Value-Based Care: A New Health and Trust Paradigm

By Jane Sarasohn-Kahn, THINK-Health and Health Populi blog

“Price is what you pay. Value is what you get.” – Warren Buffett

For consumers in the U.S. who receive health insurance through employers, the average monthly premium costs more than a median monthly mortgage payment: the health plan cost for a family of four reached $22,463 in 2022, and the average monthly mortgage payment hit $1,759.

When housing and health both rank as basic needs in Maslow’s hierarchy, what’s a health system to do?

Embrace value-based health care ASAP.
Shun discounted fee-for-service or “lite” VBC-in-name-only with payment models that avoid taking on risk.

Warren Buffett was referring to Benjamin Graham when he coined, “Price is what you pay. Value is what you get” in a 2008 letter Buffett wrote to Berkshire Hathaway shareholders. Buffett’s mentor Graham came to be known as “the father of value investing.”

Just as Graham and Buffett have been firmly focused on returns on investment, when spending on health, improving patient outcomes is the essential ROI to creating value.

Why value-based care? Why now?

If it’s outcomes that are the health care value end-game, then the fee-for-service financing model makes no sense; nor does it translate into a sustainable value proposition. Since fee-for-service came into being in the 1930s (yes, nearly a century ago), primary care has gotten short-shrift…and health care spending in America ballooned to nearly $1 in every $5 spent in the national economy, with peoples’ health outcomes ranking among the lowest in the developed world.

Simply put, people who live in places that invest more in primary care and social drivers of health have better outcomes.

The Primary Care Collaborative has been working to shift things forward. And Scott Shreeve and Crossover have been talking about this for nearly a decade (see this, one of my favorite of Scott’s blogs on Geisinger, written in 2009).

But we need more momentum.

In addition to cost-unsustainability, we have a human capital sustainability crisis: over 300,000 physicians, nurse practitioners, physician assistants and other clinicians left the workforce in 2021 due to burnout, retirement, and pandemic-related stressors.

Furthermore, in the wake of the COVID-19 pandemic, we better understand the factors that shape whole human health beyond medical care: drivers of health like access to healthy food, transportation that gets us to care and to work, education that bolsters our literacy and job prospects, and access to connectivity as a crucial on-ramp to health. So again, why are we not doing a better job addressing these needs?

The convergence of unsustainable costs, the clinical human capital crisis, and risks to the drivers of health compel us to envision and scale health care based on four key pillars that, together, bolster peoples’ values, value, and outcomes.

Four key pillars that underpin value-based care

Those pillars are implementing a hybrid care model, attending to the drivers of health, deploying multidisciplinary care teams, and applying user-centered design principles.

Implement a hybrid care model. Just as consumers have gone omni-channel for sourcing goods and experiences, patients have grown to appreciate care delivered outside of the hospital and doctor’s office. This consumer-shift has crossed generations beyond younger digital natives: 65+ year old’s have embraced new life-flows ordering online, picking up in store or at the curb, and choosing home delivery for groceries and prescription drugs.

Hybrid care can deliver right-care, right-time, right-place when the right information helps determine that choice. Sometimes care is most appropriately delivered face-to-face, with patient and clinician in the same place, same time. Telehealth visits add to the hybrid care mix to continue to build the patient-clinician relationship, bolstering trust and health engagement. For people managing chronic conditions, asynchronous exchanges can effectively work to support peoples’ medication adherence and positive lifestyle choices.

Address the drivers of health. Those lifestyle choices are often constrained by peoples’ real-life barriers to factors that support well-being outside of medical care. Attending to these drivers of health fortifies patient outcomes by addressing upstream risks that can diminish a patient’s chances of dealing with a diagnosis. Take heart disease, where the opportunity for self-care at home is impactful: the role of food, exercise, tracking blood pressure, and linking to support sources online (including connecting with a care team) work together to tackle the aspects of heart disease amenable to personal behavior change.

Deploy interdisciplinary care teams: from head to toe to heart. Organizing care teams that embed primary care, mental health, physical therapy, health coaching, and care navigation supports better outcomes. It is common for patients diagnosed with a physical condition, whether acute or chronic, to have a co-morbidity of anxiety or depression. Baking mental health services into primary care helps integrate therapy into a treatment plan. Interdisciplinary teams can inspire patient satisfaction and engagement while driving productive work-flows for clinicians. When asked to re-imagine primary care, doctors told PwC their ideal primary care “dream team” would include a dietitian/nutritionist and a mental health professional, among other roles.

Apply user-centered (UX) and service design principles. ACSI’s latest data on customer satisfaction across industries found health care ranking in the bottom third of all industries – on par with social media, landline phone services, and the U.S. Postal Service. Health care UX design aspires for people to have positive experiences as they interact with services and products at every touchpoint in their patient journey.

As the ACSI data on customer satisfaction attests, health care as an industry falls short of meeting people-as-patients “where they are.” Without doing so, patient engagement erodes and with it, risks for good outcomes.

The ROI on trust in health care

Trust, authenticity and satisfaction are key factors for patients engaging in health care. Trust has a hard return-on-investment in driving patient outcomes: the research of Judith Hibbard demonstrated that patients with lower activation scores had poorer outcomes while generating higher costs. Another study from Altarum found that patients who felt disrespected in medical encounters had lower medication adherence, leading to poorer management of diabetes.

As employers, plan sponsors, medical groups, and health plans are all feeling the need to create real change, an inspiring example was introduced last week centered in better primary care access to achieve lower healthcare costs. The innovation behind this Aetna-Crossover Seattle pilot is something to keep an eye on.

Let’s remember this: people in the U.S. consistently view the most honest and ethical professions in America as nurses, physicians, and pharmacists. Value-based health care is best delivered through interdisciplinary teams via enchantingly-designed hybrid delivery platforms, embedding patients’ values in a social contract of mutual respect.

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About the Author

Jane Sarasohn-Kahn, MA, MHSA, is a health economist, communicator and trend weaver. Advising, writing and speaking, she focuses across the health/care ecosystem on consumers, health, technology, and policy. Learn more about Jane on her blog, Health Populi.

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Sources Linked

https://www.kff.org/report-section/ehbs-2022-section-1-cost-of-health-insurance/

https://www.nar.realtor/blogs/economists-outlook/housing-affordability-improved-in-august-2022-as-monthly-mortgage-payments-declined#:~:text=Nationally%2C%20mortgage%20rates%20were%20up,%2C%20an%20increase%20of%2043.7%25.

Graham came to be known as “the father of value investing.”

https://en.wikipedia.org/wiki/Benjamin_Graham

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5394371/#:~:text=Current%20fee%2Dfor%2Dservice%20(,for%20procedures%2C%20such%20as%20surgery.

https://www.commonwealthfund.org/publications/fund-reports/2021/aug/mirror-mirror-2021-reflecting-poorly

https://www.pcpcc.org/care-delivery-integration

https://scottshreeve.com/2009/04/06/the-geisinger-experience-realizing-the-health-value-vision/

https://www.definitivehc.com/resources/research/healthcare-staffing-shortage

https://www.washingtonpost.com/road-to-recovery/2021/01/21/baby-boombers-online-shopping-pandemic/