Value-Based Medicine: Part 1

Value-based payment: What does it mean, and how can ObGyns get out ahead?

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Paying for value seems to be all the rage in health care right now. But what does this term really mean? And what is behind this move toward incentivizing value?



For ObGyns to be successful, understanding the basics of quality and cost measurement is essential, along with devoting more attention to what they are being evaluated on and held accountable for. But how will ObGyns be impacted by the push to incentivize them for delivering value in their work?

Although much of health care policy has become politically divisive lately, one area of agreement is that, in the United States, we have unsustainable health costs and the exorbitant amount our country pays for health care does not translate to improved outcomes. The United States spends more than most other developed nations on health care (roughly, $9,403 per capita in 2014) but has some of the lowest life expectancies, along with the highest maternal and infant mortality rates, compared with peer nations.1–4

One of the key culprits in our health system’s inefficiencies is the fee-for-service payment model. Fee-for-service incentivizes the delivery of a high volume of care without any way to determine whether that care is achieving the desired outcomes of improved health and quality of life. Not only does fee-for-service drive up the volume of care but it also rewards the delivery of high-cost services, regardless of whether those services provide what is best for the patient.

During the previous administration, Secretary of Health and Human Services Sylvia Mathews Burwell set goals for moving away from fee-for-service in Medicare and in the health system more broadly. Congress also passed legislation that provides incentives for Medicare providers to transition away from fee-for-service with the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). While fee-for-service remains the predominant form of payment for many physicians, value-based payment arrangements are gaining a toehold. In 2014, 86% of physicians reported working in a practice receiving fee-for-service. Those fees accounted for nearly 72% of revenue.5 This percentage likely will continue to decrease over the next few years as government and private payers seek to promote value-based payment systems.

Assessing quality

“Value” in the context of health care is often defined as quality or outcomes relative to costs.6 Before payers can reward value, there must be measurement of performance to determine the quality of care being delivered. Quality measures are tools to help quantify access to care, processes, outcomes, patient experience, and organizational structure within the health care system. ObGyns likely encounter process, outcome, and patient experience measures most frequently in their practice.

Although outcome measures are generally held as the gold standard for quality measurement, they are often hard to obtain—either because of issues of temporality and rarity of events or because the data are hard to capture through existing formats. In lieu of measuring outcomes, process measures are often used to determine whether certain services that are known to be tied to desired health outcomes were delivered. Patient experience measures are also rising in popularity and are seen as a critical tool to ensuring that care that purports to be patient-centered actually is so.

Measures are specified to different levels of accountability, ranging from the individual physician all the way to the population. Some measures also can be specified at multiple levels. One major concern is the problem of attribution—that is, the difficulty of assigning who is primarily responsible for a specific quality metric result. Because obstetrics and gynecology is an increasingly team-based specialty, the American College of Obstetricians and Gynecologists (ACOG) recommends that measures that are used to reward or penalize providers should reflect performance at the care team or practice level, not at the individual physician or health care provider level.7 As consolidation of providers continues, it is expected that team-based care will increase and that the use of advanced practice providers will increase.8

Data to determine performance can come from a variety of sources, including claims, electronic health records (EHRs), paper medical record abstraction, birth certificates, registries, surveys, and separate reporting mechanisms. There are pros and cons of these various sources. Because administrative claims data are so easily obtainable, many measures have been developed based on this data source, but there are significant limitations to assessments made with such data. These limitations include inherent problems with translating clinical diagnoses into specific codes and inadequate documentation to support particular diagnoses and procedure codes.9 Claims data are limited by what physicians and other health care providers code for in their claims, making proper coding an essential skill for ObGyns to master.

Although there has been an increase in measures that rely on clinical data found in EHRs and registries—which are more robust and capture a wider breadth of indicators—claims-based measures still form the basis for many reporting programs because of standardization and ease of access to data. Data quality will become increasingly more important in a value-based payment world because completeness, risk adjustment, and specificity will be determined by the data recorded. This need for data quality will require that improvements be made in the user interface of EHRs and that providers pay specific attention to making sure their documentation is complete. New designs for EHRs should assist in that task, and data extraction should become a by-product of documentation.10

Read about alternative payment models and how ObGyns can succeed.


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