Current approaches to value-based payment are payer-centered. Their primary focus has been to limit or reduce spending for health insurance plans, rather than to help patients receive high-quality care at the most affordable cost. Current approaches to value-based payment assess whether the average quality of care for the health plan’s members has improved or worsened, not whether each individual patient received high-quality care. Moreover, providers can be financially penalized when they treat patients with higher-than-average needs. As a result, the actions providers must take to succeed under these payment systems can be in direct conflict with doing what is best for patients.
What is needed instead is a patient-centered approach to value-based payment, one that will solve the problems in current fee-for-service payment systems without reducing access to services or the quality of care for patients.
In a Patient-Centered Payment system:
A patient is able to receive the services that will best address their specific health problems. In order for patients to receive the highest-value care, the many gaps in the services eligible for payment under current fee-for-service systems have to be filled. For example, the biggest transformation in healthcare delivery in decades was the dramatic expansion of telehealth services during the COVID-19 pandemic. None of the current value-based payment systems had supported this. It only happened because Medicare and health insurance plans began paying fees for these services for the first time. In a patient-centered payment system, providers should be paid for delivering the types of services that patients need in the way that will work best for the patient.
Each patient is assured of receiving appropriate, evidence-based care. In a patient-centered payment system, in order to be paid for delivering a service to a patient, a healthcare provider should be required to meet an appropriate standard of quality for that specific patient:
- If a desired outcome of the service is within the control of the provider, the provider should only be paid if the outcome is achieved.
- If a desired outcome is significantly affected by factors outside the control of the provider (e.g., a patient’s ability or willingness to follow a particular course of treatment), the provider should only be paid if the services that are delivered or ordered are consistent with evidence-based clinical practice guidelines (unless there are no relevant guidelines or there are good reasons to deviate from them), and if the provider monitors the desired outcomes so services can be modified for patients who are experiencing problems. If a provider cannot control whether an outcome is achieved, attempting to hold the provider accountable for the outcome is more likely to discourage the provider from treating high-need patients than it is to improve outcomes for those patients. In general, the best way for a patient to achieve a good outcome is to receive the services that evidence indicates will be most effective.
A healthcare provider receives adequate resources to support the cost of delivering services in a high-quality, efficient manner. No business can deliver a high-quality product unless it is paid enough to cover the costs of producing that product; similarly, a healthcare provider cannot be expected to deliver the kinds of services each patient needs in a high-quality way unless the payments it receives for its services are sufficient to cover the costs of doing so. Moreover, just like any business, a healthcare provider is less likely to deliver a high-quality service if it is paid more for delivering a low-quality service. In a patient-centered payment system:
- a provider’s payment should be based on what it costs to deliver high-quality care, not based on the fees paid in the past, the amount of savings that has been produced, or an arbitrary percentage of total spending.
- a provider should be paid more for patients who need more services or services that cost more to deliver.
- the patient or payer should not have to pay more because of errors and complications that the provider could have prevented.
A patient can select a provider or team based on the quality and cost of the care they deliver. Different patients have different needs and they will require different sets of services to address those needs. No one healthcare provider or health system will be the best at delivering all of the services an individual patient may need or for treating a particular health problem for all types of patients, so if patients are forced to receive services from providers in the same health system or from a “narrow network” chosen by a health insurance plan, some patients will not receive the best care possible. There is no simple measure of “value” that can be used to rank-order providers, because quality is multi-dimensional and cannot be converted into a dollar amount that is directly comparable to costs. Consequently, in a patient-centered payment system:
- providers should define in advance how much a patient or payer will have to pay for care of a patient’s specific health problem and the standard of care or outcomes the provider commits to deliver in return for that payment;
- each patient should be able to choose which provider will deliver their care based on information about both (a) what it will cost for the provider to treat the patient’s health problem and (b) the outcomes and approach to care delivery that are most important to the patient.