Value-based care: burden or benefit?

January 12, 2017 ABILITY

With the uncertain future of the Affordable Care Act (ACA), it’s hard to know which features of the program, if any, will be preserved. Some features were designed to encourage what’s known as “value-based” care as a mechanism to drive down overall costs. The argument for value-based care is simply that physicians and organizations should be paid on the value of care delivered, rather than on the volume of services rendered. The commercial health insurance industry has been moving toward value-based care for some time, and Medicare has been testing alternative risk and compensation models of late under the ACA.

Many physicians have chafed against commercial payer initiatives to enforce value-based care, finding the rules burdensome and frustrating. Many don’t want a new set of Medicare rules. They note that the greatest share of healthcare expenditures come from patients with multiple overlapping conditions. For these patients, the argument goes, a basic cost-value formula is inadequate to measure treatment effectiveness.

Experiments in value

Value-based care is one arena in which Medicare has followed the industry rather than leading the way. The CMS Innovation Center was established under the ACA with the goal of creating better patient care, smarter spending and healthier communities. The Center is funded through fiscal year 2019 and has tested more than 25 major payment and service delivery models or initiatives. More than 4.7 million people who are enrolled in Medicare, Medicaid and CHIP are receiving care through these models or soon will be.

While it might seem odd to argue against potential cost-savings through new payment and service delivery models, Innovation Center advocates may have to make a strong case to a new administration in order to continue. Indications from the new administration are that free-market solutions, the ability to negotiate prices with pharmaceutical companies and the lifting of coverage mandates are the answers to reducing healthcare costs.

Some agreement exists

There are people in both parties who support value-based care. As recently as December 2015, the Bipartisan Policy Center published a report that acknowledged the need to expand coverage and improve the value of healthcare by lowering costs and improving quality.

As quality expert Helen Darling said in Modern Healthcare:

“The concept of value in healthcare has been around a long time. Fundamental ideas like the importance of transparency and data to patients, providers and competition existed well before the ACA, and they are as Republican as they are Democratic.”

Time will tell

It appears that the administration wants to move very quickly on repealing and replacing the ACA. With that may come the end of the CMS Innovation Center. There’s just nothing to do but wait.

Providers and health systems will continue to need help navigating clinical and administrative complexities as the industry evolves. ABILITY can be a steady partner during a time of profound change and uncertainty. Check out our resources here.

 

 

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