Value-based Healthcare Does NOT Reduce Medicare Spending

The blog of the Congressional Budget Office (CBO) announced yesterday that 30 years of Medicare demonstration projects have failed to show Medicare how to reduce healthcare spending in a Fee-for-Service environment.

The Issue Brief from the CBO describes two thirty-year initiatives:

1. "Disease management and care coordination demonstrations have sought to improve the quality of care of beneficiaries with chronic illnesses and those whose health care is expected to be particularly costly.



2. Value-based payment demonstrations have given health care providers financial incentives to improve the quality and efficiency of care rather than payments based strictly on the volume and intensity of services delivered."

Physical Therapy in a Value-Based Healthcare World by Dr. Julie Fritz in the January Journal of Orthopedic and Sports Physical Therapy (JOSPT) discusses three challenges physical therapists face in delivering care in a value-based environment:

1. Multi-disciplinary care processes where the outcomes are NOT determined by one specialty or professional. These processes may have long time horizons - such as recovery from a stroke.
2. Lack of functional outcomes measurement relevant to the patient.
3. Provider payments that encourage greater volume of services than necessary.

Bob Laszewski's perspective at the Health Care Policy and Marketplace Review is that Almost Nothing Works to slow the growth rate of Medicare spending.

Laszewski goes on to question assumptions about Medicare Accountable Care Organizations (ACO) and whether they can slow cost growth by putting providers at risk for failure to achieve improvements in population health, like average blood sugar (HbA1c) levels for a whole group of people.

However, there are examples of value-based purchasing and disease management programs that DO work: they seem to return 3-for-1 in financial terms and they generate great patient satisfaction scores.

Except, they aren't run by the government.

Large private employers, like Toyota Motors and Perdue Farms, are BUILDING their own healthcare systems.

These private firms are improving health outcomes.

They save money.

And, patients like their healthcare.

Physical therapists in private practice can prepare for value-based purchasing by reaching out to private employers - find out what they want and figure out how we can bring it to them at a cost they can afford.

Value-based purchasing and healthcare reform is too big a problem, and too big of an opportunity, to leave to the government.

They'll just mess it up.