My recent column explaining why the healthcare industry can't wait to innovate included a quick list of buzzwords often associated with transforming healthcare.
Given the gift of hindsight, I thought I may have missed one: value-based care. Given recent events and, perhaps, some meta-hindsight, I may have been right the first time.
Yes, value-based care suffers from the same maladies that those buzzwords do--hard-to-measure ROI (wellness), a large learning curve (analytics), tremendous scope (population health) and socioeconomic divide (digital health). Yes, those initiatives also get the government's stamp of approval.
However, value-based care now comes with a deadline and with penalties for non-compliance. Both should push this initiative beyond a buzzword and into the realm of meaningful reform.
This happened quickly. It was only three weeks ago that the Department of Health and Human Services announced its plans to tie 50 percent of all Medicare payments to value-based care models by 2018, compared to just 20 percent of payments today, as FierceHealthFinance reported.
The announcement left the healthcare industry divided. In the days that followed, Anthem announced its support for value-based payments, and other insurers followed suit. Meanwhile, the provider community opted to adopt a wait-and-see approach to value-based payments.
Statements from the the American Medical Association, the American Hospital Association and the Federation of American Hospitals, among others, all point to a need to exercise caution when approaching value-based care. We'll do it, the groups said, but only if we know it will work.
It brings to mind an adage often heard at healthcare conferences, especially when the topic of innovation comes up: No one wants to be first--but everyone wants to be second.
Yes, value-based care is risky, and hospital executives rightfully fear that value-based contracts will hurt the bottom line. However, it seems callous to suggest that a business model that ultimately strives to do what's best for all stakeholders--above all, patients--isn't worth doing without careful examination and consideration.
Health insurers, then, find themselves in an unusual position in the value-based care debate. The entities so often vilified for putting profits before people, for retaining Byzantine business practices while the rest of the world moves forward, suddenly occupy the moral high ground.
Payers are declaring a willingness to start putting the inefficiencies, expenses and misplaced incentives of a fee-for-service healthcare system behind them in the name of providing value-based care. For example, Blue Cross Blue Shield of Michigan generated $50 million in savings in 2013 through value-based contracts with five health systems in the state.
Meanwhile, the literal caregivers of the industry hesitate to change. In a way, it's understandable. The fee-for-service system is equal parts familiar and lucrative. If I were asked to do my job differently, and simultaneously sign off on an equally different compensation scale that could conceivably pay me a lot less, I'd hesitate, too. On top of that, the accountable care organization model, designed largely if not entirely around the idea of promoting value-based care, continues to face questions.
The difference, of course, is that the familiar and lucrative nature of healthcare is what put the United States in its $3 trillion mess in the first place. Payers deserve as much blame for this as providers, as they--along with pharmaceutical companies, government agencies at all levels and even patients--let the status quo remain in place for so long.
All that said, value-based care is one initiative--dare I say, one innovation--that can bring the industry forward. Yes, it's happening at a quick, almost uncomfortable pace, but the most dramatic and lasting changes in life tend to do just that.