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Biden Urged to Boost Value-Based Care, Decrease Healthcare Costs

Analysis  |  By Christopher Cheney  
   January 18, 2021

The leader of America's Physician Groups pushes for acceleration of the shift from the fee-for-service care model to value-based care.

The leader of a physician association focused on the transition to value-based care has written a letter to the incoming Biden administration urging adoption of three approaches to improve the U.S. healthcare system.

Led by innovations adopted by the Centers for Medicare & Medicaid Services, the country has been shifting away from the fee-for-service (FFS) care model to value-based care models such as Medicare Advantage health plans. The goal of this movement is transitioning from the FFS care model's emphasis on reimbursing medical services based on the volume of services provided to value-based care models that emphasize lowering costs and increasing quality.

The letter to the Biden administration is from Donald Crane, JD, president and CEO of America's Physician Groups. APG represents more than 300 physician groups that employ or contract with about 195,000 physicians who provide care to nearly 45 million patients.

Crane told HealthLeaders that the FFS care model is not serving the country well. "Fee-for-service is a barrier to quality improvement and is ruinously wasteful. Our citizens deserve better," he said. 

Crane's letter calls on the Biden administration to take three approaches to strengthening the U.S. healthcare system.

1. Hasten shift from fee-for-service reimbursement to value-based care

The Biden administration should support adoption of budget-based prospective payment models, Crane says in his letter. "As providers and organizations continue to make investments in accepting risk and providing high quality care at a low cost for patients, supporting the movement to budget-based prospective payment models at the physician group level will provide them with the proper incentives to encourage the acceptance of risk."

Value-based care models represent a step forward in addressing social determinants of health, Crane says. "These models also play an integral role in addressing social determinants of health through initiatives centered around behavioral health, increased screening of patients for risk factors of these determinants, and other proactive methods of care. The social determinants of health-focused care that physicians in value-based models offer provide a level of financial value that must be supported moving forward."

If Joe Biden follows through on his campaign pledge to create a public option health plan, it should feature a value-based payment model, Crane says. "We are aware that a public healthcare option will be one of the avenues examined as a possibility in extending the best care possible. Should a plan for a public healthcare option be drafted, we would recommend that for physician groups a budget-based prospective payment system be utilized."

2. Bolstering Medicare Advantage

Medicare Advantage is playing a crucial role in the shift from FFS to value-based care, and the program should be actively supported, Crane says. "An integral part of the move from volume to value is supporting Medicare Advantage (MA) and the role it plays in shifting healthcare in this direction. Providers and health plans who engage in high-value, risk-based MA contracts are working diligently to improve overall quality in the MA program and should be rewarded for those efforts."

Medicare Advantage health plans should embrace budget-based prospective payment, he says. "Congress, the Centers for Medicare & Medicaid Services, and stakeholders must work together to put in place incentives that further drive the value evolution in MA just as they are working to do so in traditional Medicare. These incentives should offer both positive and negative reinforcement that will motivate MA plans to push budget-based prospective payment downstream to the physician group level."

3. Decreasing healthcare costs

To lower healthcare costs, the Biden administration should encourage the ongoing shift of care from high-cost settings such as hospitals to low-cost settings such as the home and ambulatory care, Crane says.

"Transferring more patient care to ambulatory or home settings is making life changing strides in offering increased convenience and care options for patients while lowering costs and delivering improved outcomes. Technology has also progressed to the point where virtual visits offer even more convenience for patients while still allowing providers to effectively treat those suffering from chronic conditions while monitoring their health and creating effective care plans for treatment. The advantages that telehealth services represent for those patients with issues surrounding access to care, individuals with disabilities, and the elderly have been evident during the ongoing pandemic."

Lowering drug prices is another essential element of decreasing healthcare cost, he says.

"Rising prices have had a great effect on access to much needed medicines for those suffering from chronic conditions. The effects of high prescription drug costs also have systemic consequences, with patient non-compliance because of decreased access or the inability to afford medication leading to increased costs for the healthcare system in general through unnecessary hospitalizations, emergency services, and physician visits."

Efforts to decrease drug prices should include drug importation reform, value-based purchasing, and international pricing models, Crane says.

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


In a letter to the incoming Biden administration, America's Physician Groups President and CEO Donald Crane promotes adoption of budget-based prospective payment models.

Medicare Advantage is playing a crucial role in the shift from fee-for-service to value-based care, and the health plans should be actively supported, Crane says.

Efforts to lower healthcare costs should include decreasing drug prices, Crane says.

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