VBHC - week 4

Question 1

value agenda

Answer 1

1. organize into integrated practice units
2. measure outcomes and costs for every patient
3. move to bundled payment for care cycles
4. integrate care delivery across separate facilities
5. expand excellent services across geography

Question 2

Why do we need payment reform?

Answer 2

• Financial incentives influence provider behavior
  o For example: providers who are payed fixed fees for every treatment/test are tempted to deliver more care
• Providers in position to influence demand

Question 3

Wat are disadvantages of fee-for-service?

Answer 3

• Currently, providers are largely paid through the method of fee-for-service (or some variant thereof)
• This method, however, is poorly aligned with value as it:
  o Rewards volume
• which could result in overtreatment and unnecessarily expensive care, and this is simply because providers are getting more salary if they provide more
  o Maintains fragmentation
• Coordinating care and making sure that the patient is getting the right treatment from the right specialist is not rewarding
  o Discourages prevention
• Providers would get less income if they would treat less people
  o Has no link with quality

Question 4

Bundled payment

Answer 4

A single, prospective payment per period for accepting accountability for the provision of a bundle of care services related to a condition

• Ideally covers the complete cycle of care (but rare in practice)
• Aggregates payments for separate services along 2 possible dimensions:
  1. Across time = providers accountability includes services they can place within an extended time window as compared to the current fee for service system.
  2. Across providers = these providers may be working in the same setting or in a different setting. In same setting it is for all the people working in the hospital that have worked fort his cycle of care. In a different setting it means that it is fort he hospitals and the rehabilitation clinic.

Question 5

Bundled payment – advantages

Answer 5

Stimulates involved providers to:
* Minimize costs for care covered by the payment
* Coordinate care well, realize seamless integrated care
* Improve quality by reducing harmful overtreatment
* Prevent complications (if part of bundle)

Question 6

Bundled payment – limitations/risks

Answer 6

• Unwarranted increase in the number of bundles to upset their financial risk or accountability for the individual bundles
  o Als ziekenhuizen een bundle krijgen voor een bepaalde operatie, dan zullen zij eerder een operatie uitvoeren dan dat ze medicijnen uitschrijven. Ook al is beide even effectief.
• Underutilization of necessary services
  o This could be countered by adding additional incentives for quality
• Risk selection (‘cherry picking’)
  o Providers try to attract patients with low expected costs for the condition in question
  o This could by countered by adjusting payment for different patient charasteristics
• Compartmentalization of patients into separate conditions
  o This is not good for the patients with multiple conditions

Question 7

Pay-for-performance

Answer 7

Explicit financial incentives for ‘good performance’ as measured by a set of predefined indicators
* Performance often operationalized as quality of care, usually measured using process indicators (≠ outcome!)
* P4P typically applied as relatively small add-on to existing payment structures (leaving incentives in those underlying payments intact)

Question 8

Pay-for-performance – advantages

Answer 8

• Theoretically and intuitively appealing
• May contribute to better care (if done well)
• May enable providers to invest in quality

Question 9

Pay-for-performance – limitations/risks

Answer 9

• ‘Performance’ difficult to measure (especially outcomes), so it may lead to only focusing on the performances that can be measured even though other unmeasurable performances are as important as the performances that can be measured
• Flawed incentives in underlying payment system left intact
  o Might not impact overall value
• Might lead to undesired strategic behavior
  o Select people where the changes are higher to score better on performances
  o Focusing on the performances that can be measured
  o Manipulating scores so that the scores look better than they are

Question 10

Hospitals value based purchasing

Answer 10

compares outcomes of hospitals for example morbidity, tries to correct for case mix so that the outcomes are comparable and then gives bonusses to hospitals that score better than average

Question 11

Hospital readmission reduction

Answer 11

looks at readmissions and it assumes that certain readmissions could have been avoided if good quality care had been provided.

Question 12

Hospital-acquired condition reduction

Answer 12

looks at infections and other hospital-acquired conditions that could have been prevented if there was a good quality of care.

Question 13

achievement points

Answer 13

How is your hospital doing compared to other hospitals?

Question 14

Pay-for-performance – design options

Answer 14

1. What to incentivize?
   * Which medical conditions and which indicators?
   * Who collects the required data, and how?
   * How to guarantee valid and reliable measurements?
2. Whom to incentivize?
   * Individual professionals or groups or organizations?
3. How to incentivize?
   * Using rewards or penalties (or both)?
   * How much to pay (as % of total income/revenue)?
   * How to translate indicator scores to payments?

Question 15

improvement goals

Answer 15

improve outcomes compared to outcomes from the same hospital earlier on

Question 16

how can improvement points and achievement points help

Answer 16

1. This ensures that hospitals that clearly outperform other hospitals are still stimulated to improve
2. Poor performing hospitals that are never as good as other hospitals are also stimulated to improve their performances

Question 17

Value based procurement

Answer 17

putting theory into daily practice of a health insurance company

Question 18

Why not pay just all health care bills?

Answer 18

The task of health care procurement is to guaranty access for our member to sufficient and high-quality health care within the financial mandate for our customers
 processing claims

Question 19

What is our main challenge when making choices?

Answer 19

Procurement is making complex choices
1. What kind of treatments to we contract?
o E.g. prostectomy
2. Which hospitals do we contract?
o Hospitals with a minimum of 30 procedures a year or Martini klinicum with > 300 per surgeon?
3. What price do we pay?
o Market average, average 10% best prices, integral price voor treatment and complications in first year?
4. How much budget do we give a hospital?
o Open volume, historic volume plus trend, 50% volume last year, no budget?

Question 20

The Fee for service payment model is common but…

Answer 20

• Stimulates volume
• Stimulates overtreatment
• Stimulates medicalisation of social/behavioral aspects of health
• Limits integral care
• Limits prevention
• Limit’s patient centered care and shared decision making

Question 21

Health care with value

Answer 21

appropriateness x (outcome / cost)

Question 22

Some parts of the care are excluded from the bundle
By looking at the segments, all relevant care is included in the bundle. For each product, we determine if it is:

Answer 22

1. In the bundle: all the care that is relevant in the patient journey. Payment is based on this care.
2. Influenced by the bundle: care that is seen as related to the bundle as avoidable complications. Shared savings are based on reducing these costs of care.
3. Outside the bundle: care that is excluded from the bundle because these complications are rare but extremely expensive to prevent cherry picking by HC providers