Payers Thrive While Physicians Struggle with the Reality of Value-Based Care

stethoscope on a table in the foreground with a male doctor out of focus at a computer looking anxious

Health insurers and government policymakers continue to push for a transition in the U.S. healthcare system from a fee-for-service model to value-based care.

The numbers show this transition has taken hold. About two-thirds of healthcare payments are now based on value, while the number of fee-for-service payments continues to decrease at a faster rate than projected, according to an ORC International report commissioned by Change Healthcare.

The report involved information from 120 payers of various sizes. It included managed Medicare, managed Medicaid, and commercially focused payments. Health insurers reported medical cost savings of 5.6% on average with value-based care.

However, the experience has not been as positive for the healthcare professionals who deliver medical services.

The Impact on Physicians

Value-based care is a healthcare services delivery model in which physicians and medical service providers are paid based on patient outcomes. That is opposed to fee-for-service, in which healthcare providers are paid based on the amount of services delivered.

Although value-based healthcare has been the goal for many years, a majority of physicians still oppose the change, according to a 2017 report from management consultants Bain and Company. About 60% of the 980 physicians surveyed said the switch will make it harder for them to provide high-quality care over the next two years.

And 73% said they still prefer a fee-for-service model.

There are a variety of issues involving value-based care that physicians have highlighted, according to research from The Physicians Foundation. A 2018 survey of 9,000 physicians found that 50% do not believe that the metrics used to determine reimbursements by health insurers are tied to improved quality of care.

The survey also found that the value-based care model is directly tied to dissatisfaction among physicians in their careers and even professional burnout for some. Only 18% felt that value-based care was improving healthcare services. Some associated value-based care to excessive government and insurer regulations and a loss of autonomy.

Potential for Unintended Consequences

While intended to create a method for reimbursing medical providers for care that improves health outcomes, value-based care also has the potential to widen the disparity between healthcare for those with money and those without.

That’s a concern expressed by Dr. Dhruv Khullar, writing for the New York Times. Khullar said the use of metrics to determine the effectiveness of treatment may not include the social determinants that can lead to health issues in some patient populations. That, he wrote, could in turn influence doctors to steer clear of treating those populations.

Writing about his time treating people from such populations, Khullar painted a vivid picture. He wrote: “What strained our abilities was not our patients’ medical complexity, but their social problems: They were poorer, less educated, more isolated, from rougher neighborhoods. We quickly learned that while it’s hard to dose insulin, it’s harder still for a patient who speaks no English, has no refrigerator and regularly has his medications stolen.”

He noted that some doctors, hospitals and clinics across the country treat a disproportionate share of people from such communities, and voiced concerns that “social disparities” are not considered in how medical professionals are paid under value-based care.

Payers See Benefits

Blue Cross Blue Shield reported a reduction in costs by 32% over the first six months of 2018, according to Health Payer Intelligence. Highmark Health Plan reported saving $260 million in 2017 through the value-based care model, while Humana reported that value-based programs were 15% less costly than fee-for-service models.

This push and pull between insurers and providers on the issue of value-based care is likely to continue as doctors and other medical professionals struggle with issues such as inefficient electronic health records and the social disparities in patients.

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