NaviNet on November 14, 2014

Turning a Value-Based Reimbursement Skeptic into a Believer

Author: Catherine Weston, Strategic Advisor, NaviNet, Inc.

If you’re a healthcare veteran like me, watching the rise in value-based reimbursement (VBR) has been a bemusing activity. We veterans all experienced the rise of managed care in the 1980s and its fall in the 1990s. We saw health maintenance organizations (HMOs), telemedicine, hospitalists, electronic medical record (EMR) and clinical decision support systems, and many other innovations come in with huge expectations for transforming an industry that was just getting bigger and more unwieldy every year. Of course, industry transformation remained elusive.

Turning a Value-Based Reimbursement Skeptic into a BelieverSo when the first accountable care organization (ACO) contracts were signed and NaviNet’s customers began developing patient-centered medical home (PCMH) programs, there was a bit of “Here we go again” thinking going on in my head. Our circle of physician friends was equally skeptical.

Yet this movement was finally tackling one of the key root causes of the problem—the fee-for-service model that fails to motivate the right behaviors within the system. So it was worth watching. And the trend grew. Suddenly, trade organizations, consultants, and media outlets (and my inbox) were all full of the latest news on some aspect of the VBR movement. Then when NaviNet decided it needed a broad-based research study on the current state of the VBR trend, I thought it was a great opportunity to weigh the facts.

The goal of the research was interesting, too. It was to cut through the barrage of industry communications, find the voices and thought leaders who had something interesting and substantive to say, and curate what was found into a synthesized set of key trends.

I wasn’t sure what I was going to find, but I suspected the following:​

  • One possibility could be that this was all still hype, smoke, and mirrors.
  • Another could be that the trend is real, but not delivering good results, so there could be a real possibility of the trend collapsing soon.
  • And at the other end of the spectrum, this could be a trend with real results and real potential for industry change. When you read my recent white paper, Five Trends in Value-Based Reimbursements, you’ll see I came to this more positive conclusion, but I have to admit, I took some real convincing.

So what was it that tipped the balance? Part of it was sheer volume: Over the course of four weeks, I reviewed over 500 blog posts, white papers, press releases, conference agendas, media articles, and website content pieces, all directly related to some aspect of value-based reimbursement. But most of it related to what I found within that content stream revealing Five Key Trends in VBR:

  1. The impressive level of investment by the national payers and the larger Blues and regional health plans, with public goals of reaching one million members under VBR or getting a pay-for-value program implemented across the entire primary care network.
  2. The depth of thought shown by the consultant and analyst community, such as McKinsey & Company, Michael Porter, and the Advisory Board, among others. These organizations generally don’t waste their time on passing fads.
  3. The surprisingly large size of the early adopter wave among providers, especially among physician leadership in large-group practices.
  4. The degree of Federal government leadership, both in payment model programs and in technology infrastructure support for better interoperability.
  5. The promising early results in cost reduction and patient care improvement, sufficient to keep moving ahead.

The final factor for me was that the industry really is approaching VBR not as a silver-bullet, one-time implementation, but as a long-term continuous-improvement agenda that is anchored in the right place—the simultaneous goals of the Triple Aim. If payer and provider leadership sticks to that philosophical approach and keeps pushing even when all the early wins are taken, it seems there might be a real possibility of fundamental industry transformation.

Turning a Value-Based Reimbursement Skeptic into a Believer

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