Guest Commentary: Continue the pursuit of value in healthcare
While the future of the Affordable Care Act is still uncertain, a number of initiatives that began under the law have shown the kinds of results that transcend politics and will keep the focus on value over volume.
Yes, we have seen that there are barriers to transitioning to a value-based approach, such as interoperability and organizational culture change, but there are also potentially huge gains to be made by including social determinants of health, for example. And we know U.S. healthcare provider organizations still receive the majority of their revenue from fee-for-service contracts. However, for these organizations to thrive under any circumstances, a focus on the quality of outcomes, efficiency of care delivery and reduction in cost should remain imperative.
And it's not only healthcare providers that are shifting from fee-for-service. The National Business Group on Health released a survey in August showing that nearly 40% of employers surveyed "have incorporated some type of value-based benefit design" into their workers' health plans for 2018.
So what do successful value-based approaches look like? The CMS has broad authority to test new payment and delivery models. Through the agency's Center for Medicare and Medicaid Innovation, initiatives such as the Bundled Payments for Care Improvement and several generations of accountable care initiatives, have been rolled out, refined and expanded (and in the case of bundles, scaled back—more on that below). A shift to value has also seemed to spur a laser focus on hospital readmissions, infection control and hospital-acquired conditions by penalizing hospitals with above-average rates.
While few hospitals would say that realigning their administrative and clinical models to comply with these mandates was easy, those that have been tracking the impact of these reforms are starting to see some benefits.
For example, in the IBM Watson Health 100 Top Hospitals study (formerly known as the Truven Health 100 Top Hospitals study), we found that as the U.S. hospital industry is adapting to federal value-based payment requirements, the leading hospitals, as a cohort, have become more balanced across key performance domains for organizationwide strength. Our study found that double-digit percentages of hospitals are leading significant improvement across performance domains: clinical, financial, efficiency and the customer perception of care.
The CMS recently proposed canceling cardiac bundles and scaling back the Comprehensive Care for Joint Replacement bundles. However, bundled payments are a specific example of the impact of value-based approaches, and payers are not likely to ignore that impact. A 2017 JAMA Internal Medicine study of 3,942 patients who received joint replacement surgery found a decrease of $5,577 (20.8%) in total spending per episode. In our own work with a multihospital system in the South, we found a 22% reduction in post-acute-care spending for bundled joint replacement by aligning care with best practices and consistently benchmarking against peer group hospitals.
We observed similar trends in the analysis of readmission rates. According to the results of the IBM Watson Health 50 Top Cardiovascular Hospitals Study, 30-day readmission rates for acute myocardial infarction improved in 51% of hospitals nationwide between 2011 and 2015. For heart failure readmissions over the same period, 39.5% of U.S. cardiac hospitals showed significant improvement. Those stats are attributable to the unwavering focus hospitals have put on reducing readmission rates over the past six years.
When it comes to hospital-acquired conditions, another focal point of value-based care, estimates from the Agency for Healthcare Research and Quality show a sustained 17% decline in hospital-acquired conditions since 2010. AHRQ research estimates that nearly 87,000 fewer patients died and $19.8 billion in healthcare costs were saved because of reduced HACs between 2010 and 2014.
These results and reams of anecdotal examples to support them throughout the U.S. healthcare system make it clear that the broad tenets of value-based care have now acquired enough momentum to stand alone. Regardless of politics or other barriers to change, we believe a continued focus on improvement in both economics and outcomes is necessary for patients, providers, payers and employers to thrive.
Mike Boswood is general manager of value-based care for IBM Watson Health and president and CEO of Truven Health Analytics, an IBM company.
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.