Opportunities, Challenges of Value-Based Care Adoption

Kenneth L. Davis, MD, believes that keeping patients healthy and ultimately out of the hospital is the key to making healthcare more affordable. That is why he is leading one of the nation’s top health systems down the path of value-based care adoption.

Mount Sinai Health System has been at the forefront of the transition from fee-for-service care delivery to the value-based care model, and that strategy has been successful. After years of investment and implementation, the health system has realized lower inpatient admissions and readmissions among patients in value-based contracts. Total cost of care has also shrunk for a majority of the health system’s value-based contracts because of quality improvements.

However, as Mount Sinai Health System works to do away with fee-for-service, the healthcare industry at large is still holding on to the old way of delivering care.

“It’s much easier for physicians to do fee-for-service,” Davis admits, discussing Mount Sinai Health System’s own experience with shifting their primary care physicians to a value-based care model.

“You need to incentivize the doctors to cooperate with a value-based program instead of doing fee-for-service,” Davis explains.

Like many provider organizations, Mount Sinai Health System experienced some pushback from physicians. Many doctors in the health system were concerned about their bonus, which is a major provider compensation factor for most physicians. If they were expected to reduce utilization, then how could they expect to earn a bonus?

Tying provider compensation to quality was not only the key to incentivizing providers but also driving value-based care progress.

“We have to use quality metrics and here’s why that’s a good idea,” Davis states. “In a value-based world in which there are no quality metrics, the best patient is one you never see. The consequence of never seeing a patient though is that you don’t perform any preventive tests or you don’t pick up illnesses at an early stage.”

That type of care can be devastating for a patient at high risk of developing cancer, for example.

“For a woman at risk for breast cancer, we can look for the BRCA genes. You’ll also need ultrasounds and mammograms regularly. But for physicians to do that for all their patients at risk of developing breast cancer means their utilization will go up and value-based contracts will kill them. They won’t get paid.”

Instead, Mount Sinai Health System started paying their primary care physicians a bonus based on the quality of care they delivered to their patients. So, they could get paid for delivering mammograms, cancer screenings, and other preventive services.

“All of the services you think are essential to good quality care have to be part of the bonus,” Davis says. “Then, physicians will be able to still take care of patients and identify at-risk situations. That is something we worked on, and we worked through.”

While providing the right incentives has helped Mount Sinai Health System progress with value-based care implementation, the health system still faces one of the greatest barriers to more widespread adoption: data access.

“The data for value-based care is missing,” Davis explains. “If you’re an insurer and you’re negotiating with say, Mount Sinai, and we have hundreds of thousands of patients who came to us last year with your insurance, we’d like to put them in a capitated program. You have to look at the data and find out what services those patients had, what comorbidities they had, and so on. It is hard to price that without a database that is accurate.”

There is a lot on the line if payers and providers can’t access the most complete, accurate data, too. In capitated programs, for example, both parties are taking on financial risk. If the pricing is too low, it is difficult for providers to keep total costs of care low enough to earn a payment. Making matters worse is the fact that providers do not have access to where their patients are going outside of their system.

“Without comprehensive databases and the people who can analyze then, you wind up with an insolvable value equation,” Davis says. “So, people go back to fee-for-service.”

The challenges of data access have hindered the speed of value-based care adoption for providers, so much so that Davis describes the current pace as “glacial.”

“It’s much slower than we expected,” Davis adds.

Provider organizations can create the right incentives for their physicians and implement the right population health programs to contain costs and improve quality. However, payers need to put in the work, too, according to Davis.

“I don’t know who is going to knock on my door with say a BlueCross policy. This has to be in the hands of the insurers who know the data and can share that data when we get down to contracting. Then, we can all come up with a fair value-based reimbursement system.”

Each payer is going to have different priorities and resources to dedicate to data management and value-based care though. Whether payers will cooperate with providers requesting more access to data remains to be seen. But organizations like Mount Sinai Health System are pressing companies to move in that direction and make value-based contracting a priority. After all, the transition for the health system is improving outcomes for its patients and bending its healthcare cost curve.