Berwick on Incentivizing Health Care Value

Brian Klepper

AAFP (The American Academy of Family Physicians) News Now has an excellent interview with CMS Administrator Donald Berwick MD, in which Dr. Berwick describes his vision of more integrated and less fragmented health care delivery, and the changes in reimbursement incentives that will be required to get us there. An excerpt is below. Click the link above to read the entire piece. Worth your time.

Q. You also have talked about this being the era of health care delivery improvement. Can you explain that? 

A. Paying for value is an incentive. It is a motivation toward improvement. The underlying idea of improvement is that American health care, historically built in fragments, often cannot achieve for patients what it really wants to achieve. No one really wants that. Health delivery system reform refers to really reconfiguring care into much more seamless coordinated-care operations so that people, especially those with chronic illnesses, experience continuity of care over time and space.

So when patients come home from the hospital, there is a smooth handoff, and all the necessary information follows them. When they are seeing a specialist, that specialist is coordinating care with their primary care doctor.

In a fragmented payment system, it is so much harder to accomplish this. When payment is based on better integration, the result will be better integration of health care services. A delivery system redesign really means improving care for people when they are sick to ensure that they are safe and care is delivered according to science. And that includes improving seamless and coordinated care for patients — especially people with chronic illnesses. And then there is prevention, (including) a bigger investment in keeping people healthy, helping them to understand how to keep themselves healthy instead of waiting for illness to occur or reoccur, and educating people on how to prevent (illness). All of that involves design.

Q. You spoke briefly about the fee-for-service system. How do you feel about the AMA/Specialty Society Relative Value Scale Update Committee, or RUC?

A. The current fee-for-service framework gives CMS advice on how much work is involved in each particular procedure or service a doctor does in an encounter. How much energy does it take? How much work does it take to remove a wart or to do an appendectomy or to counsel a patient? That comes out of the fee-for-service environment. It means we are trying to figure out the production costs, the input costs.

When you think about a truly value-oriented health care system where we are paying more for outcomes and for excellence, then you would become less interested in paying piece-by-piece for the input costs. But in the fee-for-service system, we need to have a rational way to decide how much energy went into a particular service.

Q. Is the RUC a rational way to do that?

A. It is the way that is set up now. The RUC very carefully considers all the information it has and how much it takes to do a procedure.

Q. Will the RUC become less relevant with the shift to value-based health care?

A. As we shift to value-based health care, there are questions about how you measure value, how you assess outcomes, how much benefit a patient has gotten or how high the quality is. That becomes more and more salient, and the questions about exact input costs become a little less salient. This is a different kind of challenge. The challenge is to be able to accurately measure and assess health and outcomes of patients.

Q. What does that mean for the RUC, then?

A. The RUC’s job, as currently defined, is to assess the relative resource use for an input to get the work done. The RUC’s current assignment is not to assess outcomes.

Q. What role will family physicians play in the reformed health care system?

A. The heart of the matter with respect to reform in health care systems is to establish a seamless and coordinated care model, especially for people with chronic illness. If you look at how health care operates, primary care becomes more and more important in that realm because it is the patient’s home base. It is the base in care where plans can be made with patients and where care can be monitored.

What I know about a strengthened health care system is that primary care disciplines, including family practice, become a much more important focus, more centralized for patients to get proper help.

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