Why Should Health Care Transition to Value-based Care? 

female doctor speaking to a smiling female patient

The current health care system is seeing a lot of challenges. Employers and governments are struggling to pay for health care financing. Patients are disappointed with long wait times and short visits. Doctors and providers are burned out and leaving the profession. 

These challenges have sparked a lot of conversation around value-based health care. Value-based care is an alternative approach to the traditional fee for service model. A value-based approach emphasizes measuring health, promoting health, and paying for health instead of paying for individual transactions. 

Why should the health care industry consider moving from fee-for-service to a value-based care model? We pulled together three industry experts representing health care systems, providers, and insurance plan providers to share their experiences with value-based care.  

I think one of the myths about value-based care is that it’s all about reducing utilization. Really the focus is right care, right time, right place. Very often we are just as focused on things that need to be done as we are on things that are being over utilized. 

Krista Hoglun, ASA, MAAA, Chief Executive Officer, Security Health Plan

Value-based Care Can Be More Rewarding 

Adam Meyers, MD, Senior Vice President and Chief Clinical Transformation Officer, Blue Cross Blue Shield Association: 

What does the alternative look like if a transactional model isn’t what we really want; if episodic care is not what we really want? Then changing from a fee-for-service model that promotes those things to a more longitudinal relational model where outcomes matter more and where the relationship in a long-term sense is rewarded is what it’s about. 

When I was at Cleveland Clinic, I had a large swath of the organization in my reporting structure. We had primary care physicians that felt like they were just feeding the beast of specialty care and they were seeing a new patient every 15 minutes and really didn’t have a relationship with anyone. 

It’s patently unrewarding as a clinician. It’s not rewarding for patients, and the outcomes really aren’t great from that. Realizing that what gets paid for tends to occur, we chose to change our payment paradigm. We chose to move toward prospective payments. That change toward a capitated model for primary care was really essential to change the care model. 

That’s a model in which you get paid upfront per patient, per month, a negotiated amount. And what happens then is that you can change to where not every activity that you do has to be directly compensable. You don’t have to think, “am I going to get paid for this activity?” You’re already getting paid upfront, and you can focus on what you need to do that will be impactful for people. 

It enabled us to really build out the teams. We had team-based primary care where behavioral health social workers were embedded in the primary care practice. Pharmacists were embedded in the primary care practice. Periodically, the practice would stop seeing patients to review who’s not coming in to see us that we need to reach out to and how we could reach out to them proactively. 

It’s a completely different model of care focused on that relationship. What we found was it was so much more filled with joy for the clinicians. They could build relationships and actually practice medicine rather than just churn. Patients loved it because they had longer appointments, better access, and greater variation.  

The experience was much better for patients and the outcomes follow that. And, lo and behold, the spend became more appropriate as well. It was better outcomes all around. 

Value-based Care Needs to Be Patient Centered 

Jason Sansone, MD, President, Orthopedic & Spine Center of WI, SC: 

The way that I conceptualize this in my head is I’m trying to think through how to create a value-based ecosystem. Think of the patient in the middle and then this triad that surrounds them: the physician or provider, the insurance arm, and the hospital/health system. 

Each of those three stakeholders in the surrounding triad need to be able to keep the patient in the middle. It really comes down to how do you design ecosystems where truly the incentives are aligned. 

Given my science background, I always tend to make analogies. With Ohm’s Law, electricity follows the path of least resistance. So do humans. Can you remove the barriers to simply being able to follow the path of least resistance, which is value-based and aligned with the incentives of that system? 

We’ve created this overly complex system in America as far as who you need to contact and how you get things approved. We need to get to a more orderly way of going about the complexities of managing patients. When you’re designing these alternative systems, those two things need to come to the forefront.  

Really it comes down to who is going to be at the forefront and forward thinking about how to redesign all of these things. We all have things to add to that. 

Transition to Value-based Care Requires Experimentation 

Krista Hoglun, ASA, MAAA, Chief Executive Officer, Security Health Plan: 

You’ll never get it right the first time, and everybody needs to be prepared. I think it’s setting it up more like a cycle of here’s what we’re going to try, here’s how we’re going to measure it, and here’s our path for how we’re going to manage through this. Lastly, here’s how we’re going to iterate. We’re going to learn from what didn’t work, we’re going to iterate the next time, and we’re going to try the next thing.  

How health care works has changed. What was best practice five years ago is different now. The technology changes. Even if you were perfect on day one, at some point you’re not going to be right anymore because science keeps us moving forward. 

I do think that has to be embedded in the process. You have to have some kind of ongoing review of effectiveness and how you’re going to iterate going forward. 

Improving Patient Experience with Value-based Care 

Adam, Jason, and Krista joined Wisconsin School of Business’s Dan Sacks for a roundtable webinar discussion about value-based health care, their experience, the benefits, and potential challenges. If you’d like to hear more from Adam, Jason, and Krista on value-based health care you can watch the on-demand webinar.