Healthcare Reform "Value Promotion & Reward" Strategy

I've been writing about the need for high value healthcare for over four years. In the past year or so, more and more people have begun discussing the notion of value with regards to healthcare reform.

I've recently participated in one such discussion at KevinMD in a post about the tension between physicians and health policy experts (at this link) and another about how physician consolidation places health reformers in an ironic dilemma (at this link).

My comments focused on making the case that success healthcare reform models must be built on strategies focusing on (a) delivering high value care to every patient (client/consumer) by (b) enabling and rewarding the efficient delivery of high quality (safe & effective) “sick-care” (treating illness and dysfunction) and “well-care” (prevention and self-maintenance) within (c) a trust-worthy learning environment that promotes continuous, demonstrable improvement in care value.

Such strategies measure value as quality divided by cost, which is a measure of cost-effectiveness.

Key tactics of this value promotion & reward strategy are:

• “Value-pricing,” which means paying more for healthcare services and products proven to be more cost-effective (and vice versa)
• Patient-centered cognitive support, which consists of advanced health IT systems that help practitioners/clinicians/providers avoid information overload as they: (a) gain deep knowledge patients’ problems and risks, along with sharp awareness of the most cost-effective diagnostic, treatment and prevention options and (b) use that knowledge and awareness to make valid decisions, take competent actions and achieve good outcomes 
• Shared decision-making, during which health practitioners educate patients about their treatment options in understandable language that takes into account patients’ individualized needs, circumstances and preferences
• Practice-research collaboration (knowledge networks) that generate and disseminate ever-evolving evidence-based preferred practice guidelines and self-help recommendations
• Healthcare delivery models assuring access and availability of high-value care to everyone.

Related posts:

The Need for a Value-Pricing Model in Healthcare
Enabling EHRs to Improve Care
Healthcare Reform Models Focusing on Value to Consumers - Part 1
Healthcare Reform Models Focusing on Value to Consumers – Part 2
Healthcare Reform Models Focusing on Value to Consumers – Part 3
Four Interlocking Issues about Fixing American Healthcare
Patient-Centered Life-Cycle (PCLC) Value Chain--Process Reform: Pay for Value

The Need for a Value-Pricing Model in Healthcare

We must reduce overall healthcare costs and improve quality, which would increase value to consumers (patients/clients), improve their quality of life, and increase access.

The metric for Value is Quality divided by overall Cost. Quality is the effectiveness of (a) treating illness/dysfunction treatment (as measured by risk-adjusted clinical outcomes, such as changes in a patient’s signs and symptoms); (b) preventing illness/dysfunction (wellness); and (c) stabilizing chronic conditions (disease management). Overall costs—including the cost of meds, tests, treatments and equipment/devices—rises because of inefficiency, waste, errors/malfunction resulting in additional care, excessive tests and procedures, over-prescribing, excessive risk, failure to select good lower cost alternatives, administrative & operational overhead (including malpractice insurance), etc.

From a consumer’s perspective, therefore, greater value care is more cost-effective care.
I contend that we should all be focusing how to increase healthcare value by:

• Rewarding providers and manufacturers who deliver higher-value services and products
• Enabling physicians and other practitioners to deliver high-value care through health IT, care coordination, ongoing clinician-researcher collaboration to build and evolve value-enhancing evidence-based guidelines, etc.
• Enabling consumers to distinguish between high- and low-value services and products
• Reducing providers’ economic burdens by lowering medical school costs through subsidies and malpractice insurance rates for high-value providers.

This is the essence of a “Value-Pricing” (Pay for Value) model of healthcare; it is a sensible alternative to the insane open-ended fee-for-service (pay for volume) model and the restrictive salary-only model.

The policy wonks, healthcare providers, researchers, payers and consumers ought to be debating how to make Value-Pricing a reality since it is the only rational way to achieve the ultimate goal presented above. All other conversations simply miss the point!

Related posts:

Healthcare Reform "Value Promotion & Reward" Strategy
Healthcare Reform Models Focusing on Value to Consumers - Part 1
Healthcare Reform Models Focusing on Value to Consumers – Part 2
Healthcare Reform Models Focusing on Value to Consumers – Part 3
Four Interlocking Issues about Fixing American Healthcare
Patient-Centered Life-Cycle (PCLC) Value Chain--Process Reform: Pay for Value