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.
How to manage your time so you can actually accomplish what you want to
- In a world that's always online, it's easy to feel like we have insufficient time for ourselves, or to spend with our families and loved ones.
- Working out what you need to get done each day, and how long it will take, will allow you to create priorities on which you can focus your available time.
- If you find the traditional methods of mindfulness meditation too difficult, then meditative practices such as yoga or even running can also be extremely beneficial.
Numerous U.S. Presidents invoked the Insurrection Act to to quell race and labor riots.
- U.S. Presidents have invoked the Insurrection Act on numerous occasions.
- The controversial law gives the President some power to bring in troops to police the American people.
- The Act has been used mainly to restore order following race and labor riots.
It looks like a busy hurricane season ahead. Probably.
- Before the hurricane season even started in 2020, Arthur and Bertha had already blown through, and Cristobal may be brewing right now.
- Weather forecasters see signs of a rough season ahead, with just a couple of reasons why maybe not.
- Where's an El Niño when you need one?
Welcome to Hurricane Season 2020. 2020, of course, scoffs at this calendric event much as it has everything else that's normal — meteorologists have already used up the year's A and B storm names before we even got here. And while early storms don't necessarily mean a bruising season ahead, forecasters expect an active season this year. Maybe storms will blow away the murder hornets and 13-year locusts we had planned.
NOAA expects a busy season
According to NOAA's Climate Prediction Center, an agency of the National Weather Service, there's a 60% chance that we're embarking upon a season with more storms than normal. There does, however, remain a 30% it'll be normal. Better than usual? Unlikely: Just a 10% chance.
Where a normal hurricane season has an average of 12 named storms, 6 of which become hurricanes, and 3 of which are major hurricanes, the Climate Prediction Center reckons we're on track for 13- to 29 storms, 6 to 10 of which will become hurricanes, and 3 to 6 of these will be category 3, 4, or 5, packing winds of 111 mph or higher.
What has forecasters concerned are two factors in particular.
This year's El Niño ("Little Boy") looks to be more of a La Niña ("Little Girl"). The two conditions are part of what's called the El Niño-Southern Oscillation (ENSO) cycle, which describes temperature fluctuations between the ocean and atmosphere in the east-central Equatorial Pacific. With an El Niño, waters in the Pacific are unusually warm, whereas a La Niña means unusually cool waters. NOAA says that an El Niño can suppress hurricane formation in the Atlantic, and this year that mitigating effect is unlikely to be present.
Second, current conditions in the Atlantic and Caribbean suggest a fertile hurricane environment:
- The ocean there is warmer than usual.
- There's reduced vertical wind shear.
- Atlantic tropical trade winds are weak.
- There have been strong West African monsoons this year.
Here's NOAA's video laying out their forecast:
ArsTechnica spoke to hurricane scientist Phil Klotzbach, who agrees generally with NOAA, saying, "All in all, signs are certainly pointing towards an active season." Still, he notes a couple of signals that contradict that worrying outlook.
First off, Klotzbach notes that the surest sign of a rough hurricane season is when its earliest storms form in the deep tropics south of 25°N and east of the Lesser Antilles. "When you get storm formations here prior to June 1, it's typically a harbinger of an extremely active season." Fortunately, this year's hurricanes Arthur and Bertha, as well as the maybe-imminent Cristobal, formed outside this region. So there's that.
Second, Klotzbach notes that the correlation between early storm activity and a season's number of storms and intensities, is actually slightly negative. So while statistical connections aren't strongly predictive, there's at least some reason to think these early storms may augur an easy season ahead.
Image source: NOAA
Batten down the hatches early
If 2020's taught us anything, it's how to juggle multiple crises at once, and layering an active hurricane season on top of SARS-CoV-2 — not to mention everything else — poses a special challenge. Warns Treasury Secretary Wilbur Ross, "As Americans focus their attention on a safe and healthy reopening of our country, it remains critically important that we also remember to make the necessary preparations for the upcoming hurricane season." If, as many medical experts expect, we're forced back into quarantine by additional coronavirus waves, the oceanic waves slamming against our shores will best be met by storm preparations put in place in a less last-minute fashion than usual.
Rossy adds, "Just as in years past, NOAA experts will stay ahead of developing hurricanes and tropical storms and provide the forecasts and warnings we depend on to stay safe."
Let's hope this, at least, can be counted on in this crazy year.
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