The shift to Value Based Healthcare is not as simple as changing the way that healthcare providers get paid. Healthcare organizations across the spectrum are not equipped to handle a landscape where long-term quality and outcomes are the driving force behind the success or failure. The implementation of the MACRA legislature for Medicare is driving change in the private insurance world and those providers that do not embrace and adapt to the changes will find it difficult to survive.
It would seem that a large number of providers, payers, and industry experts believe that the only way for those smaller practices and organizations to survive is to band together. Many VBH payment models that have already been implemented center on the concept of coordinated care. Coordinated care relies on the concept that providers can come together to provide a comprehensive care regimen. The different providers would collaborate in order to reduce duplicate or unnecessary procedures and tests as well as ensure that a more complete picture of health is driving the treatment rather than the separate opinions of different specialists.
Accountable care organizations (ACOs) from CMS and patient-centered medical homes (PCMH) are two such examples of coordinated care models intended to drive a more collaborative and customized approach to health. There are other models out there right now, but if I mention too many others this post would start to look more like alphabet soup than I am comfortable with. More and more VBH models appear all the time and each has its distinct pros and cons. To my earlier point, this hangs some smaller providers out to dry because they simply aren’t equipped to meet the requirements of the new collaborative models.
That isn’t to say that they can’t provide high quality care or collaborate with other providers. It’s more likely a matter of the VBH world moving faster than many thought it would. Innovative and advanced payment models that rely on new health care trends like electronic health records, telemedicine, data collection, and predictive analysis are out of reach for many providers because they weren’t prepared to need them any time soon. You may be asking yourself “But Kevin couldn’t those providers just get some new technology and everything would be ok?” and to that I would say “Probably not”.
Let me paint a picture to help explain. A smaller provider wants to get into this VBH stuff and so decides to invest in updated software and a whole lot of fancy computers to help move into the new age. He can’t afford them himself so he gets some help, say from his friendly neighborhood bank. He is convinced that this new coordinated care concept is going to help him improve his margins and build a stronger business. He has even found a coordinated care group to join. All is well. Shortly after working in the coordinated care system, a series of troubling events occurs. A number of patients didn’t take their medication when they were supposed to and have become even more ill. He didn’t prescribe the meds but he performs the procedures that help treat the problem the meds were supposed to have prevented. Now he or his partners can’t force their patients to take their medicine and, in fact, have no control at all but to the payer it seems like they are falling well short of the expected cost and quality measures they are expected to adhere to. That means they don’t get paid as much as they could have. Things get better for a while but then it happens again and again and again. Now our provider friend can’t pay the friendly neighborhood bank and is left holding his hat in an office filled with fancy computers that are now nothing more than expensive door stops. His partners in the coordinated care group however, are fine because they are large enough to take a few hits and keep on moving. Unfortunately, for our friend he is out of luck and out of business.
Now that example is somewhat exaggerated but it does fall close to reality. There is a shared risk when it comes to coordinated care and as such, it may be difficult to get some providers to fall into such a model. I have noticed that a lot of smaller practices and providers have started forming “alliances” and other more local networks where they share a patient base and certain standards. That shift is likely due to other financial reasons but it may have an added benefit. This kind of networked provider group is probably going to be much more commonplace as time goes on. As the needs of VBH standards grow more and more complex it will be necessary for your local doctor’s office to no longer stand alone unless they want to get swallowed up by other larger and more corporate healthcare groups.