Do Value Based Payment Models Really Work?

By | April 29, 2022

For those in the value-based payment (VBP) world, we are constantly asking the question; “Is what we are doing impactful and adding value to quality, service, and costs, to those we serve?”

A recent study in Health Affairs analyzed 20 years of commercial VBP studies and found mixed results. And from this information, it’s possible to formulate a few hypotheses.

For instance, are the models set up correctly to be able to significantly impact change? As with any hypothesis, it’s essential to take a scientific approach. What is the problem we are trying to solve, what is the intervention, and did that intervention make an impact? Suppose we did not observe a positive result. In that case, it’s essential first, to step back and identify whether we implemented the model correctly, before deciding whether the model met our pre-identified specifics. Too often, we proclaim a model did not work when the implementation was in fact, flawed. In determining why, the model failed, it’s a pertinent to question whether we provided the necessary support to clinicians and members. Merely sharing data isn’t enough. Furthermore, it’s crucial to aid the clinician on the operational side and the consumer from the standpoint of navigation.

Have we oversimplified the complexity of the situation? As we think about the value chain, there are numerous stakeholders: the employer, the clinician, the payor, and the member/individual/consumer. Unless the model condors all that might be impacted, it will assuredly be less successful. For example, benefit and network design will always play a role alongside VBP models. Moreover, we tend to forget to bring the consumer into the value chain. How many of our models promise the employees lower premiums, thus more take-home pay? From a macroeconomics perspective, they all do; however, I would venture to guess very few employees can connect those dots in a meaningful way that would impact their behaviors. Presently, there are still numerous hands in the pot of VBP models, which also dilutes outcomes.

Furthermore, our thinking is often too narrow in scope. If we truly wish to decrease the cost of care and improve affordability to the end-user, it’s crucial to consider ways to eliminate large chunks of consumer costs. This situation is where Do It Yourself (DIY) models should rise. Sure, Lowes and Home Depot sell to construction companies and repair service providers, but they also focus on the DIYers. They have classes for them and their children, and the commercials are geared towards this model, as they realize there are savings to be had for the consumer. In healthcare, we tend to avoid this area of focus. Is it because we believe the quality will suffer? We can work through that. Is it because I am part of the value chain that will be dis-intermediated? Quite possibly.

Let’s continue to view ourselves on an ongoing journey to understand the values of value-based care and value-based payment models. Let us continue to learn, adapt, pivot, and question our underlying premises. The evolution of our thinking and versioning of our models will also need to continue. We owe it to ourselves and those we are blessed to serve.