A value-based payment system could revolutionize health care as we know it
The health care payment system is due for a major overhaul.
- Value-based health care focuses on tangible improvements in patient care outcomes.
- The goal is to reduce the per capita cost while improving treatment.
- Current fee-for-service payment models focus too much on quantity and not quality of care.
Throughout the century, miraculous advances in medicine and scientific breakthroughs have brought the health care profession to a new zenith of excellency. Incurable diseases have been eradicated and conditions that were once death sentences are now vanquished with a quick pill or surgical fix.
But underneath all this progress lies a vestigial sore weighing down the entire health care industry – the limited health care financial system. While medical care and technology itself has advanced to greater heights, the underlying business and financial functions are lacking.
The mounting costs of a fee-for-service health care payment model and subsequent lack of oversight on the quality of care is becoming too much to handle for both individuals and employers alike.
A recent report from the Health Care Cost Institute found that per-person out of pocket spending has reached an all time high for Americans under the age of 65 who are covered by employer-sponsored insurance.
Data gathered from that same report shows that employer coverage has risen 44% per enrollee between 2007 and 2016. The total cost of spending on employer health care services has ballooned to an annual cost of nearly $700 billion.
What's the underlying issue for this? The problem may be endemic to a fee-for-service payment model.
Time to shift to a value-based payment system
The current state of payment systems in health care takes the form of disjointed and disparate bill of costs that don't take into account whether or not the treatment was valuable. Let's look at a simple example on why this is so.
- Fee-for-service care - A patient undergoes surgery. They end up getting an infection. On their next visit back to the medical center the patient now bears the cost to treat it.
- Value-based care - A patient undergoes surgery. They end up getting an infection. On their next visit back to the medical center the hospital bears the cost to treat it.
While this is an overly simplified example, it cuts to the heart of the issue. Health care services and payments need to be held accountable for what value they bring and not what laundry list of treatments they doll out.
Fee-for-service models lower quality of care and are a disservice to patients and employers alike. Michael J. Dowling, president and CEO of Northwell Health, argues that the rising costs are intrinsically tied to lower quality of care. "Value-based care ties reimbursement to quality, not quantity of care. The goal is to incentivize better care and lower costs," he writes in "Health Care Reboot".
Dowling imagines a world where the quality of care is the standard rather than the volume of care.
A lot is at stake here. Business as usual is going to be unsustainable for both hospitals, employers and individuals. For institutions like Northwell Health, clinical outcomes are paramount; health care improvement and high-quality care need to become the norm.
And patients agree. In a quest to figure out just what value-based health care means to patients and physicians, The University of Utah conducted a far-reaching survey. The results showed that patients identified a few key characteristics of high-value health care:
- Around 62% considered the quality and effectiveness of their care to be the most important factor of high-quality health care.
- 26% were most concerned with their out-of-pocket costs.
Major companies are already taking note and are springing into action with new plans.
Employer initiatives with value-based health care plans
Are employers doing enough for their employees?
For quite some time, companies tried to cut down on costs using measures like increasing employee expenses and limiting their coverage and access to certain specialists. But now they're realizing that this is not the way to go, and are instead taking a more active role in developing their value-based health plans.
Multinational insurance broker Willis Tower Watson has found that an increasing number of companies are opting to negotiate directly with health care providers to apply value-based payment systems.
According to its survey, in 2017 only 6% of employers were pursuing the aforementioned plans. Twenty-two percent of employers surveyed said they intended to start working directly with providers to change the payment system in 2019.
More promising numbers from the same survey point towards a majority 65% of companies also making this a priority over the next three years.
This rising trend has put forth a lot of new exciting initiatives. On the ground floor, better care is already being seen. One such example is from something called a patient-centered medical home, where a team of medical professionals build a personal relationship with their patient to anticipate their needs and make sure they're cared for in the best manner. This would include screenings based on the patient's age, gender and medical condition.
This approach would be most likely used for patients with high-cost chronic conditions. David Lansky, CEO of the Pacific Business Group on Health, initiated something like this in his company's Intensive Outpatient Care Program.
Lansky explained that his organization:
"...identified 15,000 people with multiple chronic conditions and severe challenges in getting good care, and helped pay for primary care teams that would deliver coordinated care, address social needs, and address mental health needs, all under a prospective payment to the care team."
More and more companies are embracing this new value-based approach. The results are reduced hospitalizations and costs. Walmart's Center of Excellence program has also been leading the charge to cut costs and improve care with an integration of the best care it can provide for its employees.
While this is just the beginning in this new trend, we're already seeing that value-based payment models are incentivizing better care for all.
That's only counting revenues from taxes, fees, and licenses.
Photo credit: Carlos Osorio / Getty contributor
- Colorado's Department of Revenue announced last week that the recreational marijuana industry has generated more than $1 billion in revenues from a total of $6.56 billion in sales.
- Legalization remains a controversial issue in Colorado, where only 55% of residents voted to legalize recreational marijuana in 2012.
- Ten U.S. states and the District of Columbia have legalized recreational marijuana, with Illinois set to legalize it in 2020.
Can dirt help us fight off stress? Groundbreaking new research shows how.
- New research identifies a bacterium that helps block anxiety.
- Scientists say this can lead to drugs for first responders and soldiers, preventing PTSD and other mental issues.
- The finding builds on the hygiene hypothesis, first proposed in 1989.
Are modern societies trying too hard to be clean, at the detriment to public health? Scientists discovered that a microorganism living in dirt can actually be good for us, potentially helping the body to fight off stress. Harnessing its powers can lead to a "stress vaccine".
Researchers at the University of Colorado Boulder found that the fatty 10(Z)-hexadecenoic acid from the soil-residing bacterium Mycobacterium vaccae aids immune cells in blocking pathways that increase inflammation and the ability to combat stress.
The study's senior author and Integrative Physiology Professor Christopher Lowry described this fat as "one of the main ingredients" in the "special sauce" that causes the beneficial effects of the bacterium.
The finding goes hand in hand with the "hygiene hypothesis," initially proposed in 1989 by the British scientist David Strachan. He maintained that our generally sterile modern world prevents children from being exposed to certain microorganisms, resulting in compromised immune systems and greater incidences of asthma and allergies.
Contemporary research fine-tuned the hypothesis, finding that not interacting with so-called "old friends" or helpful microbes in the soil and the environment, rather than the ones that cause illnesses, is what's detrimental. In particular, our mental health could be at stake.
"The idea is that as humans have moved away from farms and an agricultural or hunter-gatherer existence into cities, we have lost contact with organisms that served to regulate our immune system and suppress inappropriate inflammation," explained Lowry. "That has put us at higher risk for inflammatory disease and stress-related psychiatric disorders."
University of Colorado Boulder
This is not the first study on the subject from Lowry, who published previous work showing the connection between being exposed to healthy bacteria and mental health. He found that being raised with animals and dust in a rural environment helps children develop more stress-proof immune systems. Such kids were also likely to be less at risk for mental illnesses than people living in the city without pets.
Lowry's other work also pointed out that the soil-based bacterium Mycobacterium vaccae acts like an antidepressant when injected into rodents. It alters their behavior and has lasting anti-inflammatory effects on the brain, according to the press release from the University of Colorado Boulder. Prolonged inflammation can lead to such stress-related disorders as PTSD.
The new study from Lowry and his team identified why that worked by pinpointing the specific fatty acid responsible. They showed that when the 10(Z)-hexadecenoic acid gets into cells, it works like a lock, attaching itself to the peroxisome proliferator-activated receptor (PPAR). This allows it to block a number of key pathways responsible for inflammation. Pre-treating the cells with the acid (or lipid) made them withstand inflammation better.
Lowry thinks this understanding can lead to creating a "stress vaccine" that can be given to people in high-stress jobs, like first responders or soldiers. The vaccine can prevent the psychological effects of stress.
What's more, this friendly bacterium is not the only potentially helpful organism we can find in soil.
"This is just one strain of one species of one type of bacterium that is found in the soil but there are millions of other strains in soils," said Lowry. "We are just beginning to see the tip of the iceberg in terms of identifying the mechanisms through which they have evolved to keep us healthy. It should inspire awe in all of us."
Check out the study published in the journal Psychopharmacology.
FDA guidelines say men can't donate blood if they've had sex with another man in the past 12 months.
- At least seven 2020 Democratic presidential campaigns have called for an end to the FDA's guidelines, as reported by The Independent.
- It would be the first year that the issue has been a focus of presidential candidates.
- The American Public Health Association said the FDA's ban isn't based on science.
In 1983, as the HIV and AIDS was ramping up in the U.S., the Food and Drug Administration banned blood donations from men who'd ever had sex with other men. The policy remains active, though in 2015 the FDA narrowed its ban to apply only to men who've had sex with another man in the past year.
Soon, the ban could be lifted altogether.
A growing number of 2020 Democratic presidential candidates are calling to end the long-standing policy, which gay-rights advocacy groups say promotes homophobia and is no longer necessary, thanks to modern disease-screening techniques. Most harmfully, the ban could be preventing healthy blood from reaching patients who need it, when blood shortages are already alarmingly common.
"The one-year deferral period for male blood donors who identify as gay and bisexual has nothing to do with science or medicine and everything to do with outdated stigmas against the LGBTQ community," a spokesperson for Beto O'Rourke's campaign told The Independent, which received similar responses from the campaigns of Elizabeth Warren, Bernie Sanders, Kamala Harris, Kirsten Gillibrand, John Delaney, and Marianne Williamson.
"Our blood screening policies must be based on 21st century medical evidence, not outdated biases about which populations carry more risk of HIV transmission. These policies serve no one and will only limit access to life-saving blood donations."
The ban hasn't been a key issue in past elections, said William McColl, director of health policy with the advocacy group AIDs United.
"I'm pleased to hear that they're talking about it. I think it shows that we've come a really long way in a short period of time," McColl told The Independent. "This discussion wasn't happening even 10 years ago, for sure."
House Democrats tried to lift the FDA's current policy in 2016, but the legislation never passed.
Is the FDA's current policy based on science?
Not really, according to Georges C. Benjamin, the executive director of the American Public Health Association.
"[The FDA's 12-month policy on gay donors] continues to prevent low-risk individuals from contributing to our blood supply and maintains discriminatory practices based on outdated stereotypes," he wrote in comments submitted to the FDA in 2015. "Instead, we strongly urge FDA to issue guidance that is grounded in science to ensure a safe and robust blood supply."
Benjamin noted that current screening technology can identify HIV in blood donations within 11 days, and that the odds of an infected sample making it past screening is about 1 in 3.1 million. The Williams Institute, a think-tank at UCLA School of Law, estimates that eliminating the ban would add 615,300 pints to the national blood supply each year, an increase of about 4 percent.
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