The Euphemism That Has Become Value-Based Care, With Elizabeth Mitchell—Summer Shorts 9

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I was talking to one health plan sponsor, and she told me if she sees any charges for value-based care anything on any one of the contracts that get handed to her, she crosses them off so fast it’s like her superpower.

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What, you may wonder? Shouldn’t employers and plan sponsors be all over value-based care–type things to do things preventatively because we all know that fee-for-service rewards, downstream consequences–type medical care, no money in upstream. Let’s prevent those things from happening. Listen to the show with Tom Lee, MD (EP445); Scott Conard, MD (EP391); Brian Klepper, PhD (EP437). My goodness, we have done a raft of shows on this topic because it is such a thing. So, why wouldn’t a plan sponsor be all over this value-based care opportunity?

Now, I’m using the value-based care words and big old air quotes. Let’s just keep that very much in mind for a couple of minutes here. I’m stressing right now that value-based care isn’t a one-to-one overlap with care that is of value.

So, let me ask you again, why wouldn’t a plan sponsor be all over this air-quoted value-based care opportunity?

Let me count the ways, and we’ll start with this one. Katy Talento told me about this years ago. She said, it’s not uncommon for dollars that a plan sponsor may pay to never make it to the entity that is actually providing the care to that plan sponsor’s plan members. So, I’m a carrier and I say, I’m gonna charge you, plan sponsor, whatever as part of the PEPM (per employee per month) for value-based care or for a medical home, or pick something that sounds very appealing and value-like.

Some of that money—not all of it, because the carrier’s gonna keep some, you know, for administrative purposes—but whatever’s left over could actually go to some clinical organization. Maybe it’s the clinical organization that most of the plan’s members are attributed to. Or maybe it’s some clinical organization that the carrier is trying to make nicey nice with, which may or may not be the clinical organization that that plan sponsor’s patients/members are actually going to. Like, the dollars go to some big, consolidated hospital when most of the plan’s members are going to, say, indie PCPs in the community, as just one example.

So, yeah, if I’m the plan sponsor in this mix, what am I paying for exactly and for how many of my members? I’ve seen the sharp type of plan sponsors whip up spreadsheets and do the math and report back that there ain’t much value in that value-based care. It’s a euphemism for, hey, here’s an extra fee for something that sounds good, but … The end.

Then I was talking to Marilyn Bartlett the other day and drilled down into some more angles about how this whole “hey, let’s use the value-based care word to extract dollars from plan sponsors” goes down.

Turns out, another modus operandi beyond the PEPM surcharge is for carriers to add “value-based fees” as a percentage increase or factor to the regular claims payments—something like, I don’t know, 3.5% increase to claims. These fees are, in other words, hidden within billing codes. So, right, it’s basically impossible to identify how much of this “value-based” piece of the action is actually costing.

These fees are allowable, of course, because they’re in the contract. The employer has agreed, whether they know it or not, to pay for value-based programs or alternative pay, even though the details are not at all, again, transparent. And that not at all transparent also includes stuff like, what if the health systems or clinical teams did not actually achieve the value-based program goals? What if they failed to deliver any value-based care at all for the value-based fees they have collected? How does anybody know if the prepaid fees were credited back to the plan sponsor, or if anything was actually accomplished there with those fees?

Bottom line, fees are not being explicitly broken out or disclosed to the employers. Instead, they are getting buried within overall claims payments or coded in a way that obscures the value-based portion. So, yeah, charges for value-based care have become a solid plan to hide reimbursement dollars and make carrier administrative prices potentially look lower when selling to plan sponsors like self-insured employers. Justin Leader touches on this in episode 433 about the claims wire, by the way.

Now, caveat, for sure, it’s possible that patients can get services of value delivered because someone uses that extra money. And it’s also possible that administrative costs go up and little if any value is accrued to patients, right? Like one or the other, some combination of both. It goes back to what Dr. Tom Lee talked about in episode 445. If there’s an enlightened leader who gives a “shed,” then indeed, patients may win. But if not, if there’s no enlightened leader in this mix, it’s value based alright for carrier shareholders who take bad value all the way to the bank.

Al Lewis quotes Paul Hinchey, MD, MBA, who is COO of Cleveland-based University Hospitals. And Dr. Hinchey wrote, “Value-based care has increasingly become a financial construct. What was once a philosophy centered on enhancing patient care has been reduced to a polarizing buzzword that exemplifies the lack of alignment between the financial and delivery elements of the healthcare system.”

And then on the same topic, I saw William Bestermann, MD, he wrote, “The National Academy of Medicine mapped out a plan to value-based care 20 years ago in detail. We have never come close to value-based care because we have refused to follow the path. We could follow it, but we don’t, and we never will as long as priorities are decided by businessmen representing stockholders. It is just that simple.”

Okay, now. Let’s reset. I’m gonna take a left turn, so fasten your seatbelts. Just because a bunch of for profit and not-for-profit, nothing for nothing, entities are jazz-handing their ways to wealth by co-opting terminology doesn’t mean the intent of value-based care isn’t still a worthy goal.

And it also doesn’t mean that some people aren’t getting paid for and providing care that is of value and doing it well. There are, for sure, plenty of examples where an enlightened leader was able to operationalize and/or incentivize care that is of value. Occasionally, I also hear a story about a carrier doing interesting things to pay for care that is of value. Jodilyn Owen talked about one of these in episode 421. Justina Lehman also (EP414).

We had Larry Bauer on the show (EP409) talking about three bright spots where frail elderly patients are getting really good care as opposed to the really bad care that you frequently hear about when you even say the words frail elderly patient. And all of these examples that he talked about were built on a capitated model or on a model that facilitated patients getting coordinated care and there being clinicians who were not worried about what code they were gonna put in the computer when they helped a patient’s behavioral health or helped a patient figure out how they were gonna get transportation or help them access community services or whatnot.

There are also employers direct contracting with health systems or PCPs and COEs (Centers of Excellence) and others, contracting directly with these entities to get the quality and safety and preventative attention that they are looking for. And there are health systems and PCPs and practices working really hard to figure out a business model that aligns with their own values.

So, value-based care—the actual words, not the euphemism—value-based care can still be a worthy goal. And that, my friends, is what I’m talking about today with Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health (PBGH). PBGH members are really focused on innovating and implementing change. We talk about some of this innovation and implementation on the show today, and it is very inspiring.

Elizabeth argues for for-real alternative payment models that are transparent to the employer plan sponsors. She wants prospective payments or bundled payments, and she wants them with warranties that are measurable. She wants members to get integrated whole-person care in a measurable way, which most health plans (ie, middlemen) either cannot or will not administer.

Elizabeth says to achieve actual care that is of value, cooperation between employers, employees, and primary care providers is crucial (ie, direct contracts). She also says that this whole effort is really, really urgently needed given the affordability crisis affecting many Americans. There’s been just one article after another lately about how many billions and billions of dollars are getting siphoned off the top into the pockets of the middlemen and their shareholders.

These are dollars partially paid for by employees and plan members. We have 48% of Americans with commercial insurance delaying or forgoing care due to cost. If you’re a self-insured employer and you’re hearing this, don’t be thinking it doesn’t impact you because your employees are highly compensated.

As Deborah Williams wrote the other day, she wrote, “Co-pays have gotten high enough that even higher-income patients can’t afford them.” And she was referencing a study to that end.

So, yeah … with that, here is your Summer Short with Elizabeth Mitchell.

Also mentioned in this episode are Purchaser Business Group on Health; Tom X. Lee, MD; Scott Conard, MD; Brian Klepper, PhD; Katy Talento; Marilyn Bartlett; Justin Leader; Laurence Bauer, MSW, MEd; Al Lewis; Paul Hinchey, MD, MBA; William Bestermann, MD; Jodilyn Owen; Justina Lehman; and Deborah Williams.

You can learn more at PBGH and by connecting with Elizabeth on LinkedIn.

Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health (PBGH), supports the implementation of PBGH’s mission of high-quality, affordable, and equitable healthcare. She leads PBGH in mobilizing healthcare purchasers, elevating the role and impact of primary care, and creating functional healthcare markets to support high-quality affordable care, achieving measurable impacts.

Elizabeth leverages her extensive experience in working with healthcare purchasers, providers, policymakers, and payers to improve healthcare quality and cost. She previously served as senior vice president for healthcare and community health transformation at Blue Shield of California, during which time she designed Blue Shield’s strategy for transforming practice, payment, and community health. Elizabeth also served as the president and CEO of the Network for Regional Healthcare Improvement (NRHI), a network of regional quality improvement and measurement organizations. She also served as CEO of Maine’s business coalition on health, worked within an integrated delivery system, and was elected to the Maine State Legislature, serving as a state representative and chair of the Health and Human Services Committee.

Elizabeth served as vice chairperson of the US Department of Health and Human Services Physician-Focused Payment Model Technical Advisory Committee, board and executive committee member of the National Quality Forum (NQF), member of the National Academy of Medicine’s (NAM) “Vital Signs” Study Committee on core metrics and now on NAM’s Commission on Investment Imperatives for a Healthy Nation, a Guiding Committee member for the Health Care Payment Learning & Action Network. She now serves as an appointed board member of California’s Office of Healthcare Affordability. Elizabeth also serves as an advisor and board member for healthcare companies.

Elizabeth holds a degree in religion from Reed College, studied social policy at the London School of Economics, and completed the International Health Leadership Program at Cambridge University. Elizabeth was an Atlantic Fellow through the Commonwealth Fund’s Harkness Fellowship program.

10:36 What are members and providers actually asking for in terms of value-based care?

10:56 Why won’t most health plans administer alternative payment models?

12:17 “We do not have value in the US healthcare system.”

12:57 Why you can’t do effective primary care on a fee-for-service model.

13:30 Why have we fragmented care out?

14:39 “No one makes money in a fee-for-service system if people are healthy.”

17:27 “If we think it is not at a crisis point, we are kidding ourselves.”

You can learn more at PBGH and by connecting with Elizabeth on LinkedIn.

@lizzymitch2 of @PBGHealth discusses #valuebasedcare on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcareleadership #healthcaretransformation #healthcareinnovation #vbc

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