Patient Must Come First in Value Based Care

This video provides an in-depth exploration of Value-Based Care (VBC) and the critical, often overlooked, imperative to prioritize the patient within this evolving healthcare model. Dr. Eric Bricker of AHealthcareZ discusses an article by Dr. Sachin Jain, CEO of SCAN Health, a non-profit Medicare Advantage plan, who brings extensive experience from government, major carriers, and direct patient care. The video establishes that while VBC is frequently praised in theory, its practical implementation often reverts to cost-containment strategies reminiscent of past managed care models, potentially sidelining patient well-being.

The core of the discussion revolves around Michael Porter's value equation—quality divided by cost—and how VBC aims to increase quality while decreasing cost. However, Dr. Jain's enumerated seven tenets of VBC reveal a more complex reality. These tenets include stringent management of inpatient bed-days, mandatory specialist referrals requiring prior authorization, the use of narrow networks that may prioritize cost over specialist quality, and team-based care that can introduce additional gatekeepers before a patient sees a physician. Furthermore, VBC often involves low-cost formularies that limit access to newer, potentially expensive medications, an emphasis on addressing social determinants of health (though without robust population-level evidence of effectiveness), and ultimately, a focus on the VBC plan's own revenue and bottom line.

Dr. Bricker highlights the striking similarities between these VBC tenets and the much-criticized HMO models of the 1990s, which faced significant backlash for failing to put patients first. To counteract this tendency and genuinely embed patient-centricity into VBC, Dr. Bricker proposes three structural and incentive-based solutions. These include placing physicians on salary with transparent variable compensation to remove financial incentives for delivering more or less care, establishing a third-party ombudsman or rapid response team (RRT) hotline for patients and healthcare staff to report issues of denied care or bureaucratic hurdles, and mandating that all professionals involved in designing or administering VBC plans (from doctors to politicians) must themselves be enrolled in a VBC insurance plan. These suggestions emphasize transparency and accountability, drawing parallels to the "sunlight is the best disinfectant" principle and Toyota's quality improvement process where any assembly line worker can halt production to address a problem.

Key Takeaways:

• Value-Based Care (VBC) Definition: VBC is theoretically defined by the value equation: Quality divided by Cost. The goal is to improve patient outcomes (quality) while reducing healthcare expenditures (cost).
• Practical Tenets of VBC: Dr. Sachin Jain outlines seven practical tenets of VBC, which often prioritize cost control: managing inpatient bed-days, requiring specialist referrals, utilizing narrow networks, implementing team-based care, employing low-cost formularies, addressing social determinants of health, and focusing on the VBC plan's revenue.
• Cost Containment Strategies: VBC models often involve aggressive strategies to reduce costs, such as minimizing hospital stays, requiring prior authorizations for specialist visits, and restricting choices of providers through narrow networks, which can sometimes override quality considerations.
• Gatekeeping in Care Delivery: Team-based care, while beneficial in some aspects, can also create additional layers of gatekeepers (e.g., nurse practitioners before PCPs, PCPs before specialists), potentially delaying or complicating patient access to specialized care.
• Impact on Pharmaceutical Access: Low-cost formularies are a critical component of VBC, limiting patient access to newer, often more expensive, medications. This directly impacts pharmaceutical companies' market access strategies and patient treatment options.
• Social Determinants of Health (SDOH): While addressing SDOH is a VBC tenet, the video notes a lack of population-level studies proving its effectiveness, though individual cases (like providing a refrigerator for insulin storage) demonstrate its potential impact.
• Historical Parallels to HMOs: The speaker draws a strong comparison between the current practical implementation of VBC and the much-criticized Health Maintenance Organizations (HMOs) of the 1990s, which faced backlash for not prioritizing patients.
• Ethical Imperative of Patient-First: The fundamental ethical principle of "the patient comes first," ingrained in medical education, must serve as the guiding framework for all VBC strategies to prevent a repeat of past managed care failures.
• Physician Compensation Reform: A proposed solution involves putting physicians on salary with transparent variable compensation. This aims to remove financial incentives that might lead doctors to provide either too much or too little care, allowing clinical judgment to be paramount.
• Third-Party Ombudsman for Accountability: Implementing a third-party ombudsman or a "rapid response team" (RRT) hotline allows patients, doctors, and other healthcare team members to report issues like denied care, bureaucratic hurdles, or lack of access, fostering transparency and external scrutiny.
• "Eat Your Own Cooking" Principle: A key recommendation is that all individuals involved in designing, administering, or regulating VBC (including doctors, administrators, insurance employees, and government officials) should be enrolled in VBC insurance plans themselves. This ensures they experience the system firsthand and are incentivized to create a patient-centric model.
• Transparency as a Disinfectant: The overarching theme for proposed solutions is transparency, echoing Louis Brandeis's sentiment that "sunlight is the best disinfectant." Openness about compensation structures and avenues for reporting issues can drive accountability and patient-centricity.

Key Concepts:

• Value-Based Care (VBC): A healthcare delivery model where providers are paid based on patient health outcomes, rather than the volume of services provided.
• Value Equation (Quality / Cost): A framework, popularized by Michael Porter, for defining value in healthcare as the health outcomes achieved per dollar spent.
• Medicare Advantage Plan: A type of Medicare health plan offered by a private company that contracts with Medicare to provide all your Part A and Part B benefits.
• Formulary: A list of prescription drugs covered by a health insurance plan. "Low-cost formularies" typically prioritize generic or less expensive brand-name drugs.
• Narrow Network: A health insurance plan that restricts patients to a limited number of doctors and hospitals, often to control costs.
• Social Determinants of Health (SDOH): Non-medical factors that influence health outcomes, such as socioeconomic status, education, neighborhood and physical environment, employment, and social support networks.
• Rapid Response Team (RRT): A team of healthcare professionals in hospitals who respond to patients whose condition is deteriorating, before a full cardiac arrest or respiratory failure occurs. The video suggests an outpatient version for VBC issues.
• Ombudsman: An official appointed to investigate individuals' complaints against maladministration, especially that of public authorities.
• Fee-for-service: A payment model where providers are paid for each service they perform (e.g., office visit, test, procedure).

Examples/Case Studies:

• SCAN Health: Dr. Sachin Jain's non-profit Medicare Advantage plan in Southern California, serving as a real-world example of a VBC organization.
• Diabetic Patient and Refrigerator: An example of addressing a social determinant of health where Dr. Jain's health plan purchased a refrigerator for a diabetic patient to properly store insulin.
• 1990s HMOs: The video frequently references the historical backlash against HMOs in the 1990s due to their cost-cutting measures leading to patient dissatisfaction, drawing a parallel to current VBC practices.
• Toyota Quality Improvement Process: The analogy of Toyota's "Andon cord" system, where any worker can stop the assembly line to address a quality issue, is used to illustrate the concept of a rapid response team or ombudsman in VBC.