White House advisers urge faster shift to value-based payment

Insurers should speed up the adoption of value-based reimbursement so the entire healthcare industry can implement systems-engineering principles that will boost efficiency of care, says a new report from the President's Council of Advisors on Science and Technology.

Systems-engineering principles, which already have benefited other industries, analyze and measure complex systems to improve efficiency, productivity and quality, PCAST notes.

Implementing these tools could help payers and providers eliminate one of the root causes of rising healthcare costs--inefficient care. But a systems-engineering method can't be applied until insurers shift away from fee-for-service payment to a value-based system.

The current fee-for-service payment is exactly what encourages inefficient care. And although a "small number of healthcare organizations" have implemented systems-engineering into their processes with "dramatically positive results," the report says incorporation on a widespread scale requires value-based payment as the dominant reimbursement method.

"To support needed change, the nation needs to move more quickly to payment models that pay for value rather than volume," PCAST Co-Chairs John Holdren, director of the Office of Science and Technology Policy, and Eric Lander, president at the Broad Institute of Harvard and MIT, wrote in the report's cover letter to President Barack Obama. "These new payment models depend on metrics to identify high-value care, which means that strong quality measures are needed, especially about health outcomes," they wrote.

With widespread use of value-based care, the U.S. healthcare system can apply systems-engineering to redesign processes of care around the patient, in conjunction with support from community and medical resources, according to the report.

The PCAST also recommended the U.S. Department of Health and Human Services lead efforts to develop a "robust" national health information infrastructure, including urging providers to adopt interoperable electronic health records, FierceHealthIT previously reported.

To learn more:
- here's the report (.pdf)

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