Another Look at the Value Proposition
Unless you have been imitating Rip Van Winkle these past dozen years, you know we are in one of our periodic cycles of worrying about the cost of health care. The notion has arisen that the traditional fee-for-service model for payment drives unneeded and potentially harmful care. The “value proposition” seeks to change payment from volume to “value.” Granted the latter is difficult to define, but we are in the midst of an enormous experiment designed to move away from fee for service payments. Mendelson and associates have published a systematic review of the impact of pay-for-performance (P4P) programs worthy of further attention.
They analyzed 69 studies, of which 58 were in ambulatory settings, with many in the United Kingdom. They found “low-strength” evidence pay-for-performance systems may improve processes of care in the intermediate term—2 to 3 years—but the effect was strongest where performance was lowest to begin with and the effect seemed more pronounced in the UK, where the incentives are larger than those typically seen in the U. S. There were few data on long term health outcomes, and there was no effect seen in hospital based studies except for reducing readmissions.
Of course, the fact that these studies don’t show much effect won’t stop the drive by CMS and others to institute these sorts of programs, which they think will save money, but it is useful as physicians to stop and think about things we might do to make the process more useful to our patients. First, of course, we have to acknowledge most P4P programs use process of care measures which seem reasonable, such as target BP goals or target A1c goals. The problem, though, is there is not a tight correlation between achieving these goals and either improved health or cost-savings—certainly not over a short enough time frame to be of interest to commercial insurance plans. Let’s take the blood pressure goals. I think we all agree that severe hypertension, say 240/140, leads to a high risk of stroke, heart failure and renal failure, and that treating to say 140/90 reduces those risks. The problem is that the benefit, even in this extreme example, does not show up for several years. Then we have the problem of the patient with more modest elevations of blood pressure, particularly systolic, and whether age has any relevance to treatment goals. A new guideline just released by the American College of Physicians suggests 150/90 might need to be treated in patients over 60—at the same time the insurance plans are giving demerits for not getting to 140/90.
As I have suggested before, rather than setting a blanket goal and aiming for 100% attainment, we would be more effective in terms of good patient care, if we defined the goal as no one with office blood pressures greater than some number, say 180/100, (I made that up), and a goal of 80% of the population at 140/90 or below. This would have the effect of focusing attention on the outliers, who are likely to have the most benefit in terms of improved health and also allow for individualization of care, while not abandoning the goal for most patients. The studies reviewed by Mendelson and colleagues suggest most of the improvement occurred in the outliers, anyway.
McWilliams and Schwartz recently reviewed the notion that focusing on high-cost patients, the outliers, may be the key to saving money. They suggest focusing on specific patients may not offer a solution for three reasons.
“First, targeting high cost patients may not effectively target the spending that should be reduced. Longitudinal patient-specific investments that are important for coordinating care and improving quality may be less important for curbing wasteful spending. And potentially more effective system changes that reduce wasteful care for all patients have different cost structures that may not require patient targeting to maximize savings.”
They also note that predicting who is going to be high cost, as opposed to who has been high cost, is not easy. They then point out that if you save some money by reducing wasteful care for the whole population, you save a larger sum than if you save a greater amount in a fraction of the whole, a simple mathematical proposition. Back in the 1990’s I noted that if our group had reduced the number of CBC’s per admission to the hospital by one we would have saved an estimated $7 million, which would cover the care for a lot of outliers—and we probably wouldn’t have negatively impacted care. Of course, we would have to achieve the goal by getting physicians to ask themselves: “Do I really need this lab today?” You certainly could not justify simply limiting the number of CBC’s the lab could run in a day. (This was done at a VA I was working in as an intern.) Who would prioritize which patient’s need was greatest?
The authors note ACOs that are historically more efficient do so by influencing the entire distribution of spending, not just shortening its tail. There is a $1,427 per-patient spread between the most and least efficient organizations before they became ACOs, but in both groups, 19% of patients accounted for 75% of the spending in both—a real life example of the 80/20 rule. If the goal is saving money, then, the challenge is to make reducing “waste” part of the organizational culture.
Perhaps this is the real bottom line from these two articles. If the goal is saving money while improving care, the value proposition, neither P4P nor “case management” is likely to work unless or until cultural changes occur. To the frustration of the policy planners, it turns out that so far, at least, changing payment schemes has not changed culture in any ways that have produced the desired changes in either dollars or health benefits. Maybe we have to go back basics and recognize the key is to get bedside and chairside clinicians involved in the decision-making process. Certainly blind following of the check boxes has not worked.
30 March 2017
 Mendelson A, Konda K, Damberg C, et al. The Effects of Pay-for-Performance Programs on Health, Health Care Use, and Processes of Care: A Systematic Review. Ann Intern Med 2017(Mar 7);166:341-353. doi. 10.7326/M16-1881.
 McWilliams JM, Schwartz AL. Focusing on High-Cost Patients—The Key to Addressing High Costs? N Engl J Med 2107(Mar 3);376:807-809. doi.10.1056/NEJMp1612779.
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