CSC: Value-based reimbursement requires value-based decisions by patients

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As the healthcare system abandons fee-for-service reimbursement models for the potential savings of value-based reimbursement models, IT services firm CSC suggested that incentives for patients and providers need to more closely resemble each other for the transition to work.

Because value-based reimbursement initiatives offering financial incentives to providers are already being unrolled, a December 2011 CSC report suggested that similar incentives be offered to patients for making wise healthcare decisions.

“Balancing provider-focused initiatives with coordinated programs that focus on patient behaviors and participation represents a significant opportunity to accelerate the value-based transformation of healthcare in the U.S.,” wrote Jordan Battani, a principal researcher for the Falls Church, Va.-headquartered firm. “Implementing thoughtful financial incentives for patients that promote patient engagement in wellness activities, compliance with treatment and medication regimens and managing chronic conditions should be coordinated with provider-focused payment and care delivery reforms already underway to maximize the potential of both."

The report warned that incentive programs for patients should not discourage them from utilizing cost-effective and preventive care services as other healthcare cost-saving experiments intended to shift the cost of healthcare to consumers, such as high-cost deductible plans, have.

The report additionally asserted that value-based insurance plans may prove to be a better alternative. “The underlying assumption [of value-based insurance plans] is that a combination of financial incentives to reduce or eliminate wasteful or unnecessary care can be combined with incentives to promote the use of effective and efficient care, and the combination of decreased utilization on one and increased utilization on the other will promote short-term savings, as well as long-term savings that will result from improvements in overall health,” Battani wrote.

Value-based insurance plans, according to Battani, would offer patients incentives for completing health risk assessments and for enrolling in smoking cessation, weight loss or disease management programs.

The report explained several incentives for use in value-based insurance plans designs:

  • Design-by-service incentives waive or reduce patients’ out-of-pocket costs for using low-cost, high-value services regardless of their need;
  • Design-by-condition incentives are similar to design-by-service incentives, but target a specific population afflicted with a particular condition;
  • Design-by-condition-severity incentives are a further refinement that offer stratified incentives within a target population of patients suffering from a specific condition who are expected to get additional value from particular interventions; and
  • Design-by-disease-management incentives place a high value on the benefits that targeted populations of patients achieve through participation in disease management programs.

Battani wrote that none of the reimbursement models currently being unrolled, such as the Medicare Shared Savings Program, have the power on their own to produce the types of transformative changes that healthcare stakeholders are looking for.

For value-based provider reimbursement models to work, Battani insisted that value-based innovation must also address the patient side of healthcare. “There are many challenges to this agenda,” she wrote. “The good news is that the required capabilities for the practice of accountable care delivery are generally understood. There are real-world organizations that are already successful at it, and the tools and technologies that support accountable care capability are available.  "The bad news is that the transformation roadmap for most organizations is a long and expensive one," she added.   

In lieu of value-based insurance plans, Battani concluded that healthcare insurers and payors should take steps to: 

  • Develop and refine requirements for value-based benefit administration;
  • Evaluate and inventory existing capability;
  • Develop a roadmap for operational and technology transformation; and
  • Select and implement enhancements to work processes and transaction systems.

The report is available in its entirety here.