True outcomes are rarely measured, and most healthcare organizations instead limit their quality metrics to measurements of compliance with best practice guidelines or utilization of certain clinical processes that may or may not correlate with ultimate outcomes.
Cost has usually been viewed from the perspective of the payers. In recent years, however, there has been more and more scrutiny at all levels of the system on true costs of production. This focus stems from the fact that increases in overall healthcare expenses have led to more and more cost shifting, first from the payers to the providers through various types of managed care and now to the end user through the deployment of consumer-directed health plans,
The inquiry into costs is revealing many uncomfortable facts. The tremendous waste and inefficiency in the healthcare system is now being exposed on the front pages of both the New York Times and TIME magazine. Furthermore, hospitals and healthcare systems are not the only ones being called to task, and the profession of medicine is also being blamed for its contribution to the unacceptably high costs of healthcare. Even physician incomes are being challenged as reflecting non-value added expense that is being passed onto the increasingly intolerant consumer.
The recently launched “Choosing Wisely Initiative” of the American Board of Internal Medicine Foundation is one example of how physicians seem to be taking a small step forward in trying to correct this problem. Unfortunately, efforts like these, that are geared primarily towards reduced utilization of certain tests and procedures, target costs from which others in the system generate revenue and, often, significant profits. Unwinding this economy, where someone’s waste may be another’s gain, won’t be easy.
The Medical Group Management Association now reports that more than 50 percent of physicians are employed by organizations affiliated with hospital systems. For some specialties like cardiology, the percentage is closer to 75 percent. Obviously, this dramatic shift to hospital employment has much to do with a desire on the part of physicians to protect incomes threatened by falling reimbursements. The question then arises as to whether physicians will balk when hospitals, scouring their cost structures for unnecessary expenses, ask their employed physicians to subject their compensation, some of which surely reflects payments for overused, duplicative and unnecessary services, to accept lower salaries in order to enhance value production.
No financial models, yet proposed, will allow physician in private practice or employment arrangements to maintain the status quo and let others pay the price for reform while they take a free ride. That being said, the intangible rewards for physicians who are anxious to connect once again with those motivations that originally called them into the practice of medicine may make the financial sacrifices worth it and, in fact, lead many of them home to the value-based work environment they have long desired.
Practicing value-based medicine is attractive for those physicians who are looking for the chance to slow down the production treadmill and take more time with people, as opposed to patients. Most physicians are more interested in helping those in need achieve meaningful outcomes than scoring 100 percent on clinical process measures reports.
Unfortunately, creating a value-based practice environment will require a lot of physicians to think seriously about things they would rather ignore. They are more comfortable with an antibiotic prescription than an ethical prescription and more accepting of a business model than a moral construct. Nevertheless, the system will be better served if everyone thinks about their core values and asks whether one of them should be the optimization of value production. If the answer is yes, then the denominator in the value equation must be everyone’s responsibility, including the physicians.
Finally, the ethical construct from which the profession of medicine, and the healthcare industry overall, must approach a more rational system should be emphasized. For make no mistake, it was not unethical behavior, but instead, the insidious nature of the current incentives in the reimbursement system that led us to where we are today. However, it will be ethical behavior, manifest as some degree of self-sacrifice and “doing the right thing” that will get us out of this quagmire. A value-based business model will require us all to closely examine our core beliefs and determine if moving in this direction is really something we value.
Ellis Knight, MD, serves as senior vice president of Coker Group will lead its hospital operations and strategic services service line. Prior to joining Coker, Dr. Knight served as chief physician and clinical integration officer for Palmetto Health in Columbia, S.C. He has more than 30 years of experience in healthcare, which include multiple administrative/management responsibilities such as oversight of hospital service lines, management and oversight of Palmetto Health’s provider employed network and interface with the University of South Carolina faculty and medical school initiatives. In 2011 he led the development of and continued oversight of the Palmetto Health Quality Collaborative. He graduated from Stanford University with a BA degree in human biology and received his medical degree from the University of Oregon Health Science Center’s School of Medicine. He earned an MBA from the University of Massachusetts at Amherst.
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