“Everybody feels that the days of fee-for-service are coming to an end,” said Dr. Ram Raju, president of the New York City Health and Hospitals Corp. “It's a great idea” to shift to value-based reimbursement, but “some are quicker to adapt” than others. Those “on the lower part of the value chain” are still struggling to reach the next level, above reporting clinical quality measures, Raju said. “We need to bring everybody together. We need one glide path.”
Even large physician groups are embracing the move to pay-for-value, in part because they believe it will improve patient outcomes. “I don't see our current system leading to better care,” said Dr. Joseph Vasile, CEO of the Greater Rochester (N.Y.) Independent Practice Association. He backs a mix of value-based reimbursement and fee-for-service. “I still see areas of medicine that lend themselves better to fee-for-service reimbursement,” Vasile said. “At some level, you're still going to have to manage providers and there still has to be some measure for payment and productivity based on how hard you work. Fee-for-service is still a good measure of productivity.”
When asked about the impact that value-based reimbursement will have on quality of care, the vast majority surveyed also believe care improves when financial incentives are better aligned with patient outcomes. Over half (53%) said the switch to value-based reimbursement will yield “somewhat” higher quality of care, while 40% said it would improve care quality “a lot.” Only 7% said quality will stay “about the same.”
“We have been doing bundled pricing on hips and knees since 2010,” said Curt Kubiak, CEO of the Orthopedic & Sports Institute of the Fox Valley, Appleton, Wis. Based on his organization's experience running an ambulatory surgery center, he believes value-based reimbursement payments will force providers to improve quality “a lot.”
“In our surgery center, we were able to control variability much better,” Kubiak said. “If someone fixes the payment on you, there isn't room for error. The quality dramatically has to improve to make that care viable.”
The group was nearly evenly split on their perceptions about the pace of change. Slightly more than half (51%) observed that the U.S. “is advancing rapidly” toward value-based reimbursement, while 49% said value-based pay is “just beginning” and “is moving slowly.”
There was a similar split among CEOs in their attitudes toward the pace of change, with 42% bemoaning that payment reform is moving “too slowly” and 49% seeing it as advancing “at the right pace.” Only 9% think government and private insurers are moving too quickly toward value-based pay.
“I have to go with what I see around me,” said Dr. David Bailey, CEO of Nemours Children's Health System in Jacksonville, Fla., where there is very little movement toward value-based reimbursement. Healthcare systems “don't have the infrastructure to evaluate risk yet. We're not there, either.”
As an example, Bailey said most healthcare providers cannot calculate the real cost of seeing a patient with lower back pain and his system can't either. “Until we know full cost, (we) can't go full bore,” he said.
“This is certainly not a slow evolution,” added Vasile of the Greater Rochester IPA. “Right now, I think we're bordering on a revolution. Any faster, and things will fall apart.”