It’s no secret that the U.S. healthcare system has become too complex, fragmented and expensive. The Affordable Care Act (ACA) catalyzed the movement away from today’s episodic, fee-for-service, disease treatment model and towards a value-based care delivery model, with a laser focus on improving the metrics that most impact patients: quality, access and affordability.
To help drive the healthcare system toward value, in January 2015 the Obama Administration announced the goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, and 50 percent by 2018.
In March of this year, the Administration announced that it had already hit its first target, 11 months ahead of schedule: an estimated 30 percent of Medicare payments were tied to alternative payment models as of January 2016. And pilot projects such as the Comprehensive Care for Joint Replacement (CJR) model provide a robust proof of concept.
While the transformation to a more patient-centered healthcare system can lead to greater efficiency and better patient outcomes, the new and experimental nature of the process means value-based care is still in its adolescence in terms of broader system adoption. Connected technology and data analytics are presenting new opportunities to better diagnose, monitor and manage patients and treatment, and will ultimately enable the transformation to a more patient-centered healthcare system.
“By focusing on outcomes for an episode of care, rather than separate procedures in care delivery, we are incentivizing hospitals, doctors and other providers to work together to provide high quality, coordinated care for patients,” said Patrick Conway, M.D., acting principal deputy administrator and chief medical officer at the Centers for Medicare and Medicaid Services (CMS). “Value-based initiatives are about paying for quality over quantity—spending our dollars more wisely and improving care for Medicare beneficiaries,” Conway said.
With a targeted mid-November release date, a new Washington Post, Philips sponsored survey of U.S. hospital system CEOs will shed light on current hospital and health system exposure to and planned investment in value-based care models. Solutions-focused questions gathered insights on:
- Investments in technologies that help extend care beyond the boundaries of a hospital’s four walls, including telemedicine, patient portals and remote monitoring
- Investments to enable the more efficient capture and interpretation of data such as EHRs, cloud-based platforms, predictive modeling software and analytics
- Modifications to hospitals’ mix of service offerings, and movement to more outpatient care, including diagnostic imaging
The road to adoption
Whereas most, if not all, of the hospital executives surveyed agreed that the shift to value-based care delivery is inevitable, some are actively building key capabilities for the transition while others are still reluctant.
Nevertheless, judging from the strong survey response rate, there’s a curiosity among all to understand how value-based care models work, their associated incentives, risks and potential financial outcomes. Surveys such as this can help inform ongoing best practice sharing and dialogue.
The move to value-based care is an inevitable and appropriate transformation of the healthcare industry. It is not a matter of ‘if,’ but rather how, and how fast,” said Michael J. Ferry, president and chief operating officer at Halley Consulting Group.
“Healthcare systems that embrace that reality and successfully adopt value-based principles and emerging payment systems will be best positioned for success as this new era unfolds. Those who remain entrenched in a volume-based mentality will find themselves competitively disadvantaged.”