Value Equation 2.0: Succeeding in the New Order of Value Driven Healthcare

Published Online:June 23, 2014
While the fee-for-service (FFS) reimbursement model has long been accepted as the standard model in healthcare, it must shift to one that focuses on value. Value-based reimbursement will encourage stakeholders to achieve the triple aim: improve patient experience, better manage population health, and reduce per-capita costs of healthcare so that patients receive more for the dollar spent, said Dan Sontupe, executive vice president, payer marketing & market access, The Cement Bloc.

In the FFS diabetes management world, formulary design focuses on 1 or 2 preferred brands. There is standard contracting, co-pay cards (which are great for patients and annoying for payers), and a one-size-fits-all approach to treatment algorithms. Often patient education was ineffective due to understaffed offices that lacked case managers. Uncoordinated care among providers resulted in 1 in 10 healthcare dollars being spent on treating diabetes. What’s more, without change, 21% of us population projected to have type 2 diabetes.

In a value-based type 2 diabetes management world, care aligns with the evolving value-based healthcare environment. Strategies focus on self -management, team- based collaborative care, and patient-centered care that meets an individual’s goals and needs. It also includes population health registries, proactive case managers and diabetes educations, and there will be open access to all medications.

This new value equation for type 2 diabetes includes better outcomes, lower costs, engaged patients, bundled payments, attainable quality measures, integrated hospital systems, and accountable care. With programs such as the Healthcare Effectiveness Data and Information Set (HEDIS), Physician Quality Reporting System (PQRS), and Medicare 5-star rating program, quality measures will become imperative for any healthcare organization. This is because value-based care calls for new or renewed tactics to reduce costs of care, manage side effects, and support a positive patient experience.

“Obtaining quality measures in type 2 diabetes is all about lowered costs, we can get there…by driving [value-based] programs and solutions,” said Mr Sontupe.

Diabetes is also not the only area of focus for manufacturers and provider. Oncology is also increasingly garnering interest in value-based care. Value-based cancer care means focusing more on just a patient’s survival – Mr Sontupe said  it’s about helping them survive with dignity, and knowing when it is no longer worth the cost or pain of administering expensive treatments. He added that  organizations will not activate stakeholders or expand their brand unless they implement strategies that build payer belief in their brand — much as Copernicus had to with his model of the universe.

“Just ‘another value proposition’ is not going to cut it. It’s not going to get you where you need to be, it’s not going to get your product where it needs to be. To move your organization you have to think bigger, said Mr Sontoupe.