The “right way” to disrupt our healthcare system to ensure that it delivers value-based care and a healthy population for all

Thomas S. Campanella, President, Campanella Consulting, Inc., Professor Emeritus of Health Economics, Baldwin Wallace University 

Originally published: March 5, 2019 (updated November 2024)

Americans are mostly presented with an either-or choice when it comes to health policy decisions. If we want affordable healthcare, we must limit access to care (no Medicaid expansion, health insurance policies with minimal coverage, high-deductible insurance products that deprive care from poorer Americans, etc.): Conversely if we want greater access to care, we must accept increased deficit spending at the federal and state levels to support some of the following: ever-increasing individual health insurance subsidies to dampen the blow of escalating healthcare costs, out-of-control Medicare and Medicaid spending, etc.

Why can’t we focus our efforts on shaping our healthcare system to deliver value-based care which, in turn, will have a positive impact on access to care? Why can’t we get beyond the rhetoric and expedite the needed transition from a “sick-care” system to a true “health system.” Remember, healthy people are less costly people.

If we frame the societal and political debate around the dual goals of a health system that delivers value-based care and expedite the transition to a true “health system” for all, we may have different approaches to achieve those objectives, but at least we will have identified a common endpoint or destination.

First, we need to agree on a destination. Clearly, Republicans and Democrats in Congress can embrace the following two goals as a destination (if not, we are in more trouble than I thought – which sadly maybe the case):

1. A health system that delivers value-based care, and
2. The expeditious transition to a true “health” system for all which would positively impact population health vs. our current costly “sick-care” system

STOP OFF POINTS ALONG THE WAY TO OUR FINAL DESTINATION

Deep-diving a little further, Republicans and Democrats should mostly embrace and be in agreement on these stop-off points on the way to a health system that delivers value-based care and a healthy population for all. They must recognize the need for:

• Increased price and quality transparency and transitioning consumers & employers into prudent purchasers of healthcare services
• Increased engagement by consumers with their own health
• Increased choice for consumers
• Increased innovation in healthcare
•  An expedited transition from fee-for-service to risk/value-based reimbursement payment methodologies
• Increased interoperability of Electronic Medical Records
• The importance of increasing the number of primary care physicians and enhancing their role as the foundation for a true health system.
• Addressing social determinants of health in a proactive manner
•  Increased access to care, especially in long neglected rural America
• A recognition of the increasing financial challenges facing Medicare and Medicaid
• The importance of being “budget conscience” since there is “scarcity” of resources to address all of our societal needs (“opportunity costs”)

DO WE HAVE A ROADMAP TO A HEALTHIER SOCIETY?

Assuming we can get Republicans and Democrats to agree on the above noted stop-off points on the way to our end destination - a value-based “health” system for all Americans, we will have come a long way in developing a framework for success.

NOW, WHAT ABOUT THOSE POLITICALLY SENSITIVE BARRIERS?

To step away from the political tug-of-war that exists today, we must first divorce ourselves from the political rhetoric surrounding the Affordable Care Act (ACA). Rather than narrowly focusing on attacking or supporting the ACA, we need to redirect our attention and efforts to the end point/destination as noted above:

1.    A health system that delivers value-based care and,

2.    A healthy population for all

For us to complete our journey, we need to overlay any core healthcare programs, initiatives, or legislative actions by asking the question: Does this positively or negatively impact the above two societal healthcare related goals that allow us to reach our ultimate destination? 

In addition there must be a recognition that there is a scarcity of resources to address all of our societal needs (opportunity costs) and, as a result, it is critical that we implement such programs/initiatives in a cost-effective manner.

BUILDING A HEALTH SYSTEM THAT DELIVERS value-based care 

As I noted in my blog titled, “Choice and Competition”, while I am not a Trump supporter, I agree with the core premises surrounding the December 2018 report from the Department of Health & Human Services, titled, “Reforming America’s Healthcare System through Choice and Competition.”

I believe that a market-based system which is less bridled by regulations and fueled by engaged consumers and employers armed with increased transparency tools will spur innovation, cost-efficiencies, and value in the delivery of healthcare services.

This market-based positive disruption will be further aided by the growth of Medicare Advantage and Medicaid Managed/PACE plans, especially with regard to the utilization of risk/value-based payment methodologies, such as capitation vs. fee-for-service.

BUT A MARKET-BASED SYSTEM COULD NEGATIVELY IMPACT OUR OTHER END GOAL, "A HEALTHY POPULATION FOR ALL"?

A true market-based system would indeed have a negative impact on our second end goal, “a healthy population for all.”

Failures of a true market-based system include the following:

1. There would be less financial incentive to address the health needs of the poor in our society (return on investment, etc.).
2. There would be more focus on the delivery of value-based care in a cost-effective manner within a competitive environment in order to increase profits, and less on the overall health of the population. 

A societal role would be needed to address the above two failings. This does not mean we abandon the role of the market in creating a healthcare system that delivers value-based care, but it does mean that the government and other stakeholders would have a significant but focused role in addressing overall population health.

What key legislative or programmatic initiatives need to be implemented or maintained to address population health for all?

1. Medicaid expansion needs to occur in all states. Currently, there is wide variation in the percentage of uninsured individuals by state, primarily because of Medicaid expansion.

• While Medicaid expansion is a critical foundational step to a healthy population for all, one needs to recognize that Medicaid expansion will impose financial challenges on states. 
• States should be given the latitude to evaluate various alternatives to make their Medicaid program more cost-effective. 
• Some of these initiatives are very controversial, but states should have the opportunity to at least explore alternatives such as work requirements, co-pays, etc. 
• The criteria for evaluating these initiatives should focus on the impact it would have on population health. 
• While one may jump to the conclusion that any barrier to Medicaid would adversely impact population health, we also need to appreciate the value of the unemployed receiving job training and finding employment. One of the best social determinants of health for the affected person and their family is having a job at fair pay.
• We also need to recognize the value of Medicaid recipients taking increased ownership of their own and their family’s health.
• Do initiatives such as work requirements and co-pays accomplish these objectives? I am not sure, but states should at least explore these initiatives while adhering to certain national guidelines that would ensure abuses did not occur on the part of the state.

2.    Now is the time to take a step back and evaluate some of the various aspects of the Affordable Care Act. In evaluating the ACA, independent clinical and actuarial experts should play a key role in evaluating the positive impact of provisions on overall population health as well as the potentially negative impact on healthcare costs and related premiums. One aspect of the ACA that needs to be evaluated is minimum essential  coverage  benefits. We have sufficient data to objectively evaluate each of the essential benefits to determine, from a cost-benefit perspective, if they should continue to exist as is.

3.       Achieving a truly healthier society will also require individual engagement to this scenario. Sorry, consumers, you need to play a bigger role in achieving a happier and healthier storyline ending.

We should not have a mindset, albeit altruistically based, that leaves out personal responsibility for individuals’ own and their families' health. We cannot afford to have an entitled society, and we are doing individuals no favors by insulating them from their own bad lifestyle decisions.

Personal accountability also plays a critical role in the evolution of our payment systems to those that are risk/value-based. In this new world of provider accountability for good outcomes, patients play a critical role in their own health, and they need to actively collaborate with the providers of care to ensure that the best outcome happens.

This does not mean that we create an environment of penalties and sanctions that deprive people of needed care. We must foster an environment of consumer engagement through education (handholding in some cases) and understanding, especially for those populations that face financial, educational, or mental health barriers.

CONCLUDING COMMENTS:

I believe that the issues surrounding healthcare are too important to not seriously evaluate all potential solutions or ideas that could benefit our society. We cannot blindly follow an ideology (right or left) that limits our ability to have an open and honest discourse on opposing perspectives.

All Americans, along with employers, should demand the goals identified in this blog:

1.    A health system that delivers value-based care, and

2. The expeditious transition from our currently costly “sick-care” system to a true “health” system for all