Defining “value” in value-based care at City & State's On Healthcare

For the past few years, the hot trend in health care reform has been the concept of “value-based care”: a shift in focus toward quality of care instead of volume of patients treated.

For many, this approach has been seen as a breath of fresh air. The idea that a patient’s experience could now play a bigger role in policy decisions and funding distribution was nothing short of revolutionary for an industry where bad customer service had few repercussions, because of the limited options available to most people. But there is a catch.

“The question is, value for who?”

That question was posed by Dr. Ramanathan Raju, the president and CEO of NYC Health + Hospitals, during an expert panel at City & State’s recent On Health Care event. Raju was joined by Assemblyman Richard Gottfried, New York State Nurses Association President Jill Furillo and EmblemHealth President and CEO Karen Ignagni.

The four panelists each brought their own perspective in answering Raju’s question, resulting in a dynamic conversation that shed light on the dilemma facing the entire health care industry. Under the current system, report cards are issued for hospitals and other health care facilities grading various factors, such as patient satisfaction and health outcomes, and whether they are readmitted to the hospital. These grades then have an impact on how funding is distributed. But what has not been clearly defined is which metric is most important – costs to hospitals, patient outcomes, or some standard determining overall good for society?

“There must be a fundamental discussion in our country regarding what it means to be a part of (value-based care),” Raju said. “That is something we need to define, because accountability needs to come with value-based care.”

Gottfried, the chairman of the Assembly Health Committee who has spent decades crafting health care legislation in Albany, echoed that perception of a lack of accountability. His concern is that hospitals and other medical facilities currently have more incentive to keep costs down because they are unlikely to reap the benefits that better care will sow down the road.

“If the payoff in savings comes 10 or 20 years later in the patient’s life when they probably moved to another city and the provider that put in a lot of effort keeping them healthy today gets none of the financial benefit, then having that provider ‘at risk,’ it doesn’t incentivize the provider to make that patient healthier,” Gottfried said. “It incentivizes the provider to spend less money today, without a whole lot of focus on what happens 10 years from today.”  

Furillo piggybacked on the assemblyman’s comments by raising concerns that the current system, and particularly the state’s “roadmap” for value-based care, does not consider social factors like poverty. She singled out Health + Hospitals as an example of an institution that is providing quality care to patients, based on recent studies, but is not receiving appropriate funding because many of its patients are from poorer communities.

“We have many people suffering from poverty-related diseases, in medically underserved communities that for many years went without access to care. … These are folks that need more health care, not less health care,” she said. “These people may need to be readmitted to hospitals and that hospital should not be penalized for that readmission.”

Furillo went on to warn that failing to fund the public hospitals that serve the state’s most vulnerable populations could ultimately end up hurting private hospitals as well.

“It is the existence of our public health system that allows the private system to be able to be profitable,” she said.

Despite all the concerns about defining value-based care, Ignagni said the move toward value-based benefits and purchasing is a positive one overall because it is finally incentivizing physicians to do the right thing.

“When we do value, we don’t start with the cost,” she said. “We map out what we want to happen for the patients. When we get to the hospital side, then if we are doing bundles with the hospital, we say, how can you make sure that that patient is well treated and doesn’t wind up back in the hospital? These are the kind of things that changing incentives, putting the health plan, the physicians and the hospital on the same side of the table, working together to put the patient at the center of this discussion, really does change things fundamentally.”

Ultimately, as Raju pointed out, the discussion over defining value-based care may be a microcosm of a larger debate over the direction of health care in the country.

“The problem is that health care in this country is a rental car. Nobody takes a rental car for a car wash,” Raju said. “So, there is no accountability on anybody’s part.”