Managed care values quality over quantity – Crain's Detroit Business
As many of us anxiously await a resolution to the Major League Baseball lockout, I am confident there will be an overabundance of prospective players trying out for the Detroit Tigers at spring training this year. Unfortunately, the quantity of prospective players wanting to play for the Tigers has never been the problem. The challenge has always been identifying and assembling quality players to make for a winning team.
For decades, under both government and commercial sponsored health care, providers like hospitals and physicians were paid for simply showing up at tryouts. Under the old “fee-for-service” (FFS) payment model in health care, anyone that could swing a bat got paid, even if they struck out.
To address the spiraling costs of health care and lack of quality patient outcomes associated with overutilization of services under the FFS model, managed care health plans stepped up to the plate with a concept that values quality over quantity. Like assembling a good team, managed care health plans first began assessing the quality of providers, reviewing their patient outcomes and specialties, then setting up networks and implementing value-based payment structures for services.
While FFS is still a prevalent method of paying providers, studies have concluded that this model encourages overutilization, and it lacks measurable outcomes and fails to incentivize providers for patient preventative care and wellness. Managed care plans have begun implementing alternative payment models that valued 360-degree patient care and rewarded prevention and wellness efforts.
These value-based care payment models monitor utilization of services and incentivize providers for quality outcomes, not quantity of services. Under value-based care, health plans often provide financial incentives to providers to monitor patient outcomes though capitated fee structures. The goal is to incentivize providers to focus on improving the health of their patients rather than increasing the number of billable services.
The movement towards valued based care payment models has been gaining traction nationally. As patient outcomes improve and costs are better managed, both providers and government-run health care programs are taking notice.
Over the past few years, the federal government has begun implementing similar valued based care payment models in both Medicare and Medicare Advantage plans. As of today, nearly half of all the payments made to providers are through alternative payment methods in Medicare.
As of last year, 14 state Medicaid programs and 19 state employee self-funded insurance programs have successfully built in some form of alternative payment systems based upon value-based care principles. Early results prove that costs and emergency care visits are down as a result.
In the commercial sector, nearly a third of all payment models between payers and providers value the basic principle of quality over quantity.
Like a successful baseball team, managed care health plans are leading efforts to transform the playing field by identifying and harnessing quality providers that apply valued-based care initiatives for their patients.
