Exploring Healthcare Payment Alternative: Value-Based Purchasing
After discussing the drastic transition into universal healthcare, we need to investigate less severe changes that can be implemented. Robert Longyear, director of product management at digital health technology company Montuno Software, was the perfect person to consult with regarding this matter. His work is focused on population health management and the development of technology-enhanced healthcare payment and delivery systems.
When asked about his take on reforming the healthcare system, he intriguingly proposed, “We need to move toward value-based purchasing, which is the idea that instead of paying physicians for the care they provide, we pay them for keeping patients out of the system. We need to put an incentive in place. Until we change the way we pay for healthcare and create financial incentives, it won’t change for the better.”
The idea of a value-based purchasing model also arose during my interview with Jesse Scharff. That both Longyear and Scharff work in healthcare development and growth suggests that this payment model is prominently discussed in health innovation and may serve as a very real possibility for our future.
To revisit Longyear’s earlier quote, his ideas are noteworthy: medical providers need different financial incentives for keeping patients out of the hospital, rather than keeping them in. Since many medical providers’ professions rely on treating sick patients, one potential solution is to provide financial incentives that encourage providers to keep their patients healthy. If we do not reverse the current emphasis on healthcare, then our system just becomes a never-ending cycle of admittance and discharge, which is where we will end up if something does not change soon.
The system Longyear suggests is called value-based purchasing (VBP), otherwise known as pay-for-performance (P4P) system, which is an alternative payment model.
This program was introduced by the Centers for Medicare and Medicaid Services (CMS) in an attempt to “reward acute-care hospitals with incentive payments for the quality care provided.” The hospital performance is determined by different quality domains: mortality and complications, healthcare-associated infections, patient safety, patient experience, process, and efficiency and cost reduction. Hospitals that perform well in these domains are incentivized with a “2 percent positive Medicare reimbursement adjustment for inpatient services.”
Rather than just treating the patient for the diagnoses or illnesses they initially entered with, P4P systems also emphasize working on keeping patients out of the hospital by ensuring better quality care. This reimbursement system will shift medical providers’ mentalities to focus on appreciating and understanding the patient in a more holistic way.
While many possible alternatives are out there, too few are being actively explored in a realistic setting. This chapter hopes to challenge this notion by demonstrating how beneficial these alternative payment models could be to our health system. Although a perfect system is not achievable by any means, that fact should not stop us from challenging ourselves to work toward achieving better care for ourselves.
To create a sustainable healthcare system that proactively works to keep people healthy and medical providers focused on an altruistic approach to medicine, patient consumers need to reassess if a fee-for-service system will satisfy those goals.
Healthcare has transitioned into a state of excessive documentation for reimbursement, which is not healthy or sustainable for the future; therefore, it is essential that we look toward changing this type of care approach.
Healthcare was an idea that started as protection and a safeguard for patients, and it should revert back to the way it was. Maybe not all the way back to the practice of trepanning and drilling holes into people’s skulls but at least back to before this extreme complexity.
This transition may be possible through the implementation of one alternative system, an adoption of a mixture of them, or the revitalization of our current one. While the trajectory of healthcare’s future remains uncertain and up for debate, one thing is clear: we as a collective can help advance this transition into proactive, better quality care by becoming empowered managers of our own care.
Series 1 Article 5
Enjoyed this article? Over the next weeks, I’m going to be sharing excerpts from my book in this article series. The Healthcare Conversation: Navigating the U.S. Health System is available now on Amazon in both paperback and ebook format. If you want to read more stories like this, please check it out and let me know what you think! To connect, you can reach me here via email at linhdoanvo@gmail.com or on social media at linhnout on Instagram.
