Value Based Care Provides Neither Value Nor Care with Dr. Eric Bricker

Health care, according to today's guest Dr. Eric Bricker, is filled with euphemisms. One you hear a lot is value based care. The claim is that we need to restructure insurance plans to reward health systems that provide care focused on outcomes instead of activity. Conceptually, it makes a lot of sense that you would reward the people providing superior outcomes with better pay. Unfortunately, this scheme has been tried before and failed. It's unlikely the outcome will be any different this time around.

What is Value Based Care?

Value based care essentially is paying for outcomes. It is meant to change the process from paying for services to paying for desired health outcomes or metrics. Hospitals and physicians would then be paid based on measures of health or preventative outcomes like ER visits, complication rates, and readmissions. In theory, hospitals or physicians who do a better job of caring for the patients would get more compensation and those that don't would get penalized with poorer pay. The goal is to get more quality care for less expense. In reality, this doesn't happen.

What Really Happens with Value Based Care?

Value based care has been tried before except it was called capitation then. Essentially, systems get paid for caring for patients independent of how much or what they do. This is in contrast to fee for service where they get paid for every encounter and intervention. This cost saving approach was tried in the 90s. It failed in large part because systems adapted to maximize revenue under the new system eliminating any possibility for significant savings. Instead of providing real savings, the systems in place adapt to find other ways to achieve the same revenue stream and nothing significant changes.

Who Wins and Loses with Value Based Care?

As with any new payment scheme, there are winners and losers. With value based care (or capitation) primary care doctors are the big winners. Instead of driving so many patients into their clinics to maximize revenue, they are incentivized to keep them out since their payment is based on a per patient schedule - not how many visits they generate. In contrast, the losers in a system like this are the specialists who will not receive any payment unless they perform some service. Those services will probably dry up a bit as the capitated doctors don't want to have their patients get extra procedures or visits which would penalize them in their pay.