Value-Based Purchasing Model Waits for No One

Philip Betbeze, for HealthLeaders Media , February 7, 2014

I don't know if the tale is true, but the fact that it's even believable—and it is—is ridiculous. Yet it fits the strange ethical minefield that's created by the volume-based payment scheme. A head in a bed is not good, even financially, if you fill it at a loss. Left unmentioned, of course, is the ethical issue with treating a patient in such a way as to derive maximum reimbursement from a flawed payment model.

"It really is an ethical issue," says DeMarco. "Maybe you need to rethink your inpatient capacity."

Making such bets on reforming patient care can be risky work, but the return on investment is becoming more definite. Sometimes there's an assumption that the big health systems are the only ones doing this work because they have all the resources and experience and the little guys don't, DeMarco says.

But there are companies that will manage a complex accountable care platform for a per-member, per-month charge, limiting the capital outlay necessary to begin transformation. As the transformation builds momentum, further capital investments can be contemplated and ROI can be better assured.

"The era of fee-for-service medicine is being replaced. What does that mean? Shared risk. We're past the tipping point on that," DeMarco says.

"More than 40% of Medicare eligibles are either going through an ACO or a Medicare Advantage program. That permanently changes Medicare in terms of reimbursement and conditions of participation. There will always will be some fee-for-service. But for the vast majority and as the differentiator, you need to get ahead of this ball called risk."

Philip Betbeze is senior leadership editor with HealthLeaders Media.
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