WASHINGTON, D.C.—To the audience attending a keynote presentation Tuesday morning during the World Health Care Congress, the shift to value-based care simply isn’t going fast enough.
Robert Pearl, CEO of The Permanente Medical Group, who moderated a panel discussion on the topic, began the event by asking attendees to raise their hands if they think the healthcare system should move away from a fee-for-service payment system. Nearly every hand rose, and that was also the case when he asked if the shift was going too slowly.
“I’m not sure every physician in the United States would agree that it’s going too slowly, but I think this audience of experts around policy, certainly that is the case,” he said.
Thus, Pearl queried panel speakers Kurt Wrobel, the chief financial officer and chief actuary of Geisinger Health Plan, and Michael Tarnoff, the chief medical officer at the medical device company Medtronic, about how best to make that happen.
From Tarnoff’s perspective, one of the most important ways to drive toward value is to eliminate costly, harmful variation in care.
Too often, providers rely on their individual judgment and skill levels when deciding how to treat patients rather than evidence-based best practices, he said. That is especially true regarding providers’ attitudes toward minimally invasive surgery, which Tarnoff practices part-time at Tufts Medical Center in Boston.
“This variation in practice and in decision-making leads to variation in outcomes, and there you have a simplistic view of why the healthcare costs are rising and why things are so out of control,” he said.
To solve that issue, Tarnoff advocated for a two-pronged approach: using data and evidence as a guide for treatment decisions, and then finding a way to ensure providers deliver that evidence-based standard.
However, changing incentives to encourage quality and reduce variation is easier said than done, despite the strides the healthcare industry has made. One way that organizations can accelerate the shift from volume to value is to take a page from Geisinger by combining provider and payer, Wrobel said.
“Provider-sponsored health plans can do this simply more easily than other organizations,” he said, since they control the entire premium dollar and can sit down and have conversations with providers about some of the issues Tarnoff described.
However, not all organizations have the infrastructure in place that Geisinger has built to accomplish that, Wrobel noted. For them, other options include accountable care organizations and bundled payments, and he said both have advantages and disadvantages.
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For example, as an actuary, Wrobel is concerned about giving providers too much risk. The challenge with total-cost-of-care arrangements like ACOs, he said, is “now you’re taking risk for the entire population.”
In that case, a provider could have a couple bad events, or fail to understand the underlying medical risk of a population, and be hurt financially.
“Then you have potentially a poor outcome that’s independent of what you’re doing as a provider,” Wrobel added.
On the flip side, “the real advantage with bundled payments is you’re giving [providers] a more discrete level of risk,” or only having them take on risk within a defined episode of care.
Regardless of what mechanism is used in the shift to value-based care, Tarnoff said he thinks the whole system—government, providers, payers and patients—must get on board to enact change.
But as he’s dug into bundled payments, and seen how a change in payment structure can force change the behavior of providers and patients, Tarnoff sees one sector of the industry as being the most influential.
“I think the payer, and the changing of what the payer is willing to do, and how the payer is willing to contract, is probably the most powerful thing that could be done,” Tarnoff said. “Because it would immediately get incentives aligned.”