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Building the Business Case for Value-Based Care

John Commins, for HealthLeaders Media, February 26, 2014

HLM: Why does value-based care create so much unease among many providers?

Miller: A lot of the anxiety comes because people don't have the data. You have to have access to good data and in most cases healthcare providers can't do that. Medicare has only just recently started to release data, so that someone could actually do the kind of analysis that I recommend in my report.

Most health plans treat their data as a proprietary secret, but there are a number of communities around the country that have multi-payer claims databases where people can do these kinds of analyses.

HLM: Why should providers welcome the switch to value-based care?

Miller: You could actually do better in a value-based payment model. People have the perception that somehow it is going to be worse, but the sooner you get into it the better you may be able to do because you are able to capture a lot of the value out there now that isn't being captured.

Rather than staying in fee-for-service and hoping you may get a small increase in fees or that you don't get a cut in fees, it's better to ask 'Can I redesign care in a way that would allow me to be paid significantly more?'

Medicare has done a demonstration that has been operational now for several years called the Acute Care Episode Demonstration that bundled together hospital and physician payments for orthopedic and cardiac procedures and the physicians were able to earn up to 25% more than their standard fee-for-service payments by being able to redesign care and reduce the costs. That is far more of an increase in pay quickly than you could ever get by simply staying in the existing fee-for-service model.

HLM: Who should be at the table when providers build the business case for value-based care?

Miller: Step No. 1 is changing the way care is delivered. It is the physicians on the front lines who have to say 'Where do we think we are actually doing too much of something we shouldn't do or that we are not providing good care to the patients?'

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