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A new chapter in value-based care

In early February, the US Department of Health and Human Services (HHS) announced that it will accelerate the shift toward payments based on value over volume (see the February 3, 2015 Health Care Current). HHS aims to have 90 percent of all payments in the traditional program tied to quality and value and 50 percent of all Medicare payments tied to quality or value through alternative payment models such as accountable care organizations (ACO) by 2018.

In the same week, a group of health systems, health plans, consumer groups, and policy experts announced the formation of the Health Care Transformation Task Force. The Task Force aims to have 75 percent of their business based on value by 2020.

Maybe it’s just me, but I think the road ahead could be challenging. Not impossible, but challenging.

We’ve identified some of the barriers:

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This last point is particularly salient to many health systems. While some payers are actively moving forward and testing new payment models in the value-based care space, others remain firmly rooted in their fee-for-service (FFS) ways. The road ahead could be especially difficult for health care providers that are trying to straddle the two canoes.

But, most agree that value-based care is going to happen. For many physicians, the current volume-based care mentality is going to be replaced by the sense that the better you do, the better your patients do, and the more the population will benefit. That is going to be something worth paying for.

These ambitious goals represent a signal from the administration that the federal government may be moving more quickly than some had anticipated. This pace is creating some anxiety around whether the policies the government will use to make this move will be fair, systematic and flexible enough for health systems to respond without going under and patients to have even better outcomes than before.

How can it be done?

Pay attention earlier: Incentives in our current system have helped build a culture of fixing patients only when they are broken.  Now, that culture is shifting. More and more, physicians are realizing that the culture needs to be one of helping patients maintain their health and catching problems early so the solution is minimally invasive.

Widen the focus on the patient: In the past, a doctor may have focused only on solving a very narrow problem. If a patient’s knee hurt, then a knee replacement was ordered to alleviate the pain. And the same was true for outcomes: If a patient had surgery, success was getting them discharged from the hospital in two days. Now, the scope has widened. That patient may be focused on the pain and also the fact that they cannot play golf. Now the desirable outcome is not only that they are discharged within a reasonable time, but that they can also return to the golf course within six months of their surgery.

Purchase the right tools: With the new dynamic of outcomes-focused care, organizations should invest in analytics and big data and the information technology to support them. You cannot pay for value if you can’t measure it. I worry that it could be very difficult to measure outcomes when so many patients – especially those on Medicare – have complex co-morbidities that muddy the waters. This reality may lead us back to full capitation where providers assume the full risk of a population sooner rather than later.

Look across the whole value chain: Care needs to become team-based and interdisciplinary. Health systems and physicians will need to look across the health care ecosystem for opportunities to help improve care and reduce spending. The typical knee replacement involves more than a surgeon. It also involves radiologists, anesthesiologists, occupational therapists, medical technology companies and more.

High costs and misaligned incentives are not a uniquely American issue. You might think that other countries are doing this better than we are in the U.S. It is true that many countries have national health programs. But, many do not focus on outcomes, and paying for value is not common. Having worked with health systems in many other developed economies in the past year, it is clear that population health management has not taken hold across the globe the way some may think it has.

There is a great deal of anxiety around how fast and how far value-based care will evolve. But some things won’t change: people will still get sick and they will still need health care. We have a shortage of health professionals that will probably get worse as the population ages. Even as the incentives in health care change, there always will be patients, work and opportunities for nurses and physicians.

Health care organizations looking to deliver on the promise of value-based care can begin to position themselves to win in the market now. Organizations that learn to manage risk, develop core competencies around the new provider-driven care management model, understand and act on data and define a strategic vision and business model with collaboration partners could be in a better position to successfully navigate this transformation.

The value-based care story is still unfolding. But, through HHS and private sector market forces, there is now an opportunity to join in and help write the ending.

Read the entire Health Care Current here and subscribe to receive weekly updates.


Author bio

Dr. Mitch Morris is the Vice Chair and Global Leader for the Health Care Sector at Deloitte, including Consulting, Audit, Tax, and Financial Advisory Services. Dr. Morris has more than 30 years of health care experience in consulting, health care administration, research, technology, education, and clinical care. Earlier, he served as a Senior VP of health systems and CIO at MD Anderson Cancer Center where he was also Professor in Gynecologic Oncology and in Health Services Research.