The conversation about transitioning the American healthcare system from fee for service (FFS) to value-based care (aka, pay for performance) has been going on for more than 15 years. Still, it felt like time travel to come across a Health Affairs book review from 2006 by the late Princeton Professor Uwe Reinhardt that could have been written last month.
In evaluating what he describes as the “utopian vision” laid out in Michael Porter and Elizabeth Teisberg’s Redefining Health Care (a title, by the way, that can be recycled without penalty just as soon as the previous use has fallen out of the public memory), Reinhardt identifies a fatal flaw: Explaining what American healthcare should do to better treat patients without touching on how it might be accomplished.
“Unfortunately, [the authors’] book offers few practical hints on how the U.S. health system would transit from its current, allegedly negative-sum game to the allegedly positive-sum utopia [the authors] envision,” Reinhardt says. “That transition would vastly rearrange the distribution of economic power and clinical autonomy in our health system. It is naive to assume that the potential losers in that transition would simply roll over and accept their fate.”
The disconnect Reinhardt identified then remains true today. What to do is common knowledge; how to do it is a head-scratching, confounding pile of befuddlement.
Except that it’s not. As with overhauling campaign financing to help fix our broken political system, those who would make real healthcare change have insufficient power and the truly powerful have insufficient interest in making change.
If Only the Data Were Enough
What I interpret Reinhardt to be saying, either explicitly or implicitly, in much of his writing is that the desire to do something is fairly inconsequential absent the will and authority to do it.
This is significant, because the technological know-how to institute value-based care has been around for a while in the form of digital platforms that compile and organize (when we tell them to) data in ways that reveal information healthcare simply could not access before the digital age—data that is essential for value-based care.
In healthcare, these platforms are not yet fully mature, nor are they fully interoperable, which is somewhat puzzling given that the technology exists in other industries to drive alternative payment models.
“Recent technological breakthroughs have exponentially reduced the cost of data storage and compute, making it easier and less expensive to store more data than ever before,” reads a passage defining big data on Oracle’s web site. “With an increased volume of big data now cheaper and more accessible, you can make more accurate and precise business decisions.”
And you can make more beneficial patient care decisions.
But while healthcare IT platforms have proliferated throughout most care settings over the last decade-plus, value-based care approaches have not.
“Physician compensation continues to emphasize volume more than value,” says a Deloitte Insights report from last fall. “Physician compensation comes mainly from traditional sources, and meaningful performance bonuses are the exception rather than the norm. In 2020, as in 2018, almost all physicians (97 percent) relied on FFS and/or salary for their compensation and 36 percent also drew compensation from value-based payments.”
Like so much of the writing about healthcare, breathless pronouncements of an idealized future driven by digital technology never quite square with the everyday lived reality of doctors and nurses.
Improved Healthcare Through Shared Understanding
Even if Oracle and other companies make clear that the technology exists now to harness big data and overhaul healthcare, the key never was technological functionality. That’s necessary, yes, but it shifts healthcare policy and payment structures little if at all.
“The biggest challenges to health care technology are governance, policy, incentives, and a complex web of business relationships,” writes Edwin Miller, chief product officer for Audacious Inquiry. “Over roughly the last decade, the number of hospitals using electronic records has increased from just 9 percent to over 80 percent .. Despite the changes, far too many of these electronic systems operate in a silo, without connecting to and communicating with other clinics’ systems effectively.”
Yes, data silos and poor interoperability are still obstacles on the technical side, but they are not what keeps healthcare from gradually realizing value-based care. One might even imagine that technological challenges might just resolve of their own accord if systems and processes shifted to value-based models.
Instead, healthcare requires a change of perspective that prioritizes … well, value … and outcomes over services rendered. It’s an assertion you’ve heard so many times that you may think it’s the norm even now. While it isn’t, yet, it is the subject of a lot of detailed analysis.
A May 2020 article in Academic Medicine, for example, even mentions Reinhardt and his earlier use of the phrase “utopian vision” to outline a treatment framework the authors believe dovetails naturally with both the needs of the patient and the ethic of medical care.
“By focusing on the outcomes that matter most to patients, value aligns care with how patients experience their health,” the authors write. “…value-based health care’s focus on better health outcomes aligns clinicians with their patients. That alignment is the essence of empathy … This intrinsic motivation is often missing in the health care system, where clinicians are directed to spend countless hours on tasks that do not impact their patients’ health.”
Like Porter and Teisberg, the Academic Medicine article presents a serious, thoughtful argument for value-based care. The authors also cite examples where forms of value-based care seem to be working and suggest that the transition must start with medical school training.
The Lingering Disconnect
Perhaps medical school is a good place to start, but it probably still won’t move the needle in terms of actually changing the way care is insured, provided, paid for, and generally overhauled.
For starters, as Robert Pendleton writes in Harvard Business Review, we might try bridging the gap between what providers and patients define as value.
“Frankly, I was stunned by the degree of this misalignment between patients and physicians (and, by extension, the care delivery organizations the doctors work for),” Pendleton says of an extensive survey conducted by University of Utah Health. “Notably, the Value survey found a striking lack of consensus on who had responsibility for ensuring that health care embodies the desired high-value characteristics. Moreover, the survey’s respondents generally displayed limited understanding of how the health care system works … for example, only 4 percent of patients and physicians recognize that an employer’s choice of health plan affects out-of-pocket costs.”
The survey results Pendleton references have reliably not changed much since this survey was conducted, and they strongly suggest that what’s most needed in creating real healthcare change is a shared understanding of what has value and what the goals are. Arguably, health systems and the countries largest payer, the federal government, can do the most to create a shared vision and then disseminate the information necessary to create buy in.
In the meantime, perhaps we can agree that more sophisticated healthcare IT platforms and more hand-wringing about interoperability, while necessary, will not magically fix what ails the healthcare system. While many, many individual healthcare organizations are doing well in moving toward value-based care, healthcare in America remains an archipelago of expensive, high-quality care surrounded by vast oceans of marooned providers.
What’s required to build the necessary bridges is shared definitions of value and collective action—objectives that may prove much harder to realize than making computer systems communicate.