In a fee-for-service health care system, the payment is linked to quantity of service, which in turn drives more tests, images, inpatient and outpatient days and so forth. So it should come as no surprise to any of us that value-based plan designs cannot thrive in a fee-for-service environment, because the essence of value-based is paying for quality within system contracts and paying for choosing quality within benefit designs.

To be clear, value-based reimbursement does not hinge on any one set of goals — goals can be driven by rates of chronic disease, gaps in appropriate care, new evidence, even community assets such as safe parks for recreation. Value-based reimbursement must include a clear signal on cost-efficiency, which does not necessarily mean "cheaper cost per unit" but rather considers adherence and persistence to lifestyle and/or treatments that are recommended. The efficiency comes when people are matched to the treatment based upon their ability to understand and adhere to the protocols around said treatment.

In the past few years, the reimbursements and the IT to support them have focused on bundled payments, an effort to streamline and manage the total cost of some conditions most often using evidence to create a normal course of treatment. Actuarial models are used to adjust risks, such as extra days in the hospital because of a complication that could not be avoided (as opposed to a complication that could be avoided, which instead would lead to reduction in payment).

Bundled payments, at their simplest, are like considering a plane ticket for travel. The luggage handlers, fuel costs, safety inspections, traffic controllers, parking lots are all figured into the cost of the travel. In bundled payments for health care, the clinician fees, operating room costs, nurses and med techs, anesthesiologists, bandages, vaccines, tests, images, physical therapy are all wrapped into an appropriate fee for the treatment of the condition. It is meant to simplify the accounting for the total care while at the same time providing a more stable platform on which to base quality and reimbursement.

The danger in the bundled payments is that they can put undue pressure into the system to hold down costs at the expense of the patient outcomes. Because the bundling is built on normalized interventions, the clinicians or hospitals that provide services to more complex patients either must agree to an actuarial adjustment or must step out of the bundle — both of which derail the outcomes and value for the patient.

In short, there is a danger of fee-for-service purchasing to acquire cheaper services in order to reduce total costs in the bundle. Accountability for outcomes becomes a second or third-tier consideration. Unless there is a voice for the value of the interventions — an entity that can compare transparent costs in a bundled payment and determine what is best. That entity is the consumer.

This is where the patient engagement and accountability must be supported. For example, this is where the efforts of the Office of the National Coordinator for Health Information Technology, known as ONC, with BlueButton become imperative.

BlueButton is an application that allows the patient to download his or her health care data from any and all of the providers he/she uses. It's not an option, it's a requirement, that data be shared with the patient. The past few years have seen BlueButton technology built for electronic health records, and health systems and health plans have been working to update their systems to accommodate this rollout. It's been called the Meaningful Use (MU) program, and phase II is about to begin.

Lygeia Ricciardi, director of ONC’s Office of Consumer eHealth and head of the BlueButton initiative at the ONC writes in a press release: ONC’s vision for Blue Button is that any consumer in any health care setting can view, download, share and use their personal health data from any provider, hospital, pharmacy, or other data-holder of their personal health information.

Ricciardi calls out the lack of public demand for digital health records as one of the greatest obstacles to increased consumer engagement in their own health. Finally, the opportunity for consumers to be patients-with-data is here, and the consumer can be the co-creator of health.

This has been the problem with value-based health care: There were gaps in data and competency in each stakeholder, from consumer to patient, to physician to hospitals, to insurance companies and consultants — no one had a handle on the total patient experience. Outcomes were tied to penalties for patients who didn't meet the goal — exactly the wrong experience for an engaged consumer.

If consumerism is to work, if outcomes are the measures, then the consumer must have access to the quality and cost information and must then make a choice. Inherent in the consideration will be lost time at work, with family/community, impact on the family, and impact on the budget, which would be exactly the decision points for accountability in buying a house or changing jobs. The whole person must consider the whole impact.

For true patient-centered care to be effective, the value to the patient must be a central part of the decision process. For value-based decisions to succeed, they must consider the patient impact beyond clinical. For bundled payments to be the stepping stone to value-based reimbursements, the data must be shared transparently with the decision makers.

Nayer is founder and CEO of the Center of Health Engagement (, merging value-based designs and reimbursement with digital accelerators to achieve health and economic outcomes.


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