Contributors: Lauren Cricchi and Roy Beveridge, MD
To learn more about Lauren and Roy, click here.
It is hard to avoid news and opinion articles about value-based care in 2022. Between the seismic growth in Medicare Advantage (MA), the adversarial launch — and then relaunch — of the Direct Contracting (now ACO REACH) model through the CMS Innovation Center (CMMI), and the meteoric rise in private equity-backed primary care models, the attention on new and innovative payment and delivery models has never been higher.
Within this hot button conversation about value-based care (VBC), there are many voices, each bringing a unique perspective:
- Private equity and other investors see this as an ever-growing, white space for investment.
- Health plans see VBC as both an opportunity to curb costs and potentially increase margins by being more efficient with care, and as a growth strategy, as MA continues to grow towards at least half of the Medicare population.
- Patients are often wholly unaware of value-based models — but through experience may see them as a way to access benefits they didn’t have before, like transportation and food.
- “Providers,” which includes health systems, physician practices, etc., seem to be either enthusiastic evangelists of VBC or fighting valiantly against it being imposed upon them.
This, however, leaves out a key stakeholder in the discussion: the doctors themselves.
Though studies, articles, and podcasts abound discussing the importance of “providers” taking on financial risk in order to really make the transition to value-based care work, there is a level of granularity missing in current public discourse. To accomplish this, the term “provider” must not only be differentiated between hospital-based health systems, physician groups, facilities, and clinicians, but segmented amongst clinicians by specialty as well. Even where “specialists” and “primary care” physicians are differentiated, there is still a level of distinction missing within the world of value-based care to truly understand the individual physician experience.
Providers are not a monolith.
While results from the Healthcare Payment Learning and Action Network indicate 80% of the covered U.S. population and 41% of U.S. healthcare payments in 2020 flowed through alternative payment models, the provider-level data tells a different story. A recent 2022 article in JAMA found more than 80% of primary care physicians and 90% of physician specialists are still individually compensated based on volume.
As Harrill and Melon explain in their 2021 field guide to U.S. healthcare reform, “For [the patient-physician] relationship to yield greater measurable clinical value, the physician will need to play an increased role coordinating the development of value-based models.” But just as doctors are not a monolith in their clinical training, they are not a monolith in how they view or interact with VBC.
The U.S. healthcare system is singular across a number of unflattering domains, and its provider population is one of them; in 2018, 88% of practicing physicians in the U.S. were specialists. Specialists in Canada, by comparison, make up just over half of the clinician workforce. This inverted pyramid highlights not only the immediate need to publicly incentivize the practice of preventive medicine through primary care, but the vast population of “specialists” that must be examined more closely.
In the following sections, we will outline the nuanced perspectives and experiences of 3 different types of providers:
- The primary care clinician
- The chronic care specialist
- The general surgeon or procedural specialist
While this grouping may still not represent a complete picture of the physician experience and some providers may not perfectly fit into each description, it’s a start. The hope is this article adds a level of distinction and nuance to the overall dialogue on value-based care so we can bring all types of clinicians with us and continue to foster innovation in VBC that addresses the experience of all doctors.
The Primary Care Clinician
The primary care clinician is at the center of almost every discussion of value-based care. Often described as the “quarterback” of the patient’s care, the primary care clinician — which generally includes primary care providers (PCPs) - internists, family medicine practitioners, gerontologists, and sometimes pediatricians — holds the keys to the population-based, coordinated care delivery model.
There is significant momentum and investment in value-based primary care, including within federal programs (e.g., CMMI’s Primary Care First Initiative) and self-funded employers (e.g., Morgan Health’s $50 million investment in Vera Whole Health).
It is also the most flexible specialty in which to test different payment mechanisms based on various levels of financial risk, and the innovation and risk associated with the chosen payment methodology drive corresponding innovation in the care delivery model. These can include interventions to improve non-clinical drivers of health outcomes (“social determinants of health”), tech-enabled care coordination modalities, and more personal relationships with patients.
Not only are value-based arrangements more feasible in primary care — they work better. A recent study of primary care organizations participating in value-based payment models with an MA plan demonstrated a significant decrease in the use of acute care amongst groups taking on two-sided risk in comparison to fee-for-service (FFS) arrangements. But while primary care is the obvious home for many VBC-focused initiatives, the individual physicians may have differing experiences based on the culture and reimbursement mechanisms within their organizations, or if they’re part of a larger risk-bearing entity in the first place.
As interest in risk-based arrangements in primary care continues to grow and clinicians are expected to shift towards more preventive, coordinated care, they must be at the table to ensure this paradigm shift is feasible and realistic. Plus, VBC models driven by physicians almost unanimously demonstrated superior results: in particular in the MSSP program, physician-led Accountable Care Organizations (ACOs) performed 7 times better than those led by hospitals in 2018.
The Chronic Care Specialist
While much emphasis in the value-based care movement has been placed on the PCP, a critical component in the effort to decrease costs while maintaining quality is the chronic disease specialist. Evidence indicates specialty care for patients with complex, chronic medical conditions accounts for over $930 billion in annual U.S. healthcare spending, not including specialty drug costs. And while the PCP is critical in sustaining “well-care” with a focus on prevention and care coordination, this level of care is not sufficient for the almost two-thirds of the U.S. population who are already living with at least one chronic disease such as diabetes or inflammatory bowel disease.
Specialists like gastroenterologists, oncologists, and cardiologists may see their chronically ill patients more than the PCP; in fact, in many cases, these patients may consider their specialist to be their primary care clinician. However, without the appropriate level of accountability and corresponding incentive structure, these clinicians will remain singularly focused on the aspect of the patient’s care they are trained to treat. They will consider the patient’s needs while they are sitting in front of them, to keep them from getting — as is termed in the industry — “sick sick.” As a result, these clinicians who provide critically important care to the chronically ill may only have a limited impact on their patients’ overall well-being.
The small fraction of specialists who are currently participating in value-based arrangements is in part due to the challenges associated with creating appropriate incentives, measures, and benchmarks for specialty care that can often be highly variable, in addition to volume limitations and aversion to financial risk. However, despite these challenges, there are successful models of value-based specialty care. For example, nephrologists participating in existing value-based kidney care models are not only compensated to provide “sick care” to patients with ESRD but are increasingly incented to focus on the prevention or delayed onset of kidney failure, leading to better management of patients’ chronic symptoms, reduced need for dialysis, and overall enhanced quality of life.
If specialists are compensated based on the health of their population, they are no longer singularly focused on the “sick sick” patients in their waiting room, but also on the patients who aren’t there — and should be.
The Procedural Specialist or Surgeon
Surgeons and other procedural specialists are a class of the “specialty clinician” that should also be considered independently. They are a unique breed, having been trained to do highly-skilled, technical procedures, often over more than a decade. They are focused on outcomes, are guided by clinical recommendations, and stay up-to-date on evidence and new technology related to their field. All of this makes a procedural specialist prepared to deliver the highest quality care; however, what it lacks is a focus on cost.
It is common knowledge within the industry that surgeons have traditionally been associated with high-dollar procedures for health systems and are compensated and incentivized accordingly. For example, in an FFS system, cardiovascular interventionists and orthopedic surgeons generate significant revenue for each surgery they complete, and therefore, for a hospital or ASC that employs them. Recent data modeling the impact of COVID-19 on hospitals supports this notion, finding over 78% of inpatient revenue came from elective surgeries, a third of which are musculoskeletal, circulatory, or digestive in nature. But when elective surgeries essentially screeched to a halt during the pandemic, it became clear to some that basing reimbursement strictly on the volume of procedures — and not value — was a flawed model.
However, the same principles used to establish value-based reimbursement for other specialists aren’t as applicable here. While the chronic care specialist described above provides ongoing care to patients with chronic disease, these clinicians provide a specific, time-limited surgery or procedure and therefore may have less ongoing ability to impact patient out-comes. CMMI models like the Bundled Payments for Care Improvement Initiative and Comprehensive Care for Joint Replacement Model provide examples of episode-based payment mechanisms that can be applied to a procedural specialist, as these models include accountability for costs related to the anchor procedure, rather than the condition or overall patient well-being.
Even still, further differentiation of surgeons is needed; the “super-specialized” physicians, such as neurosurgeons, pediatric surgeons, or surgical oncologists, may have limited opportunities for meaningful value-based payment arrangements given the highly technical and acute level of care they provide. Value-based care evangelists and policymakers must recognize its limitations and targeted applicability in order to build a system which has buy-in from all physicians while continuing to practice the care they were trained to provide.
What does a value-based care system look like that incorporates the multifaceted physician perspective?
In summary, it is critical as we gain a more sophisticated vocabulary and approach to value-based care that we incorporate individual physician perspectives into the models we implement. In order for value-based medicine to work, there needs to be innovation in how it’s done. While there are leaders who are already taking this physician-focused approach to value, the broader healthcare system must buy in and recognize that not all providers will have the same perspective or experience.
Some work has been done to begin incorporating distinct approaches to paying for value-based care in the specialty care arena. For example, a recent proposal published in JAMA by members of MedPAC suggests a coordinated, hierarchical model that incorporates both primary care-led population health management and specialist-led bundles. In their proposed hierarchical ACO-episode-based blended model, the overall financial value and savings from condition- or procedure-specific bundled payments would accrue up to the overall population-based risk-bearing entity (e.g., an ACO). However, they would also trickle down to individual specialists and allow them to participate in population-health arrangements, while having their individual experience be more specific to the type of care they provide. It could also create closer collaboration among primary care clinicians, specialists, and facilities, and have a real impact on their clinical decisions and care being delivered.
This means there will be increasing opportunities for physicians to take on more risk in the future. Providers need to think critically about this shift and how they want to participate. For example, a large multi-practice orthopedic group may decide to take financial risk through quality-based incentive payments, knee replacement bundles, or through fully-capitated monthly payments for their entire musculoskeletal population; but in order to be successful in more risky arrangements, they — and the business leaders who support them — must think about the specialty-specific costs and considerations that could impact their performance, such as physical therapy fees, MRI costs, and downstream provider relationships.
Business and clinical leaders must work together to create a system based on value that works for all.
Contact Lauren at: [email protected]
Contact Roy at: [email protected]