Getting More From our Health Care: Changing From Volume to Value
By Christine Hahn
Health care reimbursement in America is changing. What was once deemed innovative and cost-effective is taking a left hand turn. This evolution has been influenced by several factors, including increased costs caused by an aging population, an increase in the number of patients with multiple chronic conditions, and improvements in health care technology. Additionally, the Affordable Care Act (ACA) brought about multiple changes in the way physicians are paid, necessitating a change of focus.
The shift in how physicians are being reimbursed is known as a change from “volume to value.” What does this mean? Volume in this case refers to physicians being reimbursed for each individual service they provide (fee-for-service payment system). Value-based care, also known as total cost of care or pay-for-value, is the system that is on the horizon.
Drivers of the shift from volume to value include economic and social changes; each change requires us to prepare now for a model that will reimburse physicians for outcomes and efficiency or value, not volume. Economic drivers include the rising costs of health care. This has been influenced by a host of factors, but most glaringly includes misaligned incentives for physicians and waste. Many argue that the fee-for-service payment reimbursement model encourages excessive and redundant care and leads to overall waste in the healthcare system. The value focus is different, in that the physician is paid for the length of care episode (e.g. per visit), not per test, lab, etc.
Social realities also play a role in the need to focus on value. For example, the normal lifestyle for many Americans is sedentary, coupled with a diet high in fat. This lifestyle has contributed to a rising obese population. Obesity increases the risk of disease, in turn increasing health care costs. Special focus paid to this patient population over the course of their life can help reduce addition disease, such as heart attacks, in turn decreasing costs. Other social variables include the increased number of insured patients and a decreased supply of primary care physicians. Societal factors are important because they impact the way the health care system functions and therefore must be considered when redesigning a reimbursement model.
As previously stated, the overarching goal of the volume to value shift is to adopt a payment model that rewards value and eliminates waste. One way Connecticut’s health centers are doing this is by adopting the use of the Patient Centered Medical Home (PCMH) model. PCMH is a way that health centers and primary care practices can structure their care, with a focus on improving health care quality, continuity, and coordination. Continuity refers to patients seeing the same providers when he or she visits the office. A team of health care providers (physician, nurse practitioner, nutritionist, and other specialists) are dedicated to each patient, and follow him/her throughout the entirety of his/her time with that health center or practice. A focus on coordination is meant to increase communication between team members and with the patient, also improving the level of supports to the care team, such as patient follow-up and improvements in referral systems. Continuity of care is also designed to decrease errors, such as duplicating medication orders. Stitched into the core fabric of PCMH are prevention services. Preventing illnesses and complications is a major way to improve the quality of life for our patients while decreasing the costs of care; it truly is a win-win. While not all of Connecticut’s health centers have adopted the PCMH model, most (9 of 14) are already designated as PCMH – with more coming on board soon – making Connecticut a pioneer among fellow states.
The transition from volume to value comes with challenges, indicative of any major change. Admittedly, it will take time, but with collaboration and commitment this change will be transformative. This change is our future.
Christine Hahn is a graduate student studying Public Health at the University of Connecticut.