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Value-based care initiatives floundering in a broken system

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The Turntable Health clinic in Las Vegas did everything right. With support from the community, brilliant and focused leadership, and a clear vision for health care improvement, Turntable Health was ready to “disrupt” the fee-for-service model, Robert Pearl writes in Forbes. But when David faces a Goliath, the Goliath usually wins. This time, the Goliath was insurance companies who refused to pay anything but fee-for-service.

The clinic’s founders, Dr. Zubin Damania (better known by his online alias, ZDoggMD) and Dr. Rushika Fernandopulle, emphasized prevention and doctor-patient relationships. The clinic provided patients with easy access to care and ample face-to-face time with their doctor, for an affordable flat fee rather than paying doctors per service. Turntable Health had better quality outcomes and higher patient satisfaction than any other clinic in Las Vegas. Unfortunately, Damania and Fernandopulle’s vision for long-term health clashed with insurance companies’ needs for short-term profit, and Turntable Health was forced to close earlier this year. 

Payment reform sabotage

This is just one example of how efforts to move toward value-based care have been stymied by the realities of our profit-driven health care system. A recent STAT article recounts how Dr. Barbara McAheny worked to reduce costly ER visits for her patients, only to face backlash from local hospitals that were losing money from fewer hospitalizations. One hospital sent out a mailer reading, “If the complications of your cancer seem urgent and you can’t reach your doctor, a trip to the emergency department could save your life.”

As Shannon Brownlee and Dr. Robert Pearl pointed out during a recent health care debate, those who benefit from the current fee-for-service system will not give up without a fight. Although individual movements toward value-based care are encouraging, “the providers that have innovated will remain exceptions until we see fundamental changes in the way the system is paid for, regulated, and organized,” said Brownlee.

Patient-centered payments

Harold D. Miller, president of the Center for Health Care Quality and Payment Reform, agrees that current value-based reforms aren’t enough to make a real dent in health care costs. In a new report, Miller explains that neither fee-for-service nor value-based care initiatives are sustainable, because:

“…their central focus is on how to pay providers for services or how to reduce spending for insurers, not on how to achieve good healthcare outcomes for patients at the most affordable cost for both patients and their insurers.” 

Miller proposes a “patient-centered payment system” that would use different types of payments for preventive, diagnostic, chronic, and acute care. Teams of care providers would deliver care in bundles, rather than being paid for each individual service, and would be paid only if they achieved certain pre-defined patient outcomes.

A bright spot in Maryland

It’s not all bad news in health care payment reform, however. In 2014, Maryland switched to a global budgeting system for hospitals, which, along with its long-standing policy of all-payer rate setting, seems to be helping bring down costs and improve health care quality. So far, Maryland’s rate of growth for hospital spending has been well below their target of the state economy’s growth rate, and rates of preventable complications and readmissions in the state have dropped.

If we want to make value-based care a reality in all states, we need to be ready to work for system-wide change. We also need to redefine what we want from value-based care – not just giving insurers the best value per patient, but giving patients the best outcomes at the lowest cost.