How value-based purchasing can lead to affordable healthcare

This article was written by Klaus Koenigshausen, CEO of MediQuire, a predictive data analytics company that helps accelerate the transition to value-based healthcare in the Medicaid and Medicare populations.

The Affordable Care Act (ACA), more popularly known as Obamacare, was signed into law in 2010 and enacted a number of healthcare reforms. Though public health exchanges are often the most talked about, the 10,000+ page document has many sections and stipulations, some of which have been strongly challenged by critics of the law. Regardless of the substance of these challenges, one thing the Obama administration and its critics can agree with is the need to continue to reduce healthcare costs and increase quality through what has been called "value-based purchasing." As value-based purchasing is likely here to stay under the new administration, this article will explain what that means to you, the patient and consumer, and how it can impact which health insurance plan you select.

From fee-for-service to value-based purchasing
Value-based purchasing has three components, what I call the triple aim: customer satisfaction, quality measures, and the reduction of avoidable utilization. As opposed to other reimbursement models such as fee-for-service, in which the quality of care is unbundled from the quantity of care (thus encouraging physicians to order more tests), value-based purchasing renders quality a determining factor in provider compensation. Indeed, across the United States in both commercial insurance as well as Medicaid and Medicare, value-based purchasing has become the strong choice for determining how healthcare practitioners are compensated.

The triple aim applied to you
Value-based purchasing is intended to change the relationship consumers have with their healthcare providers by ensuring that the patient's needs lie at the center of healthcare delivery. Thus, physicians, hospitals, and community centers must understand and work toward what is valuable to their patients. There are a number of ways this new orientation can already be visualized:

Consumer satisfaction surveys
Surveys have now become an unavoidable part of healthcare delivery. Often taken at a hospital or through phone calls, questions include "How often did physicians treat you with respect?" or "Were the facilities kept clean?" Amongst healthcare professionals, these surveys are often referred to as HCAHPS (the Hospital Consumer Assessment of Healthcare Providers and Systems). High-performing hospitals and centers can receive a bonus for high HCAHPS scores, whereas low-performing centers receive a deduction. In this way, consumer satisfaction has become one of the key metrics for determining compensation of hospitals.

Consumer tip: Next time you have to get a procedure done at a hospital, check out the consumer satisfaction scores on CMS Hospital Compare website.

Quality measures and preventative care
There are a number of ways the ACA has sought to improve quality measures and preventative care. The CDC has warned that seven out of 10 deaths among Americans each year are from chronic diseases, many of which are preventable. By focusing on preventing disease before they occur by carefully monitoring patients, this could greatly improve productivity and longevity while also reducing healthcare costs. Physicians, hospitals, and health plans have to report on a range of quality measures including whether children receive the right amount of annual wellness visits, whether children's immunizations are up to date, or whether adults have received cancer screenings or counseling for common chronic conditions.

The goal of all this measurement is to improve the quality of care patients receive and reduce variation in the quality of care provided amongst healthcare providers. High performers normally receive a bonus payment from their health plan, whereas low performers get a penalty. To ensure high quality, many hospitals and practices are relying on technology, like that provided by MediQuire, to analyze data collected in electronic patient records on conditions such as heart disease or depression in order to identify areas where the provider can improve their care for you.

Consumer tip: Before selecting a new health plan, check out whether the provider network of your health plan is providing the best quality possible by visiting the website of the National Committee for Quality Assurance.

Avoidable medical cost
The final part of the triple aim is "avoidable cost." Medical bills have been cited as the number one cause of personal bankruptcies in the U.S. and rapidly growing healthcare costs could one day reduce employment and investment in the economy as it surged to 17.5 percent GDP in 2015. The way many insurance companies are now incentivizing providers and hospital to reduce avoidable medical costs is to give them a share of the savings if they are able to better control costs across their patient population.

While most patients are not aware of the details of these types of payment arrangements, patients should not be concerned that their doctors will skip necessary tests and procedures to safe costs. A doctor's medical oath, the quality measures discussed above, and high risk of malpractice ensure patients will always receive the optimal care. Nevertheless, given high deductibles and co-pay, patients should also be interested in how much the cost of their procedures varies from provider to provider purely based on higher prices charged by a provider.

Consumer tip: Most health plans have their own cost comparison tool available to members and PolicyGenius helps consumers take the jargon out of selecting a health plan in the first place, providing a ranking order based on what you feel is important.

The divide between goals and reality
The triple aim discussed thus far is an opportunity to continue to improve healthcare access, equity, affordability, and quality, which can only help you as a patient during a regular checkup or in the context of a more serious illness. However, the attempts to reach the triple aim have been a burden to physicians, many of whom complain about greater administrative responsibilities and less time to visit the patients and consumers they would like to help.

In the gulf between what physicians must do to make sure they comply with ACA guidelines and what they would like to know about you lie companies like MediQuire, which can serve to reduce the burden experienced by physicians while also using advanced analytics to predict how physicians can best serve you. For example, MediQuire enables healthcare providers to systematically incorporate many aspects of your clinical profile and social determinants of health into their care plans automatically in order to customize medical interventions or even other non-traditional care options.

So next time you are purchasing health insurance and selecting a healthcare provider, check out PolicyGenius, the quality scores of your desired health plan, provider, and hospital, and have empathy with your doctor who is trying to juggle the triple aim.

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