Value-based payment has produced little value. It needs a time-out

“The concept of value-based payment became widespread among U.S. health policymakers and analysts during the 2000s. It collectively refers to interventions that offer doctors and hospitals financial incentives that, in theory, induce them to improve both components of health-care value — cost and quality — without generating the hostility provoked by managed care insurance companies during the HMO [health maintenance organization] backlash of the late 1990s. [The Center for Medicare and Medicaid Innovation reviewed 54 models of value-based payment. Only four were certified to be expanded:] The Home Health Value-based Purchasing Model demonstration cut Medicare spending by 1% with mixed … Read More

Value-based drug pricing: When does it work best?

“while the U.S. lags behind in adopting value-based agreements, many policymakers are realizing that value-based pricing can be an important, viable solution to the high and rising expenditures that payers lay out for prescription drugs. Developing value-based agreements has never been easier. A large number of value-based agreements are now available and can be used to help payers, manufacturers, and providers develop new ones appropriate to their specific situations. [..] Here are four scenarios for which I believe value-based pricing is appropriate. When expected outcomes for a new treatment are clear and objectively measurable. [..] Treatments with clearly defined, meaningful, … Read More

Can We Control Costs without Value-Based Care?

Like many of my colleagues in the American healthcare system, I have been alternatively hopeful and skeptical about the potential value from pursuing more value-based care initiatives in relation to our current fee-for-service model. Accountable Care Organizations (ACOs) will probably save no more than five percent of total healthcare costs. Eight years into Blue Cross Blue Shield’s Alternative Quality Contract with two-sided risk in Massachusetts showed savings ranging from 2.3% to 11.9% over three years. Bundled payments for joint procedures may save a few percent (primarily from reduced post-acute care utilization). Some have suggested Centers of Excellence to both validate … Read More

What US Medicine Needs To Do To Finally Embrace Capitation

“In 2012, there were 35,700 hospital-owned physician practices, and in 2018, there were 80,000 hospital-owned physician practices, constituting 128 percent growth. The coronavirus pandemic may actually accelerate these acquisitions due to reduced revenues for independent physician practices. [..] For consolidated health systems that include hospitals and employed physician groups, health care executives face significant pressure on finding appropriate resource allocation to cover fixed and variable costs of inpatient care while also funding alternative sites of care. Striking this balance with a fixed budget is not obvious, and health care executives may need to divest from more expensive hospital-based labor and … Read More

A Comparison of Online Medical Crowdfunding in Canada, the UK, and the US

“The growing importance of medical crowdfunding (MCF) is reflected by trends on GoFundMe, the largest social crowdfunding platform in the world. In 2011, medical causes raised $1.6 million on GoFundMe; in 2014, the amount had increased almost a hundredfold to $150 million and in 2016, more than $650 million. [..] The growing reliance of health care consumers from the US on MCF has been attributed to increasing health care costs and the lack of a publicly funded health care system. However, the popularity of MCF in developed countries with universal health care such as Canada and the UK cannot be … Read More

Rethinking Annual Deductibles: The Case For Monthly Cost-Sharing Limits

“A key contributor to underinsurance is growing enrollment in high-deductible health plans for those on the health insurance exchanges and in employer-sponsored health plans. Solutions such as consumer education, health savings accounts, and targeted cost-sharing reductions have been explored to help alleviate concerns of cost-related non-adherence to needed medical care, yet one-third of privately insured Americans report difficulty affording health care. [..] Given high health care prices, increasing deductibles (the average annual deductible in employer-sponsored insurance increased from $533 in 2009 to $1,655 in 2019), and growing high-deductible health plan enrollment (from 25.3 percent in 2010 to 47.0 percent in … Read More

A Sustainable Post-Pandemic Health Care System Needs Adjustable Payment Models

[Chernew:] I personally don’t like thinking of the payment mix as a portfolio problem because I see a whole range of broader [problems], with the fee-for-service payment writ large. Of course, I see a lot of problems with population-based payments or episode-based payments, as well. But given what happened, delivery systems are understanding that they are facing this service risk and that [..] moving to population-based payment models will give them both a little more mobility and I would argue a little more flexibility and a little more incentive to maintain and build an efficient health care system when we … Read More

Despite A Bumpy Road Ahead, Incremental Progress On Price Transparency

“the health care industry is strenuously resisting this drive for transparency. High-price providers fear public disclosure would force them to lower their rates, since many cannot prove they actually offer higher-quality care. Commercial health plans also fear transparent prices. It would erode their market advantage by enabling competing plans to demand similar rates from providers. [..] Last November, the administration released separate rules requiring hospitals and health insurers to publish their privately negotiated rates for hundreds of non-emergency, “shoppable” services. Hospital groups are fighting in court to block the yet-to-be-enforced hospital rule, arguing that it’s overly burdensome and that the … Read More

Surprise Billing for Colonoscopy: The Scope of the Problem

“Federal law eliminates consumer cost sharing for multiple methods of colorectal cancer screening, including colonoscopy when done by an in-network provider. However, some patients having screening incur considerable out-of-pocket costs because out-of-network bills are not included in federal mandates. [..] A claims database from a large national insurer was queried for commercially insured patients aged 18 to 64 years who had a colonoscopy between 2012 and 2017. Cases coded as elective with a stay of 1 day or shorter were included. The analysis was restricted to cases in which both the facility and the endoscopist were in-network. [..] The typical … Read More

Going Beyond One Size Fits All in Surgical Bundled Payments

“In existing [bundled payment] programs, surgeons are subject to identical episode length, metrics, and reimbursement. One potential unintended consequence of this one-size-fits-all approach is an uneven playing field for different surgeons and organizations—a dynamic that may explain why hospitals that bundle joint replacement differ from those that do not. Our anecdotal experiences at academic medical centers corroborate this evidence: hesitation among colleagues often stems from a belief of poor fit due to practice setting and patient case mix. [..] One approach to attracting more surgeons could be to create options (“participation tracks”) that involve delivering different sets of services to … Read More