Why Healthcare Organizations Struggle with Transition to Value-Based Care

Over the past 11 years, I have dedicated my professional life to companies focused on value-based care. My initial enthusiasm for value-based care (VBC) has evolved into a critical view of its fundamental challenges. This transition from paying for volume to paying for value has brought both opportunities and obstacles. In this article, I will explore why healthcare organizations often resist the move towards a value-based care model.

The Incentives and Challenges of Value-Based Care

Value-based care is presented as an innovative approach to healthcare, promising to improve patient outcomes while reducing costs. However, the shift towards this model has faced significant challenges, particularly in defining the term 'value'

The Definition of Value

The most common approach to VBC is to reward healthcare providers based on achieving good outcomes at the lowest cost. Yet, defining what constitutes 'value' remains a contentious issue. One colleague and friend humorously remarked that Accountable Care Organizations (ACOs) stand for 'Awesome Consulting Opportunity.' This highlights a potential loophole where providers may prioritize easier cases over complex ones.

Strategies to Avoid Difficult Patients

For example, oncologists might treat early-stage cancers and avoid advanced cases. Similarly, orthopedists might perform knee replacements on younger patients with a lower body mass index (BMI). Primary care physicians could create barriers for the sickest patients by positioning their offices in buildings without elevators, forcing them to seek care elsewhere. Such practices undermine the true value of medical care by prioritizing ease over patient needs.

My experience as a statistician reveals that the current attempts at 'risk adjustment' are easily manipulated. The most successful practices in VBC invest heavily in data capture to drive up their risk adjustment scores, which can lead to unfair advantages or disadvantages. Healthcare providers in the Oncology Care Model learned this lesson the hard way, realizing that one bad incentive could be replaced with another equally problematic one.

Challenges in Measuring and Compensating Quality

Another significant obstacle in VBC is the accurate measurement of quality. It is far from easy to develop measures that are resistant to manipulation. While some measures may seem straightforward, the collection of accurate and comprehensive data is financially burdensome and resource-intensive.

The reality is that even if we could agree on what constitutes 'good measures,' the cost of data collection and monitoring could escalate to billions of dollars. This financial burden alone presents a substantial barrier to the widespread adoption of VBC.

Case Study: A Successful Patient’s Journey

Two days ago, I had an interaction with a patient who had successfully managed to lose weight and exercise daily, leading to the remission of their diabetes mellitus and hypertension. Not all patients will be able to adhere to such strict regimens, and some may not respond to treatment at all. The patients who respond well may be discharged, leaving those who do not respond to the care of other providers.

This case underscores the difficulty in accurately measuring and compensating for the value provided by healthcare professionals. It is challenging to quantify the value of medical care when outcomes can be highly variable and dependent on individual patient factors.

Conclusion

The transition to value-based care is fraught with complexities and challenges. While the potential benefits are vast, the practical implementation of VBC requires addressing fundamental issues such as the definition of 'value,' the manipulation of risk adjustments, and the financial burden of accurate data collection. Healthcare organizations must navigate these challenges carefully to ensure that the shift towards value-based care truly improves the quality of care and does not become an additional layer of administrative burden.