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What Do Physicians Need to Transition to Value-Based Care?

October 31, 2016
by Heather Landi
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The ongoing transition from volume-based to value-based payment and care delivery models in healthcare has been a monumental industry-wide effort over the past few years, but there are many indicators that the pace of change has been slow, according to a recent Deloitte report.

The Deloitte Center for Health Solutions’ report, “Practicing Value-Based Care: What do doctors need?” offers physician perspectives on practicing value-based care based on Deloitte’s survey of 600 U.S. primary care and specialty physicians.

And the survey findings come on the heels of the Centers for Medicare & Medicaid Services’ (CMS) posting of the final Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) rule on October 14. The new law will fundamentally change how eligible Medicare physicians will be reimbursed, starting with an outcomes-based Quality Payment Program set to kick off in 2017. MACRA sets two reimbursement tracks for physicians in Medicare. The default track is the Merit-Based Incentive Payment System (MIPS), which varies payments to physicians based upon their individual performance on cost and quality indicators as well as their use of health information technology and clinical improvement activity. Additional payments go to physicians and other clinicians who participate in advanced Alternative Payment Models (APMs), or certain value-based payment models that carry both upside and downside financial risk.

According to the Deloitte report, there is currently little focus on value in physician compensation and physicians are generally reluctant to bear financial risk for care delivery, and both are factors in the slow pace of adoption. Another key finding is that tools to support value-based care vary in maturity and availability.

Ken Abrams, M.D., managing director in Deloitte Consulting’s strategy practice and Deloitte’s Life Science and Health Care national physician executive, says having physicians engaged and involved is critical for value-based care since their decisions impact treatment, costs, and quality, and he also contends that various stakeholders—health systems, health plans and biopharma and medical technology companies—should consider their role in helping physicians transform care delivery.

According to Abrams, the survey suggests many physicians conceptually endorse some of the main principles behind value-based care, such as quality and resource utilization measurement.

“They do support the overall concept of value-based care and delivering value to their patients,” he says. “The first element all physicians come out with is the importance of the Hippocratic Oath, and based upon that, to do no harm, they want to embrace value-based concepts. In that regard, I think what most people perceive as being value-based in the clinical environment, which is really good outcomes with minimal if any complications associated with those outcomes, I think they really want to provide that care at a very appropriate expenditure and use of resources. I think, by and large, most physicians are looking to achieve those ultimate goals.”

Abrams continued, “What’s lacking for them is a few things, one is the information. The absence of information makes it hard to make informed decisions, and the survey demonstrated the availability of accurate and reliable cost data, for example, makes it hard to choose. And, then, complicated by that, is some of the complexities that go into the way in which they are currently financially incentivized, which is to pursue high volumes of activity because that is how they are reimbursed. To move to the environment where they are paid for the overall value that’s developed, and ultimately paid on the basis of outcome success, is going to require not just a change in payment reform but a significant change in access to information and a focus on measures that really matter and that matter to the patients and also matter to the clinical outcomes.”

So, what can health care organizations do to stimulate wider adoption of value-based care and support physicians in practicing value-based care? A combination of financial incentives and data-driven tools and capabilities may help doctors to align their activities with value-based care principles, Abrams says.

And, Abrams contends that CIOs at healthcare systems and other healthcare delivery organizations have a strategic role to play in this effort.

“The CIOs are in a great position to help physicians in many, many ways. The CIOS and chief medical informatics officers (CMIOs) are in the position to be able to really help take all the data that’s been gathered and accumulated in their electronic health records (EHRs) and in their systems as they have connected inpatient and ambulatory environments, and as they have begun to collect appropriate cost of care data around episodes or bundles of care, or even just admissions and visits, the CMIOs and CIOs are in the position of taking that data and creating the analytical capability that allows us to turn data into information and information into action,” he says.

Specifically, the Deloitte report outlines three areas that healthcare industry stakeholders should focus on to facilitate physicians’ transition to value-based care delivery and payment models—tying compensation to performance, equipping physicians with the right tools to help them meet performance goals and investing in technology capabilities to connect and integrate the tools.


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