Data Shows Value-Based Care is Reducing Costs, But Implementation Faces Roadblocks

Healthcare payers are reporting reduced costs using value-based care, the delivery model that bases provider’s payments on patient outcomes.

Healthcare services and technology company Change Healthcare surveyed 120 payers who reported an average of 5.6% savings using the value-based care model. Blue Cross Blue Shield itself reported 35% in reduced costs for providers using the model compared to providers who weren’t.

Dr. Brent James, a professor at the Stanford University School of Medicine, testifying before the Senate Health, Education, Labor and Pensions Committee, encouraged senators to “vigorously” support value-based care in order to reduce medical costs.

Dr. Steven Safyer, CEO of Bronx-based Montefiore Health System, told the senators that the value-based model had put his organization “in sync with the payer … and we believe that’s the secret.”

With support this enthusiastic, it would seem providers would be rushing to adopt the value-based care model. However, the change-over from fee-for-service is occurring less rapidly than advocates hoped.

Moving Backward?

Some statistics suggest it’s even moving backward. Research by Quest Diagnostics found this year that 67% of physicians and healthcare executives say the U.S. still operates on a fee-for-service basis, compared to 63% in last year’s survey.

According to the Quest study, 57% of the 451 health plan executives surveyed said physicians don‘t have the tools necessary for value-based care, compared to only 45% in 2017. Additionally, almost 75% of respondents said physicians don’t have all the information they need about their patients.

Further, less than 40% of physicians surveyed said they got all the data they needed for patient care from electronic health records (EHR).

The survey also pointed out discrepancies in the perceptions of payers and providers.

Only a little more than two-thirds of physicians surveyed thought that investments in technology have made the quality and value of their care better, compared to 80% of health insurers who concurred with the statement.

“We need to move from fee-for-service to a system that pays for value and quality—but how we define value and quality today is a problem,” according to Seema Verma, administrator of the Center for Medicare and Medicaid Services (CMS).

Different Treatments, Different Judgements

As quoted in an article on the Healthcare Informatics website, Verma explained, “Clinicians and hospitals have to report an array of measures to different payers. There are many steps involved in submitting them, taking time away from patients. Moreover, it’s not clear whether all of these measures are actually improving patient care.”

There’s also the issue of how to judge outcomes from very different treatment cases, according to Dr. Mary Barton, vice president for performance measurement at the National Committee for Quality Assurance (NCQA).

Barton illustrated the discrepancies by comparing treatment for a hip replacement and long-term care for a diabetic patient.

A 30-day post-hip surgery recovery provides a very straightforward measurement, she said, compared to treatment of a diabetic patient which can occur over decades and include several providers.

“When someone has a bad long-term effect and goes blind based on decades of poor sugar control, who will you put the outcome on?” she asked. “Will you blame the doctor taking care of that patient at the time he or she turns blind, or will you go back and figure out how to hold all the other doctors in the patients’ past responsible for that?”

Resolving payer-provider issues is the key to speeding up the transition to value-based care.

“We have to somehow jump start those [payer-provider] relationships being built so that the data will be shared,” Barton said, adding that “our mission is that measurement be used in real time to help clinicians improve quality,” she says.

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