Why Focus on the Money? How Value-Based Payments Shift the Focus
Value-based payments incentivize with money, but the focus is still on quality of care
THE VBP Blog
Subject Matter Expert Guest Author: Claire Ryder
Claire Ryder is the current Director of Business Development and Social Innovation for Resources for Human Development. Read Full Bio
Subject Matter Experts in our industry help guide, inform, and provide a solid foundation for growth. Here at the VBP blog, we believe these experts are vital to the community we are building. With that in mind, we have reached out to our network to write guest blogs. We will tap into their expertise on specific topics to help contribute to our reader’s knowledge and still provide an Advocate’s Perspective from the VBP team.
February 16, 2023 – At the RCPA Conference in October, there was a value-based presentation in nearly every timeslot. There was a helpful mix of provider and payer presentations. One question asked directly in one session by a provider CEO was, “why are we focusing on the money?” It is important to address this question because it comes up a lot, especially for non-profits that are used to being mission-driven and may have some discomfort with allowing money to drive their work.
There is an old phrase that many non-profits will be familiar with: No money, no mission. We all understand the need to bring in enough funds to be sustainable and provide good services, thereby fulfilling our mission. The value-based twist on this concept is: No outcomes, no income. While value-based payment (VBP) models aren’t quite that rigid, it’s a helpful way to think about our payment arrangements. Value-based arrangements pay us for getting the desired outcomes. They do not pay us for providing useless services.
Typing that phrase, “useless services,” I can imagine readers balking. “Our services aren’t useless!” I agree. I think our services are critical to the health of the broader population and a key factor in our society being able to function (imagine the ripple effects of no behavioral health services—tragic!). My confidence that our services aren’t useless is why I am such an advocate for value-based payments for behavioral health providers. The fee-for-service (FFS) model, while familiar and therefore comfortable, does not serve providers well. More importantly, it does not serve participants well either.
So, Why Are We Focusing on the Money?
The easiest answers to the question about focusing on money is two-fold. First, high-cost services are services we don’t want our participants to need, making money a good proxy for health. Second, resources are limited so we need to use our money efficiently.
Behavioral health is notoriously difficult to measure. There are tools for certain diagnoses such as depression, anxiety, trauma, and there are functional assessments. We also have clinician and participant self-reports that are more subjective. However, in general, it’s difficult to measure someone’s overall behavioral health reliably and consistently. Even when providers have internal metrics for doing this, they often don’t translate across the system. But we can all agree that higher cost services like psychiatric inpatient hospitalizations or residential detox are the types of care one would need if their behavioral health were extremely poor. Because of this, using the cost of someone’s services as a proxy for their health makes sense.
So, when we think about lowering cost of care, we aren’t talking about making a particular program cost less. We are talking about the overall cost of someone’s care being lower because they need fewer or less expensive (less acute) services—because they are healthier.
How Do We Lower Cost of Care Through Value-Based Payments?
A common misconception about the savings that we hope to see from moving the healthcare system to VBP is that the programs themselves will cost less. However, the lower costs won’t be seen in particular programs. In fact, program costs are likely to rise as we learn how much high-quality, effective care really costs. The savings will be in the overall cost of care for an individual. Their outpatient (OP) service might cost more but the overall cost of care will go down because the OP treatment is getting better outcomes, resulting in fewer hospital visits. One of the payers presenting at RCPA stated it even more strongly, “The goal is not necessarily to lower costs but to shift it to OP because people do better if they stay in OP over time.”
The second reason to focus on the money is because there is a limited amount. As behavioral health providers we feel that for ourselves, but it’s true for the larger health system as well. In 2020, healthcare costs made up almost 20% of the U.S. GDP while nearly half of U.S. adults can’t afford their health care costs, often going without needed care or prescriptions.
This suggests that we need a dramatic change in the way we spend money on healthcare. We cannot continue to pour money into a system that is not designed to meet the health needs of all citizens. We must adjust the system so that the billions of dollars spent are getting us the health outcomes we want for our participants and the outcomes that they deserve.
Value-Based Payments Shifting the Focus to Quality of Care
Changing our incentives from a focus on billing for services provided, as we have in the FFS model, to a focus on outcomes, as is done in VBP arrangements, is in fact reducing the focus on money. In the FFS model, staff and providers are incentivized to chase billing.
Participants who are easy to locate or reliably come to appointments often get more care than they need because billing quotas must be met, or the organization can’t continue its work. Participants who are harder to engage get less care than they need because engagement efforts aren’t billable under Medicaid. It is the billable units that are driving service delivery.
Under VBP, incentives are shifted so that staff and providers are incentivized to chase wellness and better health outcomes. The healthier we can get someone, the more money we make and the more services we are able to provide. The focus has always been about the money. True VBPs focus on the care, thus resulting in better outcomes that participants deserve.
Advocates Perspective
Healthcare providers need to make money to stay in operation. That is a fact. It is also a fact that fee-for-service billing incentivizes providers to chase billing, which puts less emphasis on health outcomes and quality of care. It is a common misconception that value-based payments shift the focus to money. Value-based payments shift the focus to improved quality of care by incentivizing providers to achieve better health outcomes. Value-based payments are not only good for providers, but they are good for participants who have long been receiving the wrong care at the wrong time. Realigning incentives to allow providers to focus on the care and health of their participants instead of being preoccupied with billing. Participants deserve for their healthcare providers to prioritize their health outcomes so they can get the right care at the right time.
Onward!
About the Subject Matter Expert Guest Author
Claire Ryder has worked in the behavioral health and human services field for fifteen years. She started her career as a crisis clinician and has experience in project management, managed care, and quality improvement. She currently works as the Director of Business Development and Social Innovation for Resources for Human Development (RHD). In addition to her internal responsibilities, she sits on several external committees including RCPA Mental Health Steering Committee, co-chair RCPA VBP Workgroup, City of Philadelphia Department of Public Health Taskforce on Community Resources, and founder and co-chair of The Alliance Social Determinants of Health Committee. Claire is working on her Doctorate of Health Sciences in Population Health at Thomas Jefferson University. Her focus is social determinants of health and implementation of value-based care/payment.
Subject Matter Experts in our industry help guide, inform, and provide a solid foundation for growth. Here at the VBP blog, we believe these experts are vital to the community we are building. With that in mind, we have reached out to our network to write guest blogs. We will tap into their expertise on specific topics to help contribute to our reader’s knowledge and still provide an Advocate’s Perspective from the VBP team.
Are you interested in writing a guest blog for the VBP blog? We would love to hear from you! Please reach out to mandy.sahhar@xtraglobex.com to start the conversation.