Obamacare’s missing ingredient - value based purchasing

Obamacare has flaws.  Its first few years have largely dealt with getting uninsured folks affordable insurance.  However, the cost of insurance premiums is rising and care is not improving.

The problem is that the law has not paid enough attention to value based purchasing.  This is a strategy for improving health care quality while decreasing costs. It is something the public should know more about.

Value based purchasing is defined by the National Business Coalition as a strategy to "measure, report, and reward excellence in health care delivery."  The goal is to develop a system where ever-increasing quality of care is rewarded and achieved at the lowest possible cost.

To achieve a system of value based purchasing we need to meet several goals.  The first is the standardization of meaningful performance measurements.  Many of our current metrics look at the process of health care rather than the outcome.  For example, we measure whether or not mammograms are performed on women of a certain age and risk.  What we need to evaluate is what happens if the mammogram is positive.  What kind of care did the woman receive?  How is her health five years after the mammogram?

Another current performance measure is whether or not a hemoglobin A1C test (a measure of blood glucose control for the previous three months) has been performed on a patient with diabetes.  The more important measure is whether the health care provider was able to return an elevated value to a normal range.

Once standardization of meaningful performance measurement is achieved, the second element is transparency and public reporting.  Performance measures must be aggregated and accessible so that consumers and payers can review them and make informed decisions.  There also needs to be transparency in prices for health care services.  We know that within a given market, the price of a specific test, operation, or service can vary widely.  When employers or insurance companies pay for health care, they should encourage patients to choose providers that have the highest quality at the lowest cost.

Payment innovation is the third element of value based purchasing.  Successful payment innovation reimburses providers based on demonstrated quality and outcomes.  Our current reimbursement system is largely fee-for-service.  This incentivizes providers to do more regardless of whether or not it is indicated or effective.  A better option might be to pay providers for an episode of illness.  This would reward providers who can provide care for this episode most efficiently and effectively.  We should also reward providers who keep people well, especially those with chronic illnesses.

We need to make it easy for individuals to get excellent health care.  For example, most individuals with diabetes should have a yearly ophthalmologic examination.  However, the co-pay to visit a specialist such as an ophthalmologist can be as high as $50.  There should not be this financial barrier to receiving this service.  By detecting eye disease early on, we may be able to prevent blindness in individuals with diabetes.

Insulin is a lifesaving medication for some individuals with diabetes.  It is an expensive drug that many patients cannot afford.  So, patients with diabetes often take a lower dose of insulin than prescribed.  If the patient does not take the prescribed dose of insulin, he can become severely ill and the cost of treating him will be much higher than the cost of a bottle of insulin.  For patients with life threatening illnesses that require medications, the medications should be free.

The fourth element is informed choice by consumers.  Lifestyle choices are a major determinant of health care and health care costs.  Informed consumers are those who can make good decisions about smoking, dieting, etc. Through incentive programs and coaching, we can create strategies that encourage and motivate consumers to change their behaviors.

With proper data, consumers will also find it easier to make good choices between health care providers and health plans.  The choice should be based on value, which includes quality and cost.  The lowest cost provider might not be the best. Value based insurance designs rate medical procedures performed by different physicians according to quality and efficiency.  Financial incentives such as lower co-payments can be used to steer patients toward high value providers.

"Value based purchasing is the necessary catalyst for transforming the health care delivery system and getting us to the goal of a high quality and affordable system."  We all need to be more knowledgeable about this concept so we can achieve the triple aim of improved health care for the individual, improved health for the population we serve, and reduced cost with high quality.

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