Is “Value-Based Care” An Empty Promise?

By Ryan Wells

A new report on US physician compensation arrangements and financial performance incentives shows an alarming disconnect between the medical field’s enthusiastic rhetoric regarding value-based care (VBC) and its implementation. The findings show performance-based initiatives averaged less than 10% of compensation for the practices surveyed. Such stark numbers suggest VBC may be more of a buzzword than a plan for many stakeholders. 

As a quick review of the concept behind the cliche, VBC is an evidence-based healthcare delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes instead of patient volume. That logic has dominated recent professional discourse, policy proposals, and journal articles. RAND’s data, however, shows little evidence of change when it comes to VBC in practice. Asked whether volume or value constituted their primary financial incentive, over 90% of specialists and 83% of primary care physicians said volume-based compensation. 

As the founder of a company that values the patient-doctor relationship above all else, I wholeheartedly agree with the drive to place more value on patient outcomes. However, it seems the VBC champions have staked a position that is counterproductive to real progress. Sure, providers that implement current VBC models may get stage time at conferences and a vast Linkedin following, but too many have seen this option lead to more administrative work, lower reimbursement, and barely noticeable improvements in patient outcomes. So what’s the way forward?

Fee-For-Value

I believe the heart of the problem is that we’ve been presented with a false dichotomy: you’re either a fee-for-service cowboy or a VBC zealot. But neither model is the silver bullet to fix an industry as complex and convoluted as US healthcare. For instance, at Health Here, we primarily partner with orthopedic specialists whose patients receive discrete medical services (for example, an MRI or a hip replacement) during a course of treatment that has a clear start and end date. I would argue that, in most cases, this type of care is “shoppable” and that retaining an element of fee-for-service is desirable. However, for ongoing, preventative care, a payment model focused more explicitly on condition-specific outcomes may make more sense.

The right approach, then, is not to force a binary choice but to pursue what I would call “fee-for-value.” In this model, prices for services and their corresponding value are transparent and up-front for the patient and the payer, while providers have standardized methods to validate the quality and appropriateness of their care. Cutting-edge technology and smart regulation connect these puzzle pieces in a way that both cuts administrative costs and boosts reimbursement to high-value providers.

Restoring Intention to Language  

So how do we get to my hoped-for future? I don’t have all the answers, but I do think the first step is to reclaim the term “value-based care” for all of us who believe in the concept but are honest enough to admit that the current rhetoric around it has become empty, as that RAND study so painfully drives home. “Value-based care” should, once again, refer to the north star of medical care, to care that acknowledges the human element of science and the critical role of trust, accessibility, and confidence between patient and provider in delivering positive outcomes. It should no longer be a catchphrase to communicate a failed alternative payment model strategy.

Hang in There

Beyond that first step, I am hopeful. Fee-for-value and the movement towards provider and patient empowerment are expanding among specialist practices all over the country. The surrounding community of patients, providers, and employers interested in a new and better way are increasingly influential among policy-makers and technology professionals like myself. Our platform, Clinic Q, which helps medical practices transition to this new model, has reached over 1 million patients. Positive change, which is certainly not a guarantee in our broken healthcare system, is on the horizon.