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Perspectives on Value-Based Care

Posted by Matt Breese on Dec 15, 2015

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The healthcare industry approaches a massive shift in ideology with the introduction of value-based care. A review of recent sign-offs from major payer organizations demonstrates the velocity of the movement. Replacing the current fee-for-service healthcare model with an accountable care, value-based model, significantly affects the way in which payers, providers and manufacturers conduct business.

Much of the momentum from downstream payers, providers and patients derives from rising pharmaceutical drug costs and the focus on volume-based reimbursement at the point of care. These stakeholders call for accountability for costly treatments and reimbursement based primarily on outcomes. This translates to a model that maps drug costs directly to the efficacy of a treatment regimen, which could greatly affect upstream manufacturers. The launch of the PCSK9 inhibitor, Repatha, provided the first signs of this value-based approach where Amgen and Harvard Pilgrim announced a deal where unsuccessful treatment results directly correlate to payer rebates from the manufacturer. Risk-based negotiations present a new channel to obtain better alignment between pharmaceutical manufacturers and health plans through the mutual interest of providing the most effective treatments to patients.

Leading payers, such as Humana, pave the way for a more value-based healthcare system through strong incentives for providers. Represented by the $77 million distribution of primary care physician bonuses, Humana rewards value-based care through its Provider Quality Rewards Program. Federal initiatives that promote the importance of quality of care through Medicare payments have been around for some time now. However, Humana and similar payers add more fuel to the push towards value-based care at a shocking pace through alternative payment models and well-defined programs for their provider networks.

In order to achieve a more value-based healthcare system, coordinated care among providers proves to be an essential component of the equation. Recent research reveals that many healthcare stakeholders lack the ability to streamline care among the complex network of provider systems. The lack of preparedness is most obvious with smaller provider groups who lack the resources needed to effectively coordinate care. Additionally, much of the infrastructure in place from a technology perspective is provider-centric whereas value-based care requires more focus on the patient. An integrated system that focuses on a fully connected network of providers and payers supports the vision of value-based care.

A recent survey released via the American Academy of Family Physicians reveals some of the roadblocks from a provider perspective. Many HCPs cite the level of effort required from their practices in order to meet the needs of a completely new healthcare model. The challenge of balancing new process implementation with the added benefit to patients becomes a monumental obstacle for providers, specifically with smaller groups. The survey also reveals that 70% of physicians are not convinced that a value-based care model would translate to improved patient experiences at the point of care.

The significance of a value-based healthcare model means massive shifts in the way manufacturers, providers and payers operate. The movement gains tractions with the commitment from new stakeholders across the healthcare spectrum but unwinding a system built on fee-for-service will be quite an undertaking.

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Topics: Industry Trends, Market Access, Payer