Central PA Medicine - Spring 2017 - 4

daup h i n cm s .org

From the Editor

Paying for

Value?

Heath Mackley, MD, FACRO
Central PA Medicine Editor-in-chief

facebook.com/dauphincms

Dauphin@pamedsoc.org

Dauphin County Medical Society
777 East Park Drive, PO Box 8820
Harrisburg, PA 17105

O

ur politicians, fond of catchphrases, have endorsed the latest
Medicare reform agenda as a
move from "volume to value."
But what is value? A health economist
will tell us that value can be quantified as
outcomes received per dollar spent. The
rest of us non-economists out there might
say that value is the usefulness, or worth of
something. So what value do we as physicians
bring, exactly? Most of us in medicine don't
think about value on a daily basis. We tend
to focus on doing the best we can, on each
patient encounter, every day. And as much as
we might be tempted to keep focusing on our
job and hope these new reforms don't disrupt
our ability to care for patients too much, I
think we need to understand how this affects
us. Furthermore, I think a rational focus
on value can be a positive force for change,
beyond patient care and reimbursement, by
giving us a paradigm to evaluate where we
need to be as a society, both on the county
and state (PAMED) level.
As stated previously, value is defined as
outcomes divided by cost. So all we have to
do is figure out what the outcomes and costs
are, and we've got it figured out, right? One
would think that cost should be the simple
part. If only that were true! One can't use
the prices hospitals and physicians charge,
as they aren't similar to what those entities
are paid. One could use what Medicare
pays, but Medicare pays different prices for
the same procedure based on a number of
factors, and the approved diagnoses for each
procedure differs significantly by region.
Furthermore, the process where Medicare
decides what it will pay for each procedure

4

Spring 2017 Central PA Medicine

is a highly-politicized process akin to a large
group of sharks fighting each other as they
devour an injured whale. In a rational world,
the cost to Medicare would be based on
the actual costs of delivering the procedure,
with a predetermined profit margin that is
uniform across specialties and doesn't favor
one group over another. But it is difficult to
see a way to achieve that goal with the system
as it now exists.
Defining the other half of our equation,
outcomes, is an even more precarious process
because the goal of creating a fair system
seems even more remote. From quantitative
subjective outcomes such as patient satisfaction scores, to objective outcomes that rely
on patient adherence, like hemoglobin A1c
levels, hospitals and physicians are forced
to focus on the processes that they control,
and then hope for the best. Undoubtedly,
there will be ways to game the new system,
just as the current set-up has ways to game
the system. Some physicians will embrace
this, but most will not, as physicians tend
to focus on trying to do the right thing by
the patient. In a rational world, outcomes
would not be used to reward or penalize
individual physicians, but would be used
to value procedures. For example, if one
procedure has a global satisfaction rate of
25% and another has a global satisfaction rate
of 90%, then giving a higher relative value
to the appreciated procedure will reflect the
collective will of the patients. If one drug
extends survival by one month, but another
drug extends survival by six months, in the
real world, providing differing reimbursement
would be logical. Again, it is difficult to see
a way to achieve a fair, transparent system.


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Table of Contents for the Digital Edition of Central PA Medicine - Spring 2017

Central PA Medicine - Spring 2017 - 1
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