Moving Specialties and the Whole Healthcare Industry to Value-Based Payment Models

During the final panel at the ACO & Emerging Healthcare Delivery Coalition^® in Nashville, Tennessee, panelists discussed the progress specialties have made in moving to value-based payment models, as well as the challenges facing the industry as a whole. The panel consisted of 3 individuals who provided perspectives from specific specialties, and 1 with an overall policy perspective.

Justin Bachmann, MD, of Vanderbilt University Medical Center, kicked off the discussion with the latest in cardiology. He noted that one important finding that has come out of the move to value-based care has been the importance of risk adjustment. The Hospital Readmissions Reduction Program from Medicare has led to discussion on adjusting for socioeconomic status, which he expects will continue.

He added that a lot of changes health systems and hospitals looked at to decrease readmissions, such as care coordinators and calling patients after discharge, “seem to have an initial effect of decreasing readmissions, but no effect on mortality.”

In the oncology space, there is an increasing recognition of the importance of value-based payment models and that there are cases where perverse incentives exist for clinicians to provide very high-cost, low-quality care, said Rajesh Balkrishnan, PhD, director of the Cancer Control Core at the University of Virginia Cancer Center.

The CMS Oncology Care Model is one payment model for clinicians to enter into an arrangement that is more than just treatment, but also patient navigation and care coordination. Another reimbursement model from the American Society of Clinical Oncology (ASCO) uses ASCO’s value framework to improve quality and affordability of cancer care, Balkrishnan explained.

In addition, there is a move to use electronic medical records to track patients and see how much benefit they get out of the drugs they are taking, he said.

“We are in, sort of, a desperate situation in oncology,” he Balkrishnan said frankly, with new oncology treatments that haven’t always been through full head-to-head clinical trials coming onto the market. “Looking back, many of these are only improving survival by 3 to 6 months,” he said.

As a result, ASCO is trying to move away from viewing the benefits of drugs through just survival and looking at other factors that determine the value of a treatment, such as treatment adherence, patient-reported outcomes, and management of side effects.

Michael Weinstein, MD, vice chair of the Digestive Health Physicians Association, and president and CEO of Capital Digestive Care, shared his experience with bringing 2 payment models before HHS’ Physician-Focused Payment Model Technical Advisory Committee to see if they would be accepted as alternative payment models.

One model, SonarMD, was a model for the management of chronic disease in patients with inflammatory bowel disease (IBD).

“For [IBD] patients admitted to the hospital or emergency room, a major common factor was that none of those patients had seen a physician in 90 days before going to the hospital,” Weinstein explained. “Sonar is a specialty medical home; it puts IBD patients under the auspices of a gastroenterologist to be their primary care physician.”

That gastroenterologist would oversee all of the patient’s care and take on 2-sided risk in the payment model with a small per member per month fee to manage the technology needed to engage these patients.

The reason the payment model was called “Sonar” is because it was similar to using sonar tracking on the ocean, only this model was allowing doctors to see what went on under the surface that caused patients to land in the hospital or the emergency room.

“You see the patients you see in your office, but you have no idea what is going on with the rest of your patients in the community outside of the office,” Weinstein said.

The other analogy for SonarMD is that it could be used to ping patients on a basis using smartphone technology to see if they are declining and get them into the office and back under control before they end up in the emergency room.

In Illinois, the creator of SonarMD saw savings of $6000 per patient during the first year, Weinstein explained. Unfortunately, the model wasn’t approved. Just days before former HHS Secretary Tom Price, MD, stepped down, he said he wasn’t in favor of it because he felt there was a proprietary technology component—something Weinstein disagreed with.

From an overall policy perspective, as well as a take on how value-based models are doing in general in primary care, Dennis Scanlon, PhD, of Pennsylvania State University, explained that looking at the evidence, it’s not clear whether new payment models are working to reduce costs and lead to better outcomes.

“From my perspective, I think a lot of these models are still up in the air of whether or not they’ve worked,” Scanlon said.

However, a lot of the payment models have been moderate and the problem might be that the costs associated with practices, physicians, and organizations to change is too much to justify the small amount of savings they get to keep.

At the end of the day, many believe that in order for the incentives to be meaningful, organizations have to assume more risk. Many of the current programs haven’t had downside risk yet, they’ve only focused on upside risk at this point.

“There is an assumption … this is the way the world will move,” Scanlon said. But while there is good reason to believe that, he has talked to plenty of organizations that are staying stagnant. With fee-for-service still available in their marketplace, these organizations are asking, “Why should we move?”