Introduction

[00:00:02] Stacey Richter: Summer Short. "The Euphemism That Has Become Value-Based Care". Today, I am speaking with Elizabeth Mitchell. 

Challenges With Value-Based Care Implementation

[00:00:26] Stacey Richter: 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 Dr. Tom Lee, Dr. Scott Conard, Brian Klepper. 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. 

Hidden Costs and Lack of Transparency

[00:03:22] Stacey Richter: 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, in air quotes, 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 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 Dr. Paul Hinchey, 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 Dr. William Bestermann, 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.” 

Potential for Positive Change

[00:06:41] Stacey Richter: Okay, now. Let's reset. I'm going to 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.  Like, Jodilyn Owen talked about one of these in episode 421. Justina Lehman also, that's episode 414. 

We had Larry Bauer on the show 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. 

Interview With Elizabeth Mitchell

[00:08:51] Stacey Richter: 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 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 percent 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, "Copays 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. 

My name is Stacey Richter. This podcast is sponsored by Aventria Health Group. 

[00:10:36] Elizabeth Mitchell: Members are asking for, my members are asking for, and what most providers want are alternative payment models.

Not these value-based payment arrangements, which are still just fee for service based with a couple of quality incentives. That is not a meaningful payment reform. We are talking about prospective payment or bundles with warranties. Most health plans can't or won't administer those. If there is a TPA out there who can flexibly administer these alternative payment models that make it easier for providers to provide whole person integrated care, that is what employers are looking for. It shouldn't be as hard as it is. 

[00:11:17] Stacey Richter: And I think what you're saying also has another implication. I have heard so many Taft-Hartley plans or self-insured employees complaining about the value-based fees that they see on their invoices from their health plan. And most of them will point to those fees and say they are just a way to get more money out of me.

They're value based, but what value actually gets accrued? Just going back to the conversation where you said we're spending $350 billion and what are we getting for it? You've just explained one of the reasons for that, that if you have an administrator who's not good at administering value-based care, then as an employer, maybe you do look a little askance at value-based fees that are popping up here, because if you can't administer value, then what's it paying for, really?

[00:12:09] Elizabeth Mitchell: Yeah, we do not have value based care, right? We have a lot of PowerPoints, we've got a lot of sales materials. We do not have value in the U.S. healthcare system. I was on the LAN, CMS HCP LAN, years ago where we came up with these different levels of value-based payment models. 

That was at least a decade ago. And yet we have made almost no progress in truly scaling real alternative payment. And it's not about a shared savings with a quality measure thrown in. It is about fundamentally changing how providers are paid so that the barriers of fee for service are removed. 

How do you do effective primary care that includes integrated behavioral health, that includes social needs screening, and all the care that people should expect from an advanced primary care practice on a fee for service model where you get to spend maybe seven minutes with your patient and you know, you don't have the data you need and mental health is carved out and oh, here have a point solution for every other little condition, which actually should be part of primary care in the first place.

All these point solutions are just failures of primary care, but we have carved everything out, fragmented care, because that is how we pay for it. So, if we had a comprehensive payment for whole person care that enabled a primary care practice to do all the things that people need and expect, that would be a game changer. But very few plans are administering that and it is a major barrier to change. 

[00:14:00] Stacey Richter: How I'm thinking about what you just said here, or this is what I'm taking away. That if you're just thinking about what's going on in the middle of the operation, right? Like if you leave the entities in the middle to their own devices, you will never get value-based care because the very premise of value-based care is against the self-interest of those in the middle. Like, that's the ultimate impact, right? You want sick people. You don't want to prevent them from getting sick. 

[00:14:29] Elizabeth Mitchell: That is what employers want, that is what employees and families want, and yet that will reduce the amount of money going into the system. No one makes money in a fee for service system if people are healthy. 

[00:14:42] Stacey Richter: Exactly. Coupled with the problem currently with primary care and the way that it's paid for in a fee for service environment.

How primary care is viable in this day and age is that they refer to so many high priced specialty services that it's almost like a loss leader, right? Like these systems use it as a gateway to get people into, you know, more MRIs or whatever. And I'm being very cynical right now, but it's largely true, like people will say it.

So here we have a health system that's whole kind of like financial model is built on high priced services and PCPs being a funnel into those services as one part of the middle. Then you have the payers themselves who are very equipped to do fee for service only, you know, and this is a whole separate conversation, but they actually make more money when prices go up when the trend is high.

So I guess the point that I'm making is that if those on the either side of this equation, ie, those who are the ultimate purchasers, meaning employers, taxpayers, patients themselves, right, and the doctors who want to deliver better care. Those are the two on either side of that that have the self-interest and the inclination to actually provide care that is of value.

So unless those two get together, which is I think is what you're saying with the direct contracting, unless those two get together, if everything gets delegated to what's going on in the middle there, then value-based care is never going to work. What do you think of that?

[00:16:11] Elizabeth Mitchell: I think that's right. That said, if there are health plans out there who really innovate and actually offer alternative payment arrangements and pay more for what employers and employees value like mental health care, like maternity care, like primary care, that would be great. I think jumbo employers would be thrilled. In the absence of that, they will do it themselves because they have to, right? This is their money. 

Conclusion and Call to Action

[00:16:42] Elizabeth Mitchell: These are such important conversations in a really critical time to fix U.S. healthcare. I serve on the board of the Office of Healthcare Affordability in California, I was appointed by the governor, and we are tasked with actually helping create a more affordable healthcare system in California, and at every meeting, over 50 consumers come and literally beg us to do something.

These are hotel workers. These are carpenters. These are people who cannot afford their healthcare, telling stories about losing their jobs, losing their homes because of a hospital bill and not being able to access care in their own communities. So, if we think it is not at a crisis point, we are kidding ourselves.

We need to go listen to the people experiencing the impact of our inaction. That is the motivator that I am bringing to this. So many Americans are suffering. We are the wealthiest country in the world. We spend more on healthcare than literally anyone else. And working Americans cannot access high quality, affordable care. We have got to do something different. And if we break some glass in the process, well, I think it's worth it to meet their needs. 

[00:18:05] Stacey Richter: And I think that is the perfect note to end this show on. Elizabeth Mitchell, thank you so much for being on Relentless Health Value today. 

So let's talk about going over to our website and type in your email address in the box to get the weekly email about the show that has come out. Thanks so much for listening.