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The Value-Based Healthcare Model

December 13, 2016

Value-based Healthcare Model

Around 50,000 people flooded Chicago’s McCormick Place for the RSNA conference. Radiologists, radiation oncologists, medical physicists and other healthcare professionals from around the world hurried between sessions as far as a 15-minute hike apart. They still found the time to tour the 414,000 square foot Exhibit Halls where 667 companies brought imaging equipment, simulations, 3D printing machines and other marvels for display and demonstration.

Many of the conference sessions focused on the shift from fee-for-service to value-based medicine. This is not surprising, given the current turmoil in healthcare reimbursement. Notwithstanding the lack of a crystal ball, presenters did not think the new administration’s “repeal and replace” will have a resounding impact on this transformation. They believe that given our healthcare costs of 16.9% GDP, and the tangle of regulation that has led to our current morass, the fee-for-service model is  not sustainable. But exactly how radiologists will be compensated by CMS in the future – and how well – is still a big unknown.

In one session, Dr. Mike Modic, Chief Clinical Transformation Officer at Cleveland Clinic, offered a big picture vision for a future “medical home,” one where teams of professionals work in  Value-based Healthcare Modelintegrated, patient-focused synergy, with smart prescriptive and predictive tools at their fingertips. Reimbursement for services will be based on patient outcomes, so the community of healthcare providers focuses on preventative services, reducing hospital readmissions and making sure patients take their medications and come to follow-up appointments.

Contrast that with the fee-for-service model, where radiologists are reimbursed based on volume, seeing a mostly sick population. With the CMS payment structure  forcing closer scrutiny of test orders, as part of the move to “evidence-based appropriateness,” this has a damper on the number and type of test procedures done for this population. Hence the drop in physician income.

Dr. Modic says we can’t squeeze costs much more under current models. We need disruptive innovation to do so. Like Netflix taking the leap from mailing CDs to streaming, change will be of a different order altogether. Right now, for example, cathing someone for a suspected occlusion pays a higher fee than a lesser test, so there is an incentive to order that test. But in the future, when the model isn’t fee-for-service, radiology decisions won’t be tainted by financial considerations.  What is most appropriate will be the deciding factor.

The near-term outcome of this is reduced revenue to the radiologist. But the consensus is that the curve will bend back. A value-based medical home model  encourages a preventative, whole-person approach. If patient outcomes are the basis for reward, there will be more imaging procedures done for screening and early detection, bringing important business back to radiology.

Value-based medicine is not only upon us, but, Dr. Modic says, “it is the right thing to do.”

Throughout one session, physicians presented their stories of converting to a value-based practice. While it is complicated and requires having leaders with time to devote to the transformation, these presenters reported success. Their advice to colleagues? Take on the financial risk for patient outcome gradually. Leaping from fee-for-service to value-based practices is a culture shock that requires time and adjustment.



Margy Rockwood | Freelance Medical Writer

Rockwood Writes

Dublin, Ohio

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