…

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Comment:

By Don McCanne, M.D.

Two common problems for which there is a legitimate role of government in intervention include impaired access to health care for low-income individuals, and difficulties with finding and keeping adequate employment.

What is difficult to understand is why bizarre ideological concepts are allowed to displace need. In this instance, failure in one endeavor – lack of success in finding employment – is used to penalize the other – taking away health care merely because the patient lacks employment.

People by the thousands are losing health care because of this nutty idea. Instead of stepping in and correcting the problem, our current government ideologues are expanding this punishment of depriving people of health care.

The two problems are separate and require different solutions. We won’t discuss here the complex problem of ensuring optimal rates of employment, but we certainly can and should comment on the health care issue.

Everyone who needs health care should have it. We have an excellent understanding of the policies that would ensure health care for everyone. Simply enacting and implementing Single Payer Medicare for All would do it.

It’s not that we should reject ideology in our policy decisions. Rather it is that we should make efforts to get the ideology right. Ensuring health care for everyone is clearly the right thing to do – an ideological concept representing a moral imperative. Using the deprivation of health care as a punishment for failure of other unrelated policies represents an ideological perversion.

We can get this right. Enact Single Payer Medicare for All, and then separately continue to address our issues with chronic and recurrent unemployment. All we voters need to do is select government stewards who understand and support the ideology of our moral imperatives.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Peter Sullivan
The Hill, November 15, 2018

Progressive Democrats are pushing for a vote on a controversial health-care bill after the party takes control of the House early next year.

But the left’s push for “Medicare for all” legislation would likely divide Democrats and pose a headache for House Minority Leader Nancy Pelosi (D-Calif.), who is poised to become Speaker in the next Congress.

Rep. Pramila Jayapal (D-Wash.), who is co-chair of the Medicare for All Caucus in the House, told supporters on an organizing call Tuesday night that simply expressing support for the idea is not enough.

“When we have that majority, we need to make sure that we put it to use,” she said.

Yet, many other House Democrats, including members of the leadership, are not on board with the idea of government-run universal health insurance.

Supporters say they are going to push for a vote and organize grass-roots efforts to pressure Democratic holdouts to sign on to the legislation. However, any floor vote would probably fail, with all Republicans and some Democrats rejecting the measure.

Republicans used Medicare for all — otherwise known as single-payer — as a leading area of attack on Democrats during the 2018 midterm elections. They touted a recent cost estimate by the Mercatus Center at George Mason University, which put the bill’s price tag at $32 trillion over 10 years.

Rep. Raúl Grijalva (D-Ariz.), the co-chairman of the Congressional Progressive Caucus, acknowledged that centrist members did not want a vote on Medicare for all, but countered, “There’s going to be votes that we need to take.”

“Regardless of the political ideology, everybody understands the expectations that we’re under, and you have to satisfy a lot of expectations,” Grijalva said. “Medicare for all is one of them.”

Rep. Ron Kind (Wis.), a centrist Democrat, countered that he did not want a vote on Medicare for all, pointing to what is realistic given that a Republican-controlled Senate would certainly never pass such a bill.

“Even Leader Pelosi and our leadership isn’t pushing that right now, so I think we need to be pragmatic in our legislative ambitions around here with a divided Congress and with Trump down at the White House,” Kind said.

A spokesman for Pelosi referred back to the California Democrat’s previous statements on Medicare for All when asked if Pelosi was open to having a vote.

Pelosi said in June that ideas like Medicare for all would “have to be evaluated in terms of the access that they give, the affordability of it and how we would pay for it.”

“But again, it’s all on the table,” she added.

Left-leaning groups are energized about the idea and aren’t taking no for an answer.

On a call put together by National Nurses United on Tuesday night, organizers from progressive groups told supporters how they would use grass-roots pressure to target House Democratic holdouts with phone calls and visits to their offices. They said they would particularly target 13 Democrats on the key House Ways and Means and House Energy and Commerce committees who have not co-sponsored the legislation.

National Nurses United is organizing “barnstorms” of intense grass-roots activity to pressure Democrats on Medicare for all from Feb. 9-13.

Sen. Bernie Sanders (I-Vt.), the leading champion of the idea who may run for president again in 2020, said on the call that proponents needed “massive grass-roots support” in order to pass the measure.

But Rep. Frank Pallone Jr. (D-N.J.), the likely chairman of the Energy and Commerce Committee next year, indicated Wednesday he is not interested in holding hearings or a vote on the bill and pointed to smaller steps to shore up the Affordable Care Act.

“I’ve always been an advocate for Medicare for all or single-payer, but I just don’t think that the votes would be there for that, so I think our priority has to be stabilizing the Affordable Care Act, preventing the sabotage that the Trump administration has initiated,” Pallone said.

The current Medicare for all legislation, H.R. 676, has 123 Democratic co-sponsors, roughly two-thirds of the current House Democratic Caucus. But that is still far short of the number needed to pass the legislation. Neither Pallone nor the likely chairman of the Ways and Means Committee, Rep. Richard Neal (D-Mass.), is a co-sponsor of single-payer.

Jayapal said she is working with colleagues on an updated version of that bill and hopes to have agreement on it “over the next month” to be ready to introduce in the next session, which begins in January.

Organizers on Tuesday night’s call cited as an example of their work that they had already been showering the office of Rep. Joe Kennedy III (D-Mass.) with calls pressuring him to support the legislation.

Kennedy told The Hill on Wednesday that he is open to co-sponsoring an updated version of the bill if it addresses some problems he has with the current text, which would bring a rising Democratic star on board.

“I am more than open to the idea of single-payer,” Kennedy said. He said “unquestionably single-payer is a part of” the discussion going forward, but added: “I think the first step is trying to make sure we maintain the progress that we’ve had with the Affordable Care Act.”

Rep. John Larson (D-Conn.), a former member of Democratic leadership, said he thinks allowing people 50 and over to buy into Medicare is a more “intelligent and incremental” way to address the issue, but did not push back on the idea of a vote on Medicare for all.

“Congress should be about the vitality of ideas,” he said. “That’s an idea that should be discussed.”

https://thehill.com…

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Comment:

By Don McCanne, M.D.

The push for Single Payer Medicare for All is gaining enough traction such that the House of Representatives will likely hold hearings on it in the next session of Congress, and there may even be an actual vote held on the proposed legislation. It is unlikely that the Senate would advance the bill to the President’s desk, but this development is nevertheless very significant because it shows how popular the concept has become.

Education, advocacy, and grassroots efforts are working. Organizations such as National Nurses United and Physicians for a National Health Program, along with several others, have been particularly active in education and advocacy efforts. Grassroots support drove many politicians to endorse Medicare for All in the midterm election.

The people are leading, and the politicians are following. Keep it up! Single payer Medicare for All!

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

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 respondents’ 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 — who are clinical leaders, clinicians, and executives at U.S.-based organizations that deliver health care — 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 nation’s 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 Women’s 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.

https://catalyst.nejm.org…

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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.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.