We need to move to value! What is value?

The American health care system is continuing to move towards a focus on value.  Earlier this year, Health and Human Services (HHS) Secretary Sylvia M. Burwell recently announced a time line to move Medicare to value or as it is sometimes called bundled payments.  The goals are very specific and if achieved will create massive changes at every level of the health care system.  In the announcement Secretary Burwell explained:

“HHS has set a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018.  HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs.  This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments.”

So it is not a bad idea to ask what exactly is value in health care as was recently done at the Healthcare Leadership Council’s National Dialogue for Healthcare Innovation and reported by Neal Shah, M.D., Executive Director of Costs of Care.   With so many stakeholders in the process it is not surprising that the answer is not so clear.  Most definitions of medical value try to connect improved outcomes to cost.  For example, the working definition at the National Dialogue meeting was “Value equals quality divided by cost, preferably at the clinical condition level.“ But of course this is experienced differently depending on your position in the health care system.

The Work of Michael E. Porter, Ph.D. in the New England Journal of Medicine lays out many of the fundamental points for understanding the move to value.   Porter explains:

“Since value depends on results, not inputs, value in health care is measured by the outcomes achieved, not the volume of services delivered, and shifting focus from volume to value is a central challenge. Nor is value measured by the process of care used; process measurement and improvement are important tactics but are no substitutes for measuring outcomes and costs.”

And yet while there is little to disagree with on this level of abstraction most of our health care institutions are simply not designed to either measure outcomes in this way or to provide the kind of value based care that these different programs demand.  As Porter writes:

“The current organizational structure and information systems of health care delivery make it challenging to measure (and deliver) value. Thus, most providers fail to do so. Providers tend to measure only what they directly control in a particular intervention and what is easily measured, rather than what matters for outcomes. “

Unfortunately, at the institutional level when value based approaches and outcome based measurements are put into place without the structural changes needed to support them, the result is too often an alienated doctor work force cut off from the patients, the institutions and the doctors they aspired to be. The providers feel they are put into a position where they are bound to fail.   A culture of blame emerges when goals need to be met and there is neither the financial capital nor vision to meet them.  The easiest way to manage a work force is to blame a workforce, and doctors are increasingly just another cog in the healthcare workforce. From the providers’ prospective value ceases to be a vision for care and a means of measuring outcome, but rather a weapon used to discipline the provider and challenge their professional authority.  Blaming and de-professionalizing providers is the short cut that institutions use to avoid the real transformations that a real focus on value would demand.

The 2014 Survey of US Physicians bears this out.  As summarized in a Health Affairs Blog Post 80% of doctors do not support a change in reimbursement or economic incentives.  Furthermore, “Amongst those physicians surveyed, there is overwhelming concern that they will be held accountable for metrics whose outcome they cannot control, without receiving any credit for aspects of care that demonstrate a longer term impact on outcomes improvement, such as care coordination and patient and family education.”

A similar sentiment is expressed by the Princeton economist Uwe Reinhardt, Ph.D. when he stated in the New York Times “The idea that everyone’s professionalism and everyone’s good will has to be bought with tips is bizarre.”  Of course in practice there are rarely even tips.