Welcome to Introduction to Value-Based Care. This lecture provides an introduction to the concept of value-based care and provides a high level overview of the topics covered within this component. The objectives for this unit, Introduction to Value Based Care, are to describe in general terms, the futures of the fee for service health care system, and outline why this payment model is changing. Describe the overall value and goals of value based care from various stakeholder perspectives. Describe the recent history of the patient empowerment movement and explain why it is key in value-based care. Additional objectives for this unit include name the key pieces of legislation and rule making that creates, define, and regulate value-based care. Discuss why attention to improving quality is essential in value-based care. Discuss the types of health information technology that support value-based care. The aim of value-based care is to transform our healthcare system by providing patients and populations with care that produces health outcomes that matter to the patient in the areas of cost, quality and experience of care. In this model of care delivery, the care experience focuses on patient centered safe and appropriate levels of care to produce effective and satisfying health outcomes. To achieve the goals of value based care, new models of care delivery, new payment models and financial strategies are used to restructure how care delivery is organized, measured and reimbursed. Value means different things to different people. In a New England Journal of Medicine article titled What is Value in Healthcare, Dr. Michael Porter stated that value means health outcomes per dollar spent. One way to redefine this statement could be that, high value care produces better health outcomes for less money. And low value care results in poorer outcomes for more money. What is meant by health outcomes? Good health outcomes are generally accepted to mean low mortality and morbidity. To put it simply, people live longer and are healthier. Outcomes can also be defined as a better experience of care or satisfaction and reducing wasteful spending. In this context good value means spending the right amount of money to increase a patients longevity. While not wasting money on care that doesn't deliver positive health outcomes. Value as a term to describe health care in US means increasing value as a whole for healthcare received by everyone. Some believe that value in healthcare is getting all the care you can get no matter the cost, that kind of care is not sustainable. The goal of value-based care is to have people live longer healthier lives for a sustainable cost. The term, value-based care has taken on a set of specific meanings in the national discussion of healthcare. According to Owens and colleagues a general definition of value-based care is high value, cost-conscious care that aims to assess the benefits, harms, and cost of interventions and consequently to provide care that adds value. Specifically in the US, value based care has come to mean a set of initiatives at the federal, state, and now private insurance levels that are set up to address the problem of value in the national healthcare system. Aiming to lower the cost of healthcare, while maintaining or improving the quality of care. We will discuss this later in this course. There is a lot of evidence that points to the fact that there is a problem with healthcare value in the US Recall that value refers to outcomes per dollar spent. In the information provided by the Commonwealth Fund, dollars spent as a percentage of gross domestic product or GDP is compared across 13 countries. This chart shows that the US, represented by the red line at the top spends much more per capita on healthcare than in any other nation represented in the survey. The data also shows the result as a consistent trend, beginning in 1995 and remaining that way through 2013 further, the trend lines show that the US continues to spend more and that amount continues to increase. So proportionately, the increase in spending in the US outstrips these other nations. The other nations represented in this report are characterized as high income countries. Australia, Canada, Denmark, France, Germany, Japan, Netherlands, New Zealand, Norway, Sweden, Switzerland and the United Kingdom. Compared to other countries where people have a standard of living similar to that of the US. The US spends much more on healthcare. Looking further into this data, some of the interesting questions to ask are. Where does that spending come from? Does the spending come from individuals? Does it come from the government? Or does it come from employers in the US? Looking at this chart and comparing in the US to the 13th other countries surveyed. It is interesting to see that our public spending while our government spends per capita is the second highest in the world. For out-of-pocket cost or what individual spend on health care. The US is also the second highest in the world the other cost column which covers what insurance companies spend on healthcare is more than fives times what the cost is in Canada, which is the next highest cost country in this category. When examining this chart and adding all cost areas together, it shows that the US spends a little more than $9,000 a year per person. On average, of the remaining nations in the survey, the per capita expenditures range between $3,000 and $5,000. The US spends about three times more than what other nations spend on health care. David Blumenthal, former National Coordinator for Health Information Technology for the US, pointed out why it is important to compare the US to other nations. He said cross national comparison show that if the US healthcare system performed like systems in other western democracies, individuals would live longer lives and spend less and the United States could provide universal access to care. Blue Menthol gives the following example. If healthcare costs in the United States had increased since 1980 at the rate of healthcare costs in Switzerland, where all citizens purchase private insurance from competing plans, an estimated $15.9 trillion could've been saved. Nearly enough to retire the US national debt. By continuing to examine the question of whether US healthcare costs are delivering value, one question to explore is if three times more value for the money spent is realized. This table shows US health outcomes compared to the same 12 nations which spend less money than the US. In the first column for average life expectancy the US has an average life expectancy of 78.8 years. Those in the US are not living longer lives compared to those other countries. Another common indicator of the success of a heath care system is infant mortality, which is column two of this exhibit. Again the US has the highest infant mortality rate at 6.1 per 1000 babies born. As a final comparison look at the percentage of those age 65 and older that have two or more chronic conditions. In the US the percentage is 68%, Canada is closest to that figure with 56%. Overall, when looking at healthcare outcomes per dollar spent and comparing the US to these other nations, the results are very poor. In summary, the US is not getting better health outcomes and is spending a lot more money. Given the premise that something is wrong with the health care value in the United States, let's consider some of the causes. One element of the US health care system that is frequently sited as a culprit, is the Fee-for-Service payment model. Many of the value based care initiatives are aimed at improving, redesigning, or replacing the fee-for-service model. Fee-for-service has been the predominant health care payment model in the US. Almost all the health care providers, physicians, nurses, and hospitals in this country have operated under the model since they started delivering care. The fee-for-service payment model is very straight forward. And it works like the steps shown here. When patients get sick, they go to their physician. The physician might examine them, run some tests, diagnose what is wrong, and then either perform procedures or give them a prescription. Then the physician gets paid for each and every one of these things. In this fee for service system, every time a patient goes to the doctor for treatment it is tracked as a separate encounter from a financial and accountability perspective. Even if a patient seeks treatment for the same sore throat or asthma attack. Physicians are not required to connect each encounter to the previous one. The physician gets paid, but they are not held accountable for unnecessary or excessive care, nor are they required to speak with other providers in order to get an accurate diagnosis. In the context of health care value the fee-for-service model has some very good benefits. Fee-for-service creates an environment that encourages health care providers to work hard. When someone is paid for what she does, she has an incentive to work hard for her patients. And when we're sick we want physicians to work hard to make us healthier. Also, in the fee-for-service model, there's no incentive to withhold health care from people. In contrast, other models of payment might incentivize a physician to withhold health care, if those models aren't carefully designed. This was one of the arguments against Health Maintenance Organization or HMO's in the 1990s which will be covered more in unit seven. What are the drawbacks of the fee-for-service model? First, it can result in unnecessary test procedures or visits because the provider is paid based on activity. No matter what the provider does, he is still paid. He may even reorder a redundant test and there's no penalty for doing so under the fee for service model. Second, and more significant from the perspective of value, the payment in the fee for service model isn't linked with health outcomes. When someone sees a physician, or undergoes a series of procedures, and her health doesn't improve, the physician is still paid. Given the competing forces between keeping the fee for service system or moving to a strategy of increasing value and reducing costs many organizations, including the centers for Medicare and Medicaid services, or CMS, have jointly developed a broad set of strategies to move away from fee-for-service. This strategy is often referred to as departing from paying for volume to paying for value, where rewards are paid based on achieving health outcomes. Associated with this broad strategy of moving from volume to value, is determining what constitutes desirable performance by healthcare providers, and then paying them for those outcomes. This requires our healthcare system to incentivize the proper desired behavior. We call this broad strategy pay for performance. As the largest health insurance payer in the US, CMS has taken the lead in driving the pay for performance strategy. CMS sums up the strategy as moving away from rewarding volume in order to shape the way healthcare is delivered to patients and to improve the quality of care system wide while helping to reduce the growth of healthcare costs. The goal is to drive down the growth of costs. Which over time will result in higher value in terms of lowering health care costs, while improving or maintaining the quality of care. CMS understands that in order to change healthcare in the US they also have to work with the private sector, commercial insurers, and employers. CMS says in partnership with the private sector, the Department of Health and Human Services, or HHS, is testing and expanding new healthcare payment models. It can improve healthcare quality and reduce its cost. In talking about the strategy of value-based care, CMS also says we want to reward value and care coordination rather than volume and care duplication. There are a number of specific initiatives and models that help move us to value-based care. At the most basic level, all of them share these aspects. Providers, physicians, and hospitals are measured by a group of quality and performance metrics. For example, the pair organization or insurance company and a medical group enter into a contract. In the contract the physician agrees to be measured on a number of factors related to healthcare outcomes. These outcomes are linked to providing value. Physicians or medical groups or others that they contract with report on their performance on these factors. Based on compliance with or attainment of the identified quality and performance measures. The provider receives either more payment, as an incentive for performing to the desired outcomes. Or less payment, a penalty for not achieving those health outcomes. As a result, the provider is rewarded for how well they utilize the resources allocated to them. Health IT has a major role to play in this new modules. Using data that are already captured in structured form in the electronic health records, or EHR, will facilitate reporting means currently, the majority of data being used is collected through payment and claims records. Issues with this include the timeliness of the data and how these systems were built for payment, not documenting and tracking the care of patients. In addition, outcomes need to be both monitored and improved when found to be an satisfactory. The EHR and various visualization or analytic tools can assist with that monitoring. Finally, a variety of types of clinical decision support tools can be employed to help improve outcomes. In the next section, we'll describe the major types of value-based care programs and provide descriptions and examples to illustrate how measurement, reporting, and payment or penalty are incorporated in order to achieve value-based care. What caused this change? The greatest factor has been healthcare legislation. There are three main pieces of legislation that facilitate the move to value based care. They are known by the acronyms HITECH, ACA, and MACRA. Recall that the US spends more money that similar nations, but produces worse outcomes. This was a driving factor behind the change in healthcare legislation. One of the first key pieces of legislation to enable this movement came from the giant piece of legislation called the American Recovery and Reinvestment Act, or ARRA, implemented in 2009. Within this legislation is a section known as HITECH. The goal of the HITECH Act is to promote the meaningful use of electronic health records. Before 2009 the US lagged behind many other advanced nations in the use of electronic health records. A lot of research indicated that using electronic records could help improve the quality, Safety and efficiency of health care. So the HITECH Act put into effect an incentive program that became known as meaningful use. Under this program, physicians are incentivized to adopt and use electronic records to provide care in a meaningful and measured way. The second key piece of legislation is the Patient Protection and Affordable Care Act, known as the ACA. The goal of the ACA is to increase the quality and affordability of health insurance. Additionally, the ACA enacted regulations to allow CMS and other payers to moved to value-based care. The impact of the ACA has been dramatic. It led to the reduction in the number of uninsured Americans by 16.5 million over five years, a 35% decline in the number of people who don't have insurance. And it supported value-based care and payment models, which by 2010 also rapidly increased and now affect a large percentage of healthcare providers in the US. A final piece of legislation from 2015 is the Medicare Access and Children's Health Insurance Program Reauthorization Act, which has the acronym MACRA. MACRA directed CMS to combine a number of quality reporting programs into a single system. Previously, the various reporting schedules and requirements put an undue burden on physicians and hospitals. Finally, it gave support and direction regarding the rules initially laid out in the ACA. This included providing further details for MIPs, the Merit Based Incentive Payment System, and provided clarification of alternative payment models within MACRA. The impact of MACRA remains to be seen. Already, rapid efforts to combine the quality programs have begun and changes to alternative payment models are being implemented based on this 2015 legislation. The merit-based incentive payment system, or MIPS, is at the most basic and simple level, the pay for results programs developed by CMS. The MIPS program was created to accelerate the transition to alternative payment models, or APMs, and the details are still in development. MIPS combines these current CMS programs. Meaningful use, value-based modifier, and physician quality reporting system. Also included in MIPS are clinical practice improvement activities, which will impact how the providers are paid. Private insurance companies also have begun to incentivize quality of care. These private insurers often require the physicians within their network to implement a program where the physician reports against quality measures selected by the insurer. The physicians then either receive additional payments or may be penalized for meeting or failing to meet those quality measures. For example, a private insurance company could have a quality measurement goal that 80% of all the patients that see a physician show blood pressure readings within normal range. At the end of each year the provider reports whether this 80% goal was achieved. If the results indicate 80% or greater achievement then the private insurance company pays the physician more because of the good health of the patients they serve. However, if the result is less than 80%, the private insurance company might reduce the physician's payment. Alternative payment models, or APMs, are a second type of value-based payment model. These models marry the ideas of quality of care and cost of care. However, these models also bring further complexity to value-based payment programs. There are a number of alternative payment models including the medical homes initiative, where physicians are responsible for a population of patients in the medical home and they provide care coordination in addition to daily care. Bundled payments are plans designed to allow private insurers or Medicare and Medicaid to set the price for all the care related to a specific procedure. For example, knee replacement requires a number of different procedures and involves a hospital stay. Insurers set the price for all the care related to this medical intervention and then pay that amount of money, regardless of the actual costs of rendering that care. Capitated payments refer to paying specific amount of money per group member per month, whether or not the covered person utilizes health care services. While not new, this strategy is increasingly being used as a way to incentivize the providers to manage their costs. As you can see from the definition on the screen, an Accountable Care Organization or ACO is a group of providers that are jointly responsible for the health care spending and quality of a particular population of patients. ACOs are a result of innovations included in the Affordable Care Act. ACOs are responsible for providing high quality coordinated care to patients, while sharing care delivery and financial responsibility for a defined patient group. In 2015, there were 400 ACOs serving 7.2 million beneficiaries. The concept of an ACO is to move toward a system that pays providers based on the quality, rather than the quantity of care, provided to patients. According to the January 25th, 2015 fact sheet from CMS, in 2016, 30% of payments are planned to be issued within value-based care models, as opposed to 2011 when there were zero. Before 2011, only a tiny percentage of Medicare payments weren't straight fee-for-service. This image depicts the rapid switch in payment models. In 2016, over 85% of all Medicare payments will be linked in some way to quality performance. That 85% consists of the simple MIPs programs, and within those, 30% are ACO type organizations. What is remarkable to note, though, is that by 2018 CMS expects to increase the total programs linked to value-based care to 90% and to have 50% of those payments be made based on ACO-like payment models. Compared to the slow pace of change in medicine, this is a very rapid transformation and is heavily affecting the health care industry. In order to achieve the combination of improved quality and decreased cost, care coordination is essential, as is a population health focus, where the aim is increase value for a defined population of patients, not simply a focus on the care of the individual patient. The focus on population health includes using a variety of analytic approaches for risk assessment and management, as well as monitoring the care that is delivered. Other components address these three areas in depth. Ongoing quality improvement is another essential element in value-based care. The concerns about the quality of health care are not new. What is relatively new is tying quality more clearly to reimbursement and having requirements for meeting those specific quality metrics. In order to achieve these metrics, systems must be in place to continually monitor quality, target areas for improvement, and employ best practices for quality improvement and care management on an ongoing basis. In addition, because reimbursement is tied to outcomes, a similar process of monitoring reimbursement and managing fiscal issues, including following best practices for contracting and managing risk must be done. Later units in this component provide best practices for quality improvement, care management, and managing fiscal issues. The final supporting element for value-based care is patient engagement. High quality outcomes for the patient depend on what both the healthcare provider and the patient do. In particular, patients need to understand their role in preventative care. What choices they have when they are acutely ill, and what is needed for health maintenance. Another aspect to address within value based care includes examining how patients, as healthcare consumers, view the relationship with their healthcare providers. Providing incentives to change her patients act when practising healthcare contribute to providing value-based care. This concept is best addressed through discussion of patient engagement. For many years, a focus for patient engagement was to promote compliance with the physician's directive. However, beginning about 2010, the beliefs about patient engagement started to change. The growth of consumer medicine required a change from old systems, where the physicians were the only ones who knew how to deliver care. To a system where partnerships drive the way care is delivered. This evolution also applies to how we discuss patient engagement and empowerment. We now look to patients to partner along with the physician and the care team. In this model, patients take an active role in understanding their diagnosis, determining goals and treatment, and then actively pursuing them. And the massive changes to the United States healthcare system, introduced here, could cause one to wonder if there's any guarantee that the US can achieve high value healthcare. Defined as improved outcomes at lower costs. Fortunately, there are many examples of healthcare systems and providers delivering high value care. Let's take a closer look at three very different types of organizations, which are successfully achieving these goals, and point out some key elements they have in common. Northwest Family Physicians in Minnesota has four locations, a family practice clinic, and was named one of 11 clinics nationwide that provide higher quality at lower cost. Montefiore Health System in New York has 6 hospitals, 150 locations, and 300,000 patients in ACO contracts. And showed the greatest savings in the pioneer ACO program. SouthCentral Foundation in Alaska serves 45,000 native people across the state and provides high quality care at about two-thirds the cost of other providers. These three organizations are very different. However, they also share quite a few characteristics. They all stress the importance of primary and preventive care. For example, at Northwest Family Physicians, they state, a cold is never just a cold. Meaning they take advantage of every visit to ensure patients are caught up on preventive care, and deliver patient education. They all focus on keeping people out of the hospital, providing as many services as possible for their patients right in the clinic setting. With physicians who are cross-trained in a variety of procedures, they can provide services at costs well below what hospitals charge. They all look for ways to innovate and change, such as conducting house calls in order to help keep patients with diabetes out of the hospital. South Central Foundation developed a comprehensive system they call Nuka Care, which no longer uses the word patient, but rather the people they care for are called customer owners. They all focus on quality measures and changing to meet their quality goals. And they all have electronic health record systems. This concludes Introduction to Value-Based Care. In summary, this introduction provided an overview of the concepts, ideas and evidence that have led to the rise of the value-based care model in the US. Requirements for reducing the cost of care and achieving value through better health outcomes, is a leading cause of the change from the fee for service healthcare model toward a value based care model. This lecture reviewed the broad strategy that guides this shift in care, and examined the forces that exist to both prohibit and support the change. This lecture described certain characteristics of value-based care and provided an introduction to two specific value-based payment models, MIPS and ACOs. Also explored was some of the data that shows the rapid rise of MIPS and ACOs as alternative payment models. Federal US legislation and an emphasis on quality furthered the movement to value-based care. Patient empowerment, where patients become more and more involved in their care, further moves the US toward value-based care models. This introduction concluded with some brief examples of how value-based care models and care management have begun to evolve to positive patient experiences, healthier outcomes, and innovation and change.
