Value-Based Payments: But Is There Any Value for Doctors?

Leigh Page


October 08, 2015

In This Article

Value to Whom?

The health system is moving toward value-based medicine, a care-management strategy that pays doctors for pursuing high quality while simultaneously reducing costs. Value-based payments can be used along with pay for performance (P4P), bundled payments, capitation, and shared savings through accountable care organizations (ACOs).

Although the march to value-based payments has been relatively slow and uneven, payers are now dramatically pushing the pace. In January, the Department of Health and Human Services announced plans to have 30% of Medicare payments in value-based arrangements by 2016 and 50% by 2018.

Many doctors, however, are still skeptical of the purported advantages of value-based medicine for patients and for their practices. For example, a study[1] last year reported that 60% of practices weren't willing to join ACOs.

Value-based care is clearly positive for insurers (including Medicare) in that it can lower costs, but does it bring benefits to physicians or patients? Should doctors be embracing value-based approaches instead of holding back? In short, is there real value to value-based care? Here's a look at several aspects of this strategy, and what it means for doctors in large and small practices, employed physicians, and specialists.

Can You Become a Better Clinician?

Some aspects of value-based medicine could make physicians better clinicians, according to Nitin Damle, MD, managing partner of an eight-physician practice in Wakefield, Rhode Island, and president-elect of the American College of Physicians.

His practice has qualified as a level 3 medical home and uses patient registries that track key clinical measures and show each patient's need for lab and preventive services. "The most value is going to come from patient registries," Dr Damle says. "For example, a registry can objectively measure good diabetes control and identify gaps in care, such as monitoring patients' warfarin use."

But Dr Damle adds, "It remains unclear whether value-based payment results in better patient outcomes." Most studies have shown only slight improvements in care. For example, a 2011 Cochrane review[2] of seven major studies on value-based approaches found that six of them showed positive but modest effects on quality of care for some, but not all, primary outcome measures.

The value-based approach often involves meeting process-of-care measures, such as those listed in the Healthcare Effectiveness Data and Information Set (HEDIS), developed by the National Committee for Quality Assurance. Patient registries are often based on meeting HEDIS measures, such as A1c testing for diabetes patients.

P4P programs tend to reward physicians for these processes of care rather than achieving better outcomes, such as lowering cases of diabetic retinopathy, according to Harold D. Miller, president and CEO of the Center for Healthcare Quality and Payment Reform in Pittsburgh. "Real outcomes can take years to materialize," he says.

Of course, it would be impractical to wait for years to reward physicians for better outcomes, but this lack of attention to outcomes in P4P programs troubles Miller. "Focusing on keeping patients out of the emergency department could win almost immediate savings, whereas focusing on better management of diabetes and hypertension could take years before you see results," he says.

In addition, some P4P programs incorporate patient satisfaction measures, such as the Agency for Healthcare Research and Quality's Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey, or their CAHPS Clinician and Group Survey, used for practices.

Although patient satisfaction is often linked to better quality of care, it can also reduce quality, according to Deborah Walker Keegan, PhD, a practice management consultant in Arden, North Carolina. For example, she notes that responsibly refusing a patient who demands more antibiotics or extra painkillers could result in a lower score.


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