Why President-elect Trump Should Retain Value-based Health Care Solutions

Why President-elect Trump Should Retain Value-based Health Care Solutions

The author argues that “value-based health care”, improving health outcomes while retarding an increase in cost, is an overlooked benefit of the Affordable Care Act that President-elect Trump should retain as he considers the ‘repeal and replace’ of the controversial legislation.

President-elect Trump will have no option other than to dramatically revise the Affordable Care Act (ACA). Some argue against a complete repeal and replace, which he has often promised, predicting that it will evolve into a radical amendment. But certainly some modifications will have to be made even if only as a political imperative. The nomination and likely appointment of Representative Thomas Price, a persistent critic of the ACA, as Secretary of Health and Human Services makes this impactful change all the more certain.

Trump and Price: What to Expect

Mr. Trump has already shifted his position from wholesale repeal and replace to the consideration of retaining popular portions of the act. For example, in an interview with “60 Minutes” Mr. Trump suggested that the prohibition against denying coverage because of pre-existing conditions might remain. And in other interviews and speeches he has mentioned the importance of making pharmaceuticals available to patients, citing certain aspects of the ACA in those discussions. Mr. Trump’s website suggests a more thorough and thoughtful consideration of his next steps noting that, “ … problems with the U. S. health care system did not begin with – and will not end with – the repeal of the ACA”.  

Understandably, the economics of retaining portions of the act may prove difficult. The current plan relies on mandatory coverage to provide some economic relief for insurance plans by creating greater assurance that healthy individuals would be part of insurance pools. Mandatory coverage has been opposed consistently in Republican positions concerning the ACA.  However, this coverage, as effective as it might be, is only one economic tool to employ in the next discussion of federal health care policy.

Representative Price’s position is much better defined as he is one of the few critics who has offered a specific replacement plan, entitled the “Empowering Patients First Act”. Among the provisions included are: creating tax credits for individuals to buy insurance plans, defining incentives for individuals to create health savings accounts, providing grants to insurance companies that accept high risk populations, and allowing businesses and commonwealth organizations to develop association health plans.

Critics are apprehensive of Mr. Price, though, indicating that as a former orthopedic surgeon he is influenced by his success with fee-for-service (FFS) reimbursement. Under this approach, physicians are reimbursed for specific visits, actions, and procedures based on rate plans set by the federal government and private insurers. This allows surgeons, among others, to benefit from high rates of reimbursement for their often complex and expensive procedures. There is no evidence that this in itself is problematic. Rather, the concern is that Mr. Price will naturally view these particular issues through a FFS lens that will result in a focus on physicians rather than patients. In “Volume to Value” (Frontiers of Health Services Management, Volume 29, Number 4, Summer 2013), William Leaver argues that fee-for-service has driven volume without evidence of quality outcomes and has resulted in a small number of chronically ill patients occupying more than half of total health care expense.

The Need for Change

The argument for change in the national health care system attracts vast participation and for good reason. Reports consistently show the U.S. easily topping the list of amount spent per capita on health care. As the fourth richest country in the world (the U.S. ranks behind Switzerland, New Zealand and Australia), the leading rank is not entirely surprising or even problematic in itself, however the high spending level is not returning equivalent results as the U.S. achieves less than first place, fifth place and even tenth place in positive outcomes, depending on criteria.  

Unequal access to care, the burden of the uninsured, disparities in attention to personal health, gender differences in clinical programs, drug pricing, and gaps allegedly imposed by for-profit insurance companies are all legitimate issues well recognized by the majority as significant instigators of the imbalance and issues that need to be addressed.

One pressing case for a change in the health care delivery system is implied in the emerging consensus about relative determinants of our health. A highly reputable study (“The Relative Contribution of Multiple Determinants to Health Outcomes”; Health Policy Brief, Health Affairs, Robert Wood Johnson Foundation, August, 21, 2014) reviews several research studies regarding the relative weight of contributors to the overall health of the population. Two of the cited studies, B. Booske et al., (“Different Perspectives for Assigning Weights to Determinants of Health,”; County Health Rankings Working Paper,Madison (WI): University of Wisconsin Population Health Institute, 2010d) and J.M. McGinnis et al. ( “The Case for More Active Policy Attention of Health Promotion,” Health Affairs 21, no. 2 (2002):78–93) are typical. Their estimates of the relative impact on overall health of the various determining factors are:

                                                                                                                                  Booske         McGinnis

  • Individual Behaviors                                                                                      30%                     40%

          personal choices such as diet, exercise, nicotine use

  • Social Circumstance                                                                                       40%                      15%

          poverty, homelessness, regional crime rates

  • Environment                                                                                                      10%                       5%

          air and water quality

  • Genetics                                                                                                                NA                        30%

          inherited make-up of individual body

  • Medical Care                                                                                                     20%                       10%

          interaction with care providers

Determined specifically in these two studies, and generally upheld in the other studies reviewed, is that the interactions between individuals and care providers (physicians, dentists, nurses, hospital personnel) account for between 10% and 20% of individual health outcomes. In other words, while we spend our health care dollars on providers, procedures, pharmaceuticals, and short-term and long-term care facilities, the impact of that expense accounts for less than a quarter of health outcomes.

A related case for change is implied in the nature of the vast majority of interactions between individuals and the health provider community. A study by the Agency for Health Care Research and Quality, a division of the U.S. Department of Health and Human Services (STATISTICAL BRIEF #396: National Health Care Expenses in the U.S. Civilian Noninstitutionalized Population, 2010), reported that 65% of national health care expenditures are accrued in hospitals, emergency rooms and pharmacies – visits typically required after symptoms arise. Further, the report notes that 73% of all health care expenses occur after age 65. This should be expected, of course, as older citizens do require additional care. However, this statistic is further evidence that we are not directing our health care dollars towards prevention.

These statistics show us that the current practice of health care, as sophisticated as it may be, is proportionately less important than several other factors. Interactions between care providers and patients occur to a great extent in latter stages in life when, presumably, the ability to impact the outcome is less, and health care dollars are spent after symptoms are evidenced as opposed to before symptoms occur.

This is not to say that the flaws in the U.S. health system lay at the door of your physician. S/he has been trained in a society of secular scientists and evidence-based clinicians that have produced the finest tests, treatments, pharmaceuticals and procedures in the history of the planet. Further, issues of social circumstance and environment are well beyond their influence as physicians, and individual behavior choices are ultimately in the hands of the patient. The studies do suggest, however, that s/he practices in a system that historically applies its skills to a great degree in areas other than many of the factors that largely determine our health. The problem is clear. The approach to solving it, on the other hand, is often and hotly debated.

Value-based Solutions: The Triple Aim

One aspect of the Affordable Care Act that has not received much analysis or discourse is that of providing incentives for physicians to achieve the “Triple Aim”: improved individual health outcomes, improved population health outcomes, slowed pace of growth in health care costs.  Proposals and programs that advance healthy outcomes while reducing costs are generally referred to as value-based plans. One such program of the ACA developed Accountable Care Organizations (ACOs) that allow physicians and groups with 5,000 or more Medicare patients to track the extent to which they meet specific criteria for patient interactions and health savings.  

It is worth noting that Representative Price has railed against these kinds of provisions (and, indirectly, against ACOs), calling them unwarranted “demonstration projects”, interfering in the “clinical decision-making process” that belongs to the domain of the physician and the patient.

The question that value-based health care tries to answer is how to best incent changes in the interactions between patient and provider that engage the latter’s considerable expertise earlier in life, prior to the evidence of advanced symptoms, and in ways that might impact the determinants of an individual’s health. To date ACOs have deployed several approaches including:

  • Reducing hospital readmissions by focusing on those patients statistically more likely to be repeatedly hospitalized, such as schizophrenics.
  • Increasing focus on treatment options for high-cost patients
  • Maximizing the utilization of the licensed capabilities for low-cost providers (i.e. assigning tasks efficiently between and among medical assistants, nurses, physicians)
  • Increasing coordination among providers such as sharing data and avoiding duplicate testing
  • Using data to identify low-cost, high-value clinical specialists

Additionally, a key element of the value-based approach is the empowerment of the primary care physician. Over the past twenty years the economics of medical education and physician practice have resulted in fewer graduates choosing to pursue internal medicine or family practice. This is a significant concern as these providers are the foundation of the health care system; they treat the whole patient on an ongoing basis and are the point of entry for preventive care.  

In “The Decline of Primary Care: The Silent Crisis Undermining U.S. Health Care” (Physicians for a National Health Care Program; August, 2011) John Geyman, M.D. notes that in most developed nations primary care physicians make up 50% of the physician population. Prior to World War II, primary care physicians accounted for 60% of all physicians in the U.S. In 2010 that number was reduced to 30%. Furthermore, today only 20% of medical school graduates intend to pursue primary care as their professional field. This occurs in great part because the fee-for-service system of reimbursement favors specialists. Treating the patient after symptoms have evidenced, often later in life, is much more profitable than prevention. Upon graduating medical school, a physician can choose this more lucrative field of study, often with additional time in study or apprenticeship that is easily recouped in early stages of practice.

The Hope for Change

Fortunately, there are technologies and methods in place already to achieve the goals of the value-based approach. At AffiniCorp, for example, we have assembled a menu of services designed to assist the physician along this course. Among these are:

  • Annual Wellness Visits: extended annual consultation designed specifically to identify and measure predictive factors that can result in early interventions and preventive treatments and procedures, increasing the likelihood of better health and reduced costs. These visits can be performed in great part by a care provider other than the physician and are currently reimbursed at rates greater than the traditional “annual check-up”.
  • Pharmacogenetics: genetic tests that predict the right drug at the right dose at the right time. The tests will increase the likelihood that patients avoid adverse drug reactions (now the 4th leading cause of death in the nation), that the right drug is prescribed, and the best therapeutic outcome is achieved. Many of these tests are paid by Medicare, Medicaid and certain private payors.
  • Chronic Care Management: education, training, and interventions that occur in advance of the development of a disease state, i.e. smoking cessation for lung disease, diet and exercise for diabetes. Chronic care management treatments are currently reimbursed by government and private insurers.
  • Transitional Care: taking the most current data on causes of hospital readmission and deploying tactics that reduce the chances of readmission.
  • Telehealth: previously and widely used to bring specialists to underserved areas, telehealth now has a measured capacity to substitute for outpatient visits, deploy chronic care management applications, bring rehabilitation practices to the patient at home, and reduce emergency room use. Telehealth continues to create additional access to care providers for the infirmed, elderly and rural patient. Forty-two states require private payor parity with their Medicaid plans that do reimburse at least some forms of telehealth.
  • Data Mining: the capacity to review patient history in electronic health records and claims data from insurers in order to proactively identify patients that will benefit from specific interventions earlier in their lives, before symptoms are evident.

These are a just few of the services Affinicorp provides, and more are added daily. In their entirety they produce better interactions between providers and patients, early and preventive care, and a more aggressive challenge to unnecessary costs such as re-hospitalization.

Value-based approaches, including the ACO, offer an opportunity for the physician to be rewarded for reducing the cost of care while maintaining positive health outcomes for individuals and populations. Utilizing the predictive and preventive protocols and applications, the physician can also achieve improved financial outcomes for themselves and their patients. Certainly the need for emergency care, advanced procedures, hospitalization, and extended care will remain.  It is likely that these procedures will be paid with some variation of fee-based reimbursement. Further, the use of pharmaceuticals will naturally continue, and the cost and pace to bring these drugs to market will not be managed by value-based care.

Those of us promoting value-based care should not ignore that ACO implementation has often been difficult and flawed. The program is bound up in bureaucratic and regulatory tangles, and the data management requirements are not normally within the capacity of the average physician and their practice. Data and subsequent reimbursement follows one and two years behind. Often there are investment costs for physicians and practices that are not quickly recovered and are further exacerbated by the lag in reimbursement flow. Additionally, there are no clear and effective incentives for patients to change their behaviors.

To date less than one-third of the practices that enrolled in the ACO program have seen financial benefits. Cornerstone Health Group in High Point, North Carolina learned this fatefully when they experienced an exodus of doctors, and other crises, due to hospitals and doctors loyalty to the fee-for-service model. (Abelson, R. 2016, Dec. 23. “Cornerstone: The Rise and Fall of a Health Care Experiment”. The New York Times. Retrieved from www.nytimes.com/2016/12/23/business/cornerstone-the-rise-and-fall-of-a-health-care-experiment.html?_r=1)

Nevertheless, President-elect Trump and his announced appointee for Health and Human Services Secretary, Thomas Price, should consider retaining value-based approaches as they determine the replace program for the Affordable Care Act. This will not solve all of the issues in the U.S. health care system but it will go a long way to achieving the Triple Aim – improved individual health outcomes, improved population health outcomes, slowed pace of growth in health care expenditures.

Eugene Gilchrist, Ph.D. is the Chief Executive Officer of AffiniCorp, a Louisville based health care solutions company focused on helping physicians and health systems achieve the Triple Aim.