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.
“To boil it down to where the intersection exists between the three areas, it comes in the form of partnering, finding opportunities to share relevant and timely information with each other and to embrace physicians as part of the solution to achieving enhanced value within the health system,” Abrams says. “At the core, care remains the cornerstone of the physician and their team, so the more we can include physicians on the advancement of clinical protocols, the development of relevant quality measures, the evaluation of the effectiveness of different care options is a great benefit for all sectors within life sciences and healthcare.”
Tying Physician Compensation to Performance
Currently, according to the report, value-based payment arrangements represent a relatively small source of physician compensation; three in 10 physicians now receive some compensation from value-based arrangements. Similarly to the consulting firm’s 2014 findings, a majority of physicians (more than 8 in 10) still report being compensated under fee-for-service (FFS) or salary. While physician participation in value-based payment models is increasing (30 percent in 2016 versus 25 percent in 2014), few physicians participate in models that have the greatest downside risk (10 percent in capitation and 4 percent in shared-risk arrangements).
Additionally, the survey found that 51 percent of physicians in the survey reported performance bonuses less than or equal to 10 percent of their compensation, and one-third reported that they were ineligible for performance bonuses.
The Deloitte report authors suggest that at least 20 percent of a physician’s compensation should be tied to performance goals.
“What we’ve seen and what the data supports is that in order to make incentive-based performance meaningful, it has to reach a certain threshold and 20 percent seems to be that threshold,” Abrams says. “If you’re going to begin to create an incentive-based performance management program for physicians, and I would say that this is more than physician compensation but also probably consistent with executive compensation as well, that 20 percent threshold is about where meaningful activation seems to rest.”
The Right Tools and Technology Capabilities
As mentioned above, a key finding in the physician-based survey is that tools to support value-based care vary in maturity and availability. While three in four physicians have clinical protocols, only 36 percent have access to comprehensive protocols, and only 20 percent of physicians receive data on care costs.
The survey findings demonstrated that physicians with access to some types of advanced capabilities, for example, clinical protocols and/or care pattern information, were less likely to say they feel underprepared for quality reporting requirements such as those considered under MACRA.
According to Abrams, physicians are looking for better clinical protocols and quality measures that align with their specialties. “They are absolutely looking for measures that are consistent with the patients that they care for. Giving people measures that are generic but aren’t relevant to the patients that they are caring for really doesn’t provide great benefit or value to anyone. So they want to focus on measures that really matter, and they want to have the tools to be able to interpret the information that’s being shared with them. They want those tools, particularly the decision support tools, that can help them make informed decisions and they want them to be readily available at the point of care,” he says.
Additionally, based on the survey findings, physicians want measures that emphasize outcomes rather than processes of care, and detailed data on their own performance and on physicians to whom they refer patients. The Deloitte survey findings suggest that many physicians currently lack these tools, but when made available, they impact performance.
“There is information that’s necessary to evaluate, for example, the true cost of care for an episode such as taking care of a patient with community-based pneumonia versus caring for a patient with pneumonia that requires hospitalization. They need the tools to be able to connect the ambulatory environment with the inpatient environment. They also need the tools to be able to analyze the effectiveness of treatment on those patients to ensure that the right course of treatment produces the optimal result and get some predictive value out of the information that’s been captured and stored, and also that they’ve got relevant cost information so they can make informed decisions,” Abrams says.
The survey findings also suggest that care pattern reports, which provide physicians with feedback on their clinical practices, are available to most physicians, but challenges still remain. Sixty-five percent of surveyed physicians reported receiving care pattern information, however, there are gaps between the reported availability and the perceived usefulness of these tools.
Specifically, physicians noted that care pattern reports should contain information on clinical outcomes, patient experience measures, and cost. In practice, though, physicians reported mostly receiving information on “process” measures, such as quality-of-care information, rather than clinical outcomes, according to the report.
When asked about improvements to care pattern reports, physicians cited that they would like the data to be adjusted for patient complexity or severity (60 percent), to be trustworthy and consistent with their experience (51 percent), and to have a stronger focus on outcomes instead of processes (36 percent).
The survey findings suggest that many physicians distrust the data they receive or find it difficult to integrate that data into their daily practices. “There’s a great deal of skepticism around the data, because the data is hard to validate, under many circumstances,” Abrams says. “Some of the proprietary reports that get into the public domain, the methods aren’t readily apparent and some of them are considered proprietary and, therefore, not available for physicians to be able to review and analyze so it’s generated a fair amount of concern as to the validity of some of that data.”
“And the second part of it is that,” he continues, there has always been a tension between the health plans, who have a lot of the claims data and the consumption data, but that information has not been shared readily with the provider community. The same goes for the provider community not as readily sharing the clinical data elements with the plans. I think that dynamic is beginning to change as we’re seeing more a recognition that providers and plans have to partner together if we’re truly going to be able to improve the value that our healthcare system is providing for the country.”
Under MACRA, performance on resource utilization and quality measure will be factors affecting the level of physician reimbursement in Medicare. The fact that only one in five physicians reported receiving resource utilization data points to the need to develop these reporting capabilities further, the report authors noted. Not only do physicians need to receive this type of information, but the data need to be presented in a way that is useful, easy to understand and actionable. Further, the report authors wrote, quality data used in setting performance benchmarks should be reliable, reproducible and focused on outcomes within physicians' control.
And Abrams suggests that it is the tools and technology, rather than the financial incentives, that will stimulate wider adoption of value-based care. “If we give physicians the right information that’s going to help them to provide better care to their patients and do so within their workflow that minimizes disruption to already busy and challenging days, we’ll see greater and greater results. The financial incentives help secure that, but they are not going to motivate it,” he says.
“Many physicians are not informed about MACRA. Many physicians who do know about MACRA, don’t understand it,” he admits. “It’s a complex law and set of regulations that have come with the final rule. I think many physicians aren’t prepared for what’s necessary relevant to reporting, which is part of the reason why CMS pushed back and loosened some of the reporting requirements for 2017. There’s more uncertainty than certainty about what it’s actually going to mean, and there’s still more information to be gleaned before physicians can clearly understand it.”
Currently, Abrams says he has seen “two camps” with how organizations are approaching their preparations for MACRA. “There are a set of organizations that have said, ‘We’re going to inform and educate our physicians early and often about what’s in MACRA even given the large number of uncertainties that exist.’ And there are other organizations that have said, ‘No, until we have more clarity about what it’s going to mean, we’re going to limit the amount of information around MACRA that we’re going to try to generate, because it’s going to create more concern on the part of physicians than it’s going to alleviate.’ So I think it’s very much a work in progress that is taking place.”
He adds, “I’d lean more toward the side of we should be sharing as much information with the physician community as we can and allowing them to generate more questions, which will allow us to be better and better informed as these models continue to evolve. There is no question that MACRA was designed to be disruptive and shielding physicians from that disruption likely is not going to do anybody any great service.”