Value-based care promises to deliver better healthcare for less money. For years, US healthcare providers and institutions have received payments for care services rendered. This fee-for-service model unintentionally encouraged behaviors that might not have been the best for patients – from seeing more patients per day to ordering tests and procedures that may not have been absolutely necessary. The fee-for-service model has also contributed to the high cost of healthcare in the United States. Finally, for all the right reasons, the US healthcare system sees the need to focus more on patient outcomes and tie payment to the level of healthcare “value” delivered.
The question is: can we realistically do this? Or, is value-based care the holy grail of healthcare, a goal of mythical proportions that the complex US healthcare system can’t possibly achieve? Certainly, there are many layers of constituents to align for value-based care to truly take hold:
- Patients – the heart and purpose of healthcare!
- Health care institutions – integrated networks, individual hospitals, physician clinics, etc.
- Payers (public and private)
- Pharmacy benefit managers (PBMs)
- Industry – biopharmaceutical, medical diagnostics, and medical device and technology companies
All of these important players make their own unique contributions to our healthcare system, and they have their own needs and interests. While the ultimate goal of healthcare is to build and sustain healthy people and healthy communities, it’s also true that the healthcare industry-at-large forms a substantial part of the country’s economic backbone. For a value-based care model to work on a large scale, much work must be done to quantify the benefits for all-important healthcare partners.
A value-based care model has plenty of benefits to go around, and the list below provides just a few of the important ways this model can help the US healthcare system.
Much work needs to be done to quantify the benefits for biopharmaceutical, medical device, and medical diagnostics companies, as well as PBMs, as their economic models could be negatively impacted by a value-based care model.
In our company’s dealings with industry, we work with many people who seem to be defined by their patient-centricity, rather than a profit motive or anything else. However, the challenge for industry is that most companies in the life sciences are publicly-held, for-profit entities, driven by shareholder demand for return on investment. Value-based care seems directly at odds with this model, yet, to even play in the healthcare space, one must attempt to balance several competing priorities.
Each industry stakeholder should see the emerging value-based care framework for what it is and align to it. For PBMs, that means going for greater volume (serving more patients) at lower prices. For biopharmaceutical companies, this means focusing on pipeline development to treat more illnesses, diseases, and disorders. Device companies must laser-focus on developing tools that help people in bigger ways, while diagnostics companies have perhaps the greatest challenge: developing tools to diagnose conditions earlier and with greater accuracy.
The truth is, as with many evolutionary developments in healthcare, there will be some early-adopters, others reluctant to jump in, and still others who will be laggards. Eventually as this new model of value-based care itself evolves and develops comprehensive benefits for all, this way of delivering healthcare can and should be irresistible.
It’s true that there are obstacles to implementing a value-based care model. A few of the biggest ones include:
- Too many payment options
- Lack of clear measures that can be applied across all patient illnesses, provider types and healthcare settings
- The cost of reporting (i.e., money for systems, time required to track and report) and determining whether the potential benefits for patients, providers, payers, etc. really outweigh the costs associated with tracking and reporting.
Plenty of great minds are busy thinking about the many different avenues that could lead to value-based care, including:
- Designing a single-payer system run by the national government
- Reducing regulations to clear the way for more provider-patient time and less “paper pushing”
- Opening doors to new healthcare entrants, like Google and Amazon/Berkshire/JPMChase, who can bring about innovation through technology, have capital to invest in solutions, and possess the trust of their large customer bases.
In the end, the US healthcare system may or may not reach its full value-based care potential. But, patients play an important role in pushing forward a value-based care model by becoming informed and involved consumers of our own healthcare. As our Paul Meade once wrote, “I really am responsible for my own healthcare. And it’s about time!” Not only is it about time for all of us to be more thoughtful, insistent consumers of our own healthcare, the future of our healthcare system may depend on it.
About the author
With more than 15 years of experience in helping life sciences and healthcare companies improve their stakeholder experience and engagement, Kristen has developed and managed customized services like speakers bureau selection and profiling of integrated health systems. Kristen has directed dozens of projects covering key opinion leaders, centers of excellence, and payers across multiple therapeutic areas.