In the 1950’s, you had to buy a box of Post’s Sugar Rice Krinkles cereal to get your free Dick Tracy Magic Decoder. So, it really wasn’t free.
Today, I’ll give you a truly free magic decoder. Granted, you don’t get to eat a bowl of milk-soaked crunchy sugar. And you get to decode value-based care (VBC), not Dick’s far more interesting crime-stopper message. So, maybe truly free is not all it is cracked up to be and you’d be better off buying a box of cereal.
VBC, the mother acronym that has given birth to many other acronyms, can be confusing, so let me give you my personal short-hand that helps me cut through the consultant-speak. It seems there are two basic varieties of VBC and then a million variations of each.
First, there are arrangements where a group of providers have substantial financial risk for cost and care that goes beyond what they directly deliver. Maybe it is capitation; maybe is it a Medicare shared savings program through an ACO; maybe it is a bundled payment for a surgery or episode of care.
The thing that knits all these together is that some provider at Point A in the process can do something different that reduces or eliminates a cost at Point B in the process and then gets to pocket some of the savings from that action.
For example, a surgeon (Point A) moves a case from the hospital to a lower cost ASC (Point B), reducing the total cost of that surgery.
The key here is the relatively short, very direct connection between the action at Point A and the cost reduction at Point B. The moment this link gets long or fuzzy, then we can fit everything in the world into VBC. Some smart (aleck) watch telling me to stand up every 60 minutes because that might reduce my risk of some chronic disease 30 years from now could be good advice but does not make the watchmaker a VBC provider.
This is capital letter VBC, the type of arrangements that can really move the needle. It empowers and rewards providers for rethinking the entire delivery channel and eliminating costs that add no value. That is very different from payers reducing cost by just saying ‘nyet’ to patient care.
For the patients who have complex issues that drive a lot of cost, we need providers with the scope, authority, and incentive to ‘manage’ their care. For well-boxed episodes like certain surgeries, we want to motivate those closest to the work to eliminate non-value-added costs.
Whatever we want to call this, sign me up.
Then there is everything else masquerading as VBC that is either a) a good idea, but of a different order, b) much ado about nothing or c) a lame marketing attempt to sneak something into the VBC tent because that is where the cool kids are supposed to be.
Now, let’s make the case for why we should still want (better) fee-for-service healthcare.