In 2018, 53 percent of Aetna’s medical spend was with value-based providers. The U.S. spends the most on health care, but has the worst outcomes and highest disease burden among developed nations. It took five levels of detail to reach useful operational value drivers.
With its core based on overall wellness and preventive treatments, value-based care improves healthcare outcomes and reduces costs. Many of us have been around long enough to hear about the “next great thing” in health care payment reform, only to watch it evaporate while we all keep running on the FFS hamster wheel. But what if we were paid up front to take care of patients and also rewarded for good clinical outcomes? We are interested in working with those individuals and organizations with a goal of improving health care using a value-based approach.
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A value driver is any variable that affects the value of the company. To be useful, however, value drivers need to be organized so that managers can identify which have the greatest impact on value and assign responsibility for them to individuals who can help the organization meet its targets. Decision making can be heavily influenced by the choice of a performance metric. Real-life cases that show how focusing on value can transform decision making are described in the sidebars « VBM in action. »
Risk adjustment refers to the process of adjusting target quality and outcomes goals for
value-based contracts based on the prevalence of disease burden and demographics of the patients
attributed to participating providers. Risk adjustment is necessary to not disincentivize providers according to the manufacturing-based definition of quality from
taking on sicker patients, who may be more difficult to bring to “good health” than someone
who is already relatively healthy. In fact, those patients who are sicker tend to have more
opportunities for health improvement and cost reduction than healthier individuals.
Design a comprehensive solution to improve health outcomes
The ten other countries studied were Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland and the United Kingdom. Link performance measurement to a unit’s short- and long-term targets. This may seem obvious, but performance measurement systems are often based almost exclusively on accounting results.
- To our knowledge, no study has examined patients’ priorities across key healthcare domains that we tested with concurrent assessment of demographic associations.
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- Company X failed to manage its balance sheet because of its emphasis on the wrong performance metric—return on sales.
- Though active top management support is a necessary condition for the successful implementation of VBM, it is not sufficient in itself.
- The video caught their attention and showed them that top management supported the change that was under way.
- While some descriptions conflate value-based health care and cost reduction, quality improvement, or patient satisfaction, those efforts-while important-are not the same as value, which focuses primarily on improving patient health outcomes.
- Privately insured and more educated patients were less likely to rank humanistic qualities highly.
Cost-grouping methodologies like the one developed at the University of Utah15 or applications of time-driven activity-based costing16 can provide the data teams need both to demonstrate the value of their care and to identify areas for improving their efficiency. In the personal responsibility domain, our findings of high correlation between prioritizing exercise, diet and leading a healthy lifestyle over other qualities with younger age, and higher educational attainment has been noted before. VBC’s proactive, data-driven approach means providers, patients and insurance companies are better aligned in the goals of keeping patients healthy and keeping costs down over time. It’s no surprise that addressing risk factors and early-stage disease is better for patients and less expensive than late-stage interventions and hospitalizations.
Survey administration
The influence of industry payments on physicians’ behavior is well established. This study suggests that this influence has the potential to negatively impact the care of individual patients. Patients with cancer whose oncologist received payments from industry appeared more likely to receive non-recommended and low value treatments. This study focused on a narrow group of patients and interventions, and further research is needed to better characterize whether, and to what degree, the observed association between payments and poorer care quality extends to other settings. Given the potential concerns for care quality raised by this study, however, it may be appropriate to re-examine the current status of personal payments from the drug industry to physicians. As employers consider various value-based purchasing strategies, they will need to keep these elements of value in mind.
More and more financial incentives are arising to draw providers to value-based payment arrangements. The lure to providers is to make more money when they provide high-quality services at lower costs. The ultimate transition from fee-for-service payments requires the providers to be responsible for delivering higher quality, more efficient services, making the payments they receive dependent on the outcomes they achieve.
From Data to Decisions
Services range from jets that deliver tons of time-sensitive cargo to drones that deliver individual bags of blood, and from buses to rented electric scooters. In each case, the transportation company matches its services to the needs of its customer segment. Health care providers may earn more or avoid penalties if they reduce or maintain costs. So, if providers can reduce unnecessary use of high-cost forms of care like emergency department visits and inpatient admissions, they may share some of the savings they produce. Under this Special Innovation Project, existing measures, as well as new measures, are being refined and specified for implementation in provider reporting programs. Whilst the user-based approach to quality is rooted in the subjectivity of consumer preferences, the manufacturing-based approach, as the name suggests, focuses on internal matters.
The “value” in value-based care refers to what an individual values most. However, these physicians were even more likely to use non-recommended or low value drugs when they had recently received a payment. The level of discounts off a providers’ list prices is often used as a comparison tool for the strength and competitiveness of a health plan’s network and contracted rates. However, the lowest discount percentage does not necessarily mean lowest net cost, as list prices can vary. More importantly, discounts do not demonstrate how well a health plan is able to hold down the total cost of care through value-based contracting or offering a higher quality of providers within the network.
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Even a small change in that calculus could dramatically improve our health care system. It would be simpler and less frustrating if there was a unified, lasting VBC system with consistent metrics. We’re not there yet, but a decade of lessons learned is getting us closer.4 However you feel about it, VBC is not going away. In fact, it continues to grow because the goal of improving health outcomes by rewarding clinical quality, prevention of illness, and cost-effective care is appealing to patients, physicians, and payers. The health care value equation provides a way to understand how well an organization is performing vis-a-vis the vision of STEEEP and the framework of the Triple Aim. It is defined as the quality of care—made up of outcomes, safety and service—divided by the total cost of patient care over time.
High-risk patients require the most resources, but keeping them healthy yields the greatest rewards. It will change month to month as patients move, die, get new insurance, or find a different primary care doctor. Therefore, the final step in empanelment is to ensure you’re updating your panel regularly. There is no formal guideline, but once a year is a reasonable benchmark.
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The higher odds of choosing SDM by those with higher education in Q3 is also consistent with the evidence that better informed patients are likely to value and engage in SDM. [58,59] Explaining the higher odds we saw for choosing SDM for Q4 among those with “other” race would require a sub-subgroup analysis that was not performed here. In addition, loss of 53 surveys in this question may have reduced the power to detect other potentially significant associations in this category.
Branded drug cohort
Mechanical approaches based on available information and purely financial measures rarely succeed. What is needed instead is a creative process involving much trial and error. Electronic medical records for each patient eliminate repetitive and unnecessary tests and procedures. Teams of doctors and healthcare professionals communicate with one another through the help of care coordinators to treat patients with more efficiency and less wasted time and effort. A colleague recently shared her experience trying to report an accurate record of her colorectal cancer screening (CRCS) performance. In most instances, she ordered the screening, the patient completed the test, and results were available in the chart.
Humanistic qualities of physicians, leading a healthy lifestyle, shared decision making (SDM) for medications and tests/procedures as well as knowledge about insurance coverage were the most frequently ranked choices. Our healthcare system is moving towards patient-centered and value-based care models that prioritize health outcomes that matter to patients. However, little is known about what aspects of care patients would prioritize when presented with choices of desirable attributes and whether these patient priorities differ based on certain demographics. Studies of value-based care programs so far suggest that they can reduce costs and improve quality of care, although results have often been mixed and impact modest. Our main outcome measures were based on the participants’ ranking of three to four important qualities under each of the five domains in the order of their personal priority. In addition to health outcomes, teams must measure the costs of their services for every patient.
