Posted in Access to healthcare, advance-pricing, Consumer-Driven Health Care, CPT billing, Defined Contribution Benefit Plans, Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Government Regulations, Health Insurance, Healthcare financing, Patient Choice, Policy Issues, Uncategorized

Why Value-based Payment Methods Won’t Fix Healthcare

I’ve read several posts today on so called “Value-based payment” strategies and I couldn’t resist adding my 2-cents.

VBP can’t fix these fundamental problems because it is still based on a price-opaque shell game I like to call Fee-for-Coding, which results in:

1) Price insensitivity on the utilizer’s part.

2) Misaligned incentives on the provider’s part.

3) Lack of important price signals between buyers and sellers due to lack of advance pricing capabilities.

VBP utilizes the same fundamentally flawed economic system as our current billing model.

Moving to value-based care will require…

1) A system where prices are known in advance of care (not trauma or emergency care where extent of injuries or illness are unknown at onset – but even still a lot of those can be estimated ahead of time based on scenarios).

2) …that physicians be paid to be available to solve our problems, where payment is not tied to documenting work in a chart.

3) …that we move to a system that is based on defined contributions as opposed to defined benefits. As John C. Goodman is fond of saying, “money should follow people”, not programs and insurance policies.

Value will be elusive until we let the discipline of the market work in healthcare.

Posted in Economic Issues, Free-Market, Government Regulations, Medical Costs, News From Washington, Patient Choice, Patient Compliance, Patient Safety, Patient-centered Care, Policy Issues, Prevention, Price Tansparency, Protocols, Quality, Re-Pricing Scams

Value-Based Payment: What Could Go Wrong? | Robert Nelson, MD | LinkedIn

portercircles2 (1)Those of you that recall the 1980’s and early 90’s will remember when primary doctors were transformed into “gait-keepers” or “quarterbacks of the healthcare team” and designated to lead the capitation movement that was supposed to usher in a new era of cost control, efficiency and better outcomes. Suffice it to say, it didn’t quite work out as planned.

Then there was GM’s answer to affordable gas-efficient imports: they put a crappy 4-cylinder engine in over-size chassis and called in the Cadillac Cimarron.  But I digress…

These “solutions” have one thing in common: They did not address the right problem, so they were destined to be an epic fail.The same, I suspect, goes for the newest savior of the healthcare industry: Value-Based Payment Models, or VBP for short.

via Value-Based Payment: What Could Go Wrong? | Robert Nelson, MD | LinkedIn.