David B. Snow, Jr. | Chairman & CEO | Cedar Gate Technologies.
For decades, U.S. healthcare costs have risen while quality has declined. Today, costs are twice as high as similarly developed countries, consuming 20% of GDP, while outcomes are the worst by almost every measure—life expectancy, disease prevention and infant mortality.
Healthcare’s Misaligned Incentives
What explains the divergence between the U.S. and its peer nations? One root-cause problem is a fee-for-service (FFS) reimbursement structure that rewards providers for performing expensive, often unnecessary procedures. It’s jokingly called “fee-for-volume” and rewards “sick care” rather than health maintenance.
Value-based care (VBC) is an alternative. These models are typically risk-based, and they reward improved outcomes for cost and quality. VBC models include primary care attribution, bundled payments and capitation, and they’re not new.
A Powerful Alternative To Fee-For-Service
VBC realigns incentives to focus on outcomes over volume. It emphasizes providing the right services in the right place at the right time to improve overall patient health. VBC rewards providers for health maintenance rather than sick care—reimbursing for preventive services to avoid or manage chronic diseases, minimize higher-cost interventions and keep patients out of costly places like hospitals and ERs whenever possible.
VBC is a logical option to lower costs and improve quality for all.
• Patients get optimal care and achieve better health.
• Providers can focus on patient wellness without worrying about clinical volumes to remain financially viable.
• Payers can reduce total costs and, ultimately, premiums.
• Employers get a healthy, productive workforce and can offer competitive benefits to attract and retain employees without sacrificing financial goals.
The History Of VBC Models
I’ve dedicated most of my career to advancing VBC in U.S. healthcare: first in the hospital setting, later in managed health plans and today through technology. I’ve experienced the backward thinking and policies that FFS promotes. I’ve also witnessed the positive impacts VBC has on cost and quality.
Throughout the past century, numerous VBC models have emerged. Each iterative experiment brought us closer to where we are today. It began in 1929 when the Ross-Loos Medical Group collected prepayment for keeping patients healthy (an early version of today’s capitation models). The ensuing decades led to the establishment of Health Maintenance Organizations (HMOs) and the first bundled payment arrangements.
In 2010, Congress established the Center for Medicare and Medicaid Innovation (CMMI) to identify ways to improve healthcare quality and reduce costs in government-administered healthcare systems. Since then, we’ve seen multiple VBC reimbursement models from CMMI.
CMS recognizes the potential for success and is all-in on VBC. By 2030, all Medicare and most Medicaid beneficiaries will be in some form of VBC model.
What Was Previously Holding Back VBC
I was implementing VBC models in the early 1980s, but real growth began in the past decade. There are two key drivers of VBC adoption: first, the leadership of CMS through CMMI, and second, the emergence of data and technology infrastructure necessary to implement value-based care at scale.
When data were all in paper charts, information was difficult to share among providers and healthcare systems. Even as green-screen computers made their way into healthcare offices, they were underpowered, costly and disconnected.
Asking providers to take on financial risk in this scenario was like asking a pilot to fly a plane blindfolded and without instrumentation. Even the best providers who believed in VBC failed due to a lack of visibility into population risks for their patients.
VBC’s success requires vast amounts of data run through powerful analytics that go beyond accumulating historical information. Providers, payers and employers need tools to analyze and predict future costs, behaviors and outcomes. All that information must be scalable to go from improving individual patient care to advancing entire healthcare systems.
The Key: Today’s Technology
Fortunately, with the evolution of healthcare technology, the elements are now in place to realize the full promise and potential of VBC.
• Data are available and accessible. Enterprise data management platforms support data aggregation, normalization, augmentation and sharing on an industrial scale, helping organizations unlock value from clinical, claims, social and other data.
• Analytics extract meaningful insights. Advanced analytics tools incorporate machine learning and AI for predictive and prescriptive insights that calculate risk, identify prevention opportunities and improve future care.
• Payers and providers can collaborate. Workflow and care management tools provide actionable insights and align payers’ business goals with providers’ care delivery. Cloud computing makes data sharing possible across multiple systems.
• Multiple processes in a care delivery system can be automated. Technological advances facilitate automated processes that were once manual—for example, claims processing, analytics and patient care workflows.
Challenges To Consider
As technology continues to evolve to meet the needs of a value-based care future, healthcare organizations and stakeholders adopting these new technologies will inevitably encounter challenges.
Efficient, near-real-time data sharing among disparate health systems is still hard and can only be solved with advances in data integration that normalize and cleanse files with minimal manual work.
Companies and vendors may limit collaboration out of fear that sharing too much data might harm their business. Clarity among care partners on what information everyone needs to improve patient care, and technology that protects proprietary data, can address these concerns.
The separation of analytics and clinical care in many organizations also disrupts VBC progress. When data analysts uncover meaningful insights in healthcare data, they need a way to share it with clinicians to use at the point of care. Workflows that automatically push information from an analytics platform to point-of-care platforms can turn insights into clinical action.
Finally, staffing shortages and burnout pose significant challenges in healthcare. Automating repetitive tasks can alleviate these issues by allowing clinical staff to prioritize patient care.
The path to value-based care was evolutionary to date. Decades of experimentation provided a blueprint for incentives that benefit everyone. With enabling technology now in place from a wide variety of vendors in the healthcare marketplace, we can’t continue with slow and incremental changes toward a VBC future.
To improve patient health and combat the rising cost of care, we need to take a giant leap forward.
Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
Read the full article here
