Well, it’s finally March and the accompanying college Hoops Madness is just around the corner. Speaking of madness, last week I had the opportunity to attend a value-based care conference and heard from some of the country’s thought leaders about a variety of related topics. At the risk of unwittingly falling victim to “recency bias,” let’s explore the dilemma faced by providers who find themselves at the intersection of volume and value.
Before we begin, let’s make sure we are speaking the same lingo. The transactional fee-for-service health care environment we all grew up in has frequently been described as a “pay for volume” construct. Simply stated, the more work you do, the more you get paid. Many practices have long recognized the economics forced upon them by the existing reimbursement structure. In fact, many practices track volume by counting RVUs and, in some instances, basing bonuses on production.
With the arrival of a number of value-based care models over the past several years, the phrase “pay for value” has emerged, and it is frequently used to highlight the differences these new payment models bring to the health economic table. From ACOs to BPCI to ESCOs, paying for value is being held in stark contrast to paying for volume. Frequently, the pay-for-value constructs are framed by what’s been referred to as the value equation:
Value = Quality/Cost
In theory, within a value-based program, we are paid not for how much work we do, but for how well we do the work. One can think about value as the financially efficient delivery of quality. Of course, measuring value is easier said than done.
Competing business models
One of the folks at the conference astutely highlighted the differences between the underlying business models one might find behind successful volume vs value programs. While none of us went into health care to make money, let’s walk through the following thought experiment. Assume you are the practice manager for a physician practice, or perhaps a hospital executive tasked with building a program to optimize revenue in a volume-based fee-for-service world. You might start by examining the fee schedule, selecting those services with the highest reimbursement, building capacity, and then filling those slots.
On the other hand, suppose your marching orders were to build a program to maximize revenue within a value-based program. In this instance, you would examine the needs of the population, determine how to meet those needs in the least expensive manner, and build that program, recognizing the approach is completely antithetical to what we’ve been doing for the past 30 years. To put a fine point on the approach to value-based care, one of the speakers on the last day of the conference stated, “value-based care means less.” Effectively less waste, less expensive sites of service, and less futile care (think end of life).
Stark and anti-kickback statutes
Speaking of insightful voices at the conference, we had the privilege of hearing Eric Hargan, Deputy Secretary, US Department of Health and Human Services, speak about regulatory reform. Delightful presentation and his responses to questions from the audience were clear, if not succinct. He was quick to point out that Stark was created in 1989, and that the law’s namesake, Representative Pete Stark, has on several occasions mentioned that many an attorney have thanked him for its creation. Although one might think Stark was written to prohibit pay for value, Hargan noted that the recent Requests for Information his department produced are truly intended to rethink these guardrails and ensure they are not standing in the way of progress. Combined with the concurrent review of the anti-kickback statute, it’s going to be very interesting to see what changes emerge in these regulations as the US health care system continues to adopt value-based programs.
Precision medicine vs population health
The final tension I’d like to surface today was raised by Dr Grace Terrell. Dr Terrell is no stranger to value-based care as she is one of the 13 folks that sit on the Physician-Focused Payment Model Technical Advisory Committee, thankfully abbreviated with the clever acronym PTAC. Of note, she’s intimately involved with a genomics company and a firm believer in the unrealized value of precision medicine. Dr Terrell astutely pointed out that population health is focused on identifying outliers and, where possible, eliminating variance in health care. She also was quick to point out that if we get precision medicine right, everyone will be an outlier. We will treat everyone based on their unique circumstances, and variance will rule the day.
Where EHRs bring value
Given the tension between volume and value, between pop health and precision medicine, what’s the average nephrologist to do? As the value ship sets sail, many feel as though they have one foot in the value boat and one foot on the volume dock. Navigating these waters can be treacherous. One thing is very clear however—navigating this changing landscape requires access to a robust EHR. Imagine trying to do this in the days of paper-based medical records. Sure, we all lament the flaws we see within our EHRs, but try to imagine identifying trends or outliers within a paper-based system. Recall the constant faxes between the office and the hospital when you were consulted to see your partner’s patient in the hospital (assuming someone in your office could locate the patient’s chart). And while we have not completely solved the interoperability holy grail, we are getting closer every year. Just ask the folks who have recently moved to Acumen 2.0. Access to the Epic backbone has opened many doors. With little fanfare, these nephrologists are able to see patient data captured by other providers. Line of sight to that information improves patient care and often can eliminate duplicative testing.
Interoperability and population health are not panaceas. They are tools that will make it easier to care for patients within increasingly complex payment models. The “value ship” has indeed set sail. Some of us are better prepared to take risks than others. But at the end of the day, the tools we need to succeed on this journey will be different, and many will reside within your EHR.
What are your thoughts about the intersection of volume and value? Drop us a note and join the conversation.
Terry Ketchersid, MD, MBA, practiced nephrology for 15 years before spending the past seven years at Acumen focused on the Health IT needs of nephrologists. He currently holds the position of Chief Medical Officer for the Integrated Care Group at Fresenius Medical Care North America where he leverages his passion for Health IT to problem solve the coordination of care for the complex patient population served by the enterprise.
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