The pizza man and value-based healthcare

Yesterday afternoon, I walked into my local pizzeria for lunch, and found myself witness to a healthcare reform lecture. The pizzeria owner, a reasonably well-informed man if not a health policy expert, was giving one of his employees the lowdown on what he felt was wrong with the healthcare system.

As I'm sure is the case with many of you, I try to stay largely out of health reform debates when ambling around my neighborhood--this is an emotional subject, and nobody wants their pizza served cold ever after--but somehow I couldn't help myself in this case.

The store owner, "Joe," came over to take my check, and I said to him: "You know, there's a few things  you might want to know about this whole debate that you might not have heard before." (OK, I may have been a bit less temperate, since Joe's on the opposite end of the political spectrum to me, but the exchange was still friendly enough.)

Joe said he agreed that reform needed to happen, and that he felt said tort reform was critical. I countered that tort reform only accounted for a tiny fraction of costs--that inefficient care in various forms was our biggest challenge. I noted that Congress is looking closely at a scheme known as "value-based healthcare" which would reward doctors and hospitals for working together and being more efficient.

Then I paused. And I realized that beyond that, I couldn't explain to a bright, interested, relatively open-minded consumer much more than that about what's probably going to emerge as our key strategy for taming the healthcare cost mess. Worse, I realized that I wasn't sure I could explain value-based healthcare much better to a doctor or hospital exec who hadn't heard the term.

Is it capitation? Not exactly. Is it pay for performance? Sort of. Is it lending Japanese production methods to healthcare? Possibly. Is it something we have a handle on? Definitely not.

Folks, I realize that structuring effective payment systems and incentives are the bedrock problem of our generation of professionals. I know we're going to struggle with this for some time to come.

But in the meantime, if someone like me who spends 10 hours a day researching healthcare economics and business trends can't succinctly tell Joe the Pizza Shop Owner what value-based healthcare is, I think the whole healthcare reform effort is in a bit of trouble. How about you? - Anne