Any Alternative is Better: Why We Should Embrace Value-Based Purchasing.

I’m a Brit by birth so I’ll confess: the American healthcare system is a bit of a head scratcher for me, especially when I compare it to the well-loved, well-trusted NHS in the UK.

But now we’re seeing the slow but hopeful emergence of alternatives in the U.S. and the best one on deck so far is value-based purchasing (e.g., pay for performance). This is why I’m excited about it.

It moves us away from incentivizing the wrong things

Let’s be frank: the traditional fee-for-service model here is absolutely perverse because it incentivizes the absolute wrong behaviors. Medical providers are rewarded for doing more. More tests, more surgeries, more interventions – the more you do, the more you can bill and the more you can make. That’s not really what most of us trained for. We got in this to help patients. And the current system does not do that: healthcare consumers in the U.S. pay roughly $980B annually with worse outcomes and access to care than its peers.

Value-based purchasing puts the reward where it should be

Value-based purchasing puts the emphasis on doing those right things — and only those right things — and rewarding healthcare providers for them. They’re looking at efficiency and quality in established issues. Can you get a patient’s blood pressure to a normal level and keep it there? Does your counseling result in smoking cessation? Can you keep a patient’s blood sugar levels under control? Those are all elements that care teams should support, and now they’re incentivized to do so. It’s not about the test or the intervention but the outcome. 

Conversely, if outcomes are poor, if you make mistakes, or if there are unwarranted cost increases, providers can be penalized. That can make some clinicians nervous as medicine is both an art and a science: you can do the right things as established by standard of care and adverse outcomes can still result. But the thinking is rightly that providers will redouble their efforts in response to more systemic accountability measures.

The new model better supports a patient-centered care team approach to medicine 

If the US healthcare model is really about sick care – treating and streeting, in and out, only when needed – it’s been enabled by its current financial model. A switch to value-based purchasing enables a better model that’s much more wellness focused. If providers are incentivized based on positive outcomes, then there’s more energy focused on preventive care, on helping our patients develop strength and flexibility, make healthy lifestyle choices in terms of food and exercise, stick to their medically necessary protocols and routines, etc. 

We can also devote more of our energy to truly integrating as a care team around the patient, implementing more regular check-ins that feel lightweight but meaningful. For a diabetes patient, it could be an email reminder of an upcoming specialist appointment, a text from the primary care doctor to check their A1C levels, or a quick video chat with a social worker What a better approach.

The door is open to experiment

These are the early days of value-based payments – and that’s exciting. It means there’s ample room for experimentation – to try this model and potentially others, to adjust and adapt based on learnings, and share our findings more broadly so others can benefit. We could be bundling payments, as some are trying, so that a consult, surgery and physical therapy come in one package for greater value. We could be learning from models that are atypical in the U.S. – both Germany and England have stellar single-payer frameworks, for instance, that reduce cost without sacrificing quality. The point is, we can take the time to learn and perhaps select the best elements to create something that works here.

As we reimagine healthcare, value-based purchasing seems very promising — but the early days of its emergence mean that we may ultimately develop new and better models that are as yet undefined. In the meantime, however, what we do know for sure is that it’s certain to be an improvement over the healthcare system we have now.

And there’s no time — or money — to waste.

About the Author: 

Dr. Rawlinson is an entrepreneurial physician executive, strategic leader, and digital healthcare product innovator. He is passionate about creating digital tools and new delivery models that reduce waste and inefficiency, improve quality, and drive improved performance and satisfaction. 

Dr. Rawlinson volunteers for The Maven Project and Rotacare Bay Area. He tweets @CMIO. He is an avid road cyclist and a big fan of Manchester City FC in the English Premier League!