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Volume to Value: Innovation & Resilience Required


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by Sharon Hull in Current Affairs
February 6, 2016

Have You Heard the Term “Volume to Value?”

The term “volume to value” is shorthand for a complex set of changes in payment for health care in the United States.  Over the last 5 years, since the implementation of the Affordable Care Act (ACA), US health care payment systems have changed remarkably.  In the 1960s and 1970s, we paid for health care on a largely “fee for service” basis, with little regulation of price or utilization of services.

For over two decades, beginning in the 1980s, we experimented as a nation with the idea of controlling costs by controlling utilization, and to a lesser extent, price.  Managed care organizations such as HMOs, provider networks such as PPOs and IPOs and the concept of the primary care as “gatekeeper” to specialty services were all tested as means for controlling costs.  During that time, an explosion of innovation in medical devices and prescription drugs also contributed to significant rise in the cost of medical care.

By 2010, when the ACA legislation was passed, costs were continuing to rise and we were on track to spend 1 out of every 4-5 dollars that we produced as a nation on health care.  This was seen as unsustainable, and the ACA was, in large part, an attempt to regulate those costs by changing the way we pay for health care.  The goal was to shift away from paying in a “fee for service” model, where more utilization generated more profit for health systems, and toward a “value-based” reimbursement system based on health outcomes for both individuals and populations.  So what has changed, really?

Volume to Value:  Change #1 – Health system behaviors

Large health systems are finding themselves facing a much more competitive private insurance market, with insurers insisting on the triple aim of reduced cost, improved outcomes, and better patient experience of care.  This means that the traditional means of profit-making, or revenue generation in the not-for-profit world, has been turned on its head.

Health systems are being pushed to invest in population health management, and in some cases primary care, in ways they never have before.  The most innovative systems are reaching beyond medical care and partnering with community agencies in Accountable Health Communities, CMS-funded State Innovation Models, and many other care delivery innovations that do not rely on traditional, clinic-based medical care to create value.  This forces investments in new venues, and shifts of funds away from traditionally lucrative disease-care service lines that worked well in the fee-for-service model.

Volume to Value:  Change #2 – Patient behaviors

Patients are well-informed, and are becoming ever-more-savvy consumers of health and disease care.  They are shopping for insurance because in many cases they are paying for it themselves on the exchange, or are paying a larger portion of the premium, co-pays and deductibles in employer-based health insurance models.  Fewer people are uninsured than we have seen in over 4 decades in this country.

The informed consumer is demanding access to services at times that are convenient for the consumer, rather than the care provider (consider the clinics now embedded in retail shopping and pharmacy outlets like Target and CVS, among many others).  That consumer is often the “woman of the house,” who makes health- and disease-care decisions for the entire family, and many times for the extended family.  She demands high value, rapid response, a good “bedside manner” and transparent access to her medical records.  This is creating many new innovative models of care delivery, both in the health care and the sick care environments.

Volume to Value:  Change #3 – Transparent and data-driven care

The advent of electronic medical records (EMRs) was hastened by the funds invested after the economic crash of 2007-2008, through the ARRA .  Small and medium sized medical practices were offered financial support for the up-front investment in EMR software and hardware, and standards were set for “meaningful use” of the data contained in those EMRs.

Those standards created the mechanism for driving the collection of outcomes-based data for individuals and for populations.  We are currently living through the era of figuring out what to do with all that data, and how to utilize it wisely and effectively to improve the health of our collective national population.  We are also struggling with how to reconcile the fact that population-level data does not make as much sense to individuals for whom the outcomes and the choices are very personal.

Volume to Value:  What this means for you. . .

If you are in hospital-based or specialty-based care. . .

You are likely to see shifts in the way your system invests in care; incentives to keep patients out of the hospital, and to keep from having them readmitted, are prevalent.  Accountability for outcomes that impact health is growing and the shift to lower-cost alternatives will continue to be strong.  This may contribute to stress and burnout, and skills and strategies for resilience will be critical.  See this article describing burnout rates by specialty.  It’s really becoming a critical issue.

If you are in primary care. . .

You may find that your knowledge of ambulatory medicine and your ability to help focus on disease prevention and health promotion are in high demand, but that may not yet be happening.  Until reimbursement models truly incentivize value, and outcomes, you will likely still have to meet volume-based productivity targets while increasing documentation requirements and accountability for outcomes will grow.  Again, see the article cited above describing burnout rates by specialty.

If you are a patient. . .

You may find that costs have not gone down, particularly your out of pocket costs for prescription drugs and devices and your co-payments and deductibles are likely going up.  Some of you have newfound insurance on the health insurance exchanges, while others find those plans very expensive for even the most basic coverage.  You may see your health care providers frustrated and burned out, or, if you are lucky, you are part of a care delivery team that is experimenting with innovative models of health care that meet your needs and are available in the ways you most need.  If you are part of such a practice, you are lucky, and while the innovation may at times seem chaotic, it is part of the process of change, and your providers are on the cutting edge of this transition.  Encourage them and bring them your own ideas on innovation that matters to you.

Bottom line – this transition is likely to take another 5-10 years to fully roll through, and we don’t know exactly how it will play out.  We only know we are living through change, and all of us – providers, system leaders, patients – must help each other make the best of it.  Supporting resilience among providers, understanding the shifting world of finance and its impact on patients as well as health care delivery systems, and remembering why we are in the business to begin with – taking really outstanding care of people who are ill or who wish to remain healthy – these are the strategies for success in this time of tremendous change.  Watch for my next post on “Resiliency and Self-Care:  Valentine’s Day for Yourself!”  And in the meantime, here’s a link to 10 Tips to Help You Become More Resilient, from WebMD.  

This article was republished with permission from Duke Community & Family Medicine. The article was first published online February 5, 2016. Read the original posting on the Duke CFM Blog.

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Sharon Hull, MD, ACC

President and CEO at Metta Solutions, LLC
Hi, and welcome to Metta Solutions.I am a physician and a professional executive coach .  I help people thrive by coaching them to manage change, grow their careers, develop as leaders and integrate personal and professional goals. My passion is working with self-reflective individuals and organizations to help them achieve their goals.  Subscribe to the Metta Solutions Community here.
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