Business Groups Call for Accelerating Value-Based Initiatives

The group that represents a host of Fortune 500 employers said a faster shift to value-based care is needed to drive innovation and vitalize the economy.

Value-based care is good for business—that’s the message from a national partnership of 2 leading business groups, the Pacific Business Group on Health (PBGH) and The ERISA Industry Committee, which today announced the DRIVE Health Initiative to promote faster adoption of value-based care.

DRIVE, which stands for Deliver Results, Innovation and Value for Everyone, includes several Fortune 500 companies, such as Boeing, Target, and Chevron, as well as leading institutions like Stanford University. The group sent a letter to President Donald J. Trump and HHS Secretary Tom Price, MD, calling for regulatory steps and market-based purchasing strategies, and submitted a policy proposal that the group said “will drive healthcare efficiency and effectiveness.”

“It is absolutely critical for the health of Americans and our economy that value-based care is quickly embedded in the healthcare system,” David Lansky, president and CEO of PBGH, said in a statement. “Policy makers must focus on what works to achieve these goals, and we know that value-based care helps to drive down costs and improve patient outcomes.”

The business leaders cited the fact that the United States outspends all other nations on healthcare without producing better results. After a period of slower annual increases, healthcare spending is growing at 5.6% a year, and CMS projects that healthcare spending will represent 19.9% of the gross domestic product by 2025.

According to the group’s statement, the historic reliance on fee-for-service payment is one culprit in the upward trajectory, as it is still used in “over 80% of healthcare transactions.”

Strategies like value-based payment, increased transparency, and greater consumer engagement have been shown to produce better quality care, the business groups say.

“The market based approach builds upon 20 years of innovation in payment, benefit design, and consumer engagement by the business community,” they say in the statement. “Value-based care ensures patients receive better care and can make more informed choices, providers are rewarded for achieving quality patient outcomes, purchasers are paying for what works, and businesses can invest in jobs and innovation.”

There have been mixed signals whether the Trump administration will move ahead with value-based initiatives. While some conservatives note that the vote for the Medicare Access and CHIP Reauthorization Act was overwhelming and supported by both parties, there are also statements from Price during his days as a Georgia congressman that mandatory value-based payment models were moving too quickly.

And last month HHS delayed the start date for a new cardiac bundled payment model and an expansion of a joint replacement model, after hospitals asked for more time. What’s more, there are signs Price may shift to a voluntary bundled payment model instead of a mandatary one.

The DRIVE initiative, and the policy blueprint, focus on 3 elements:

  • Consumer Engagement and Financial Incentives. These include better use of health savings accounts, which Trump and House Speaker Paul Ryan, R-Wisconsin, both support. The business groups also support lower cost-sharing for management of chronic diseases, which is a staple of the Affordable Care Act, and more flexible use of value-based care in Medicare.
  • Alternate Provider Payment Models. The business groups say they support “prospectively set payments for comprehensive bundles,” and incentives to encourage 2-sided risk, which has been slower to take hold among accountable care organizations. They also want to see broader use of telehealth, which is popular with patients but faces a host of institutional barriers.
  • Transparency and Performance Measures, including patient-reported and patient experience outcomes, and greater used of pooled data from a variety of sources. The groups also call for improvements in interoperability to promote better use of electronic health records.