Volume vs. value: The ongoing struggle


Healthcare organizations are caught between the gap of the volume model and the value model while trying to transition to the latter, American Hospital Association board Chairman and Presbyterian Healthcare Services CEO Jim Hinton recently told the New Mexico Hospital Association. 

The Affordable Care Act's stipulations push organizations to make smarter decisions about cost and effectiveness, leading to experimentation with approaches and payment systems, but the industry is still struggling through the evolution, reports the Albuquerque Journal.

"The challenge is to get everyone beating the value drum while still providing adequate and fair compensation to the people who deliver the care, because it is in no one's interest to drive healthcare providers out of business," writes columnist Winthrop Quigley.

One way to align interests is to get providers to share the financial risk of healthcare with providers. That, however, requires deep knowledge of the patient population being treated to do so effectively. While insurers have technology and actuarial expertise to make better predictions about patients' health costs, plus financial reserves to cover unexpected cases, providers do not, making them leery of accepting such risk. It's no surprise that only larger practices seem to be willing to consider risk-sharing, Quigley says.

In a recent issue brief, the Navigant Center for Healthcare Research and Policy Analysis concludes that the traditional model is here to stay, although it will continue to evolve, FierceHealthcare previously reported. Bundled payments integrated into a population health platform offer a way for accountable care organizations to create incentives so physician performance aligns with potential shared savings, Rich F. Bajner, Jr., director in the healthcare practice for Navigant Healthcare and one of the authors of the issue brief, told FierceHealthcare.

Meanwhile, an analysis of the financial and quality performance of ACOs joining the Medicare Shared Savings Program (MSSP) in 2012-2013 found that MSSP success doesn't necessarily equate to success in population health, even for ACOs that previously experienced success with risk-based payments.

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