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The mission of the Harvey L. Neiman Health Policy Institute® is to establish foundational evidence for health policy and radiology practice that promotes the effective and efficient use of health care resources and improves patient care.

March 12, 2015

What’s the Value of Value-Based Payments if We Can’t Measure Value?

Volume to value”. “Volume to value”.

It’s the mantra being chanted over and over again by payers, policy makers, and patients. It’s a laudable goal—one that I believe will ultimately be achievable—but one that raises more thorny questions than answers. What exactly is value? How do we measure it? And, what’s the best way to reward it?

Whether we like it or not, the value train has left the station. Get on it, or get run over.

The National Commission on Physician Payment Reform blames our current transaction-based reimbursement system for many of healthcare’s woes: “Our nation cannot control runaway medical spending without fundamentally changing how physicians are paid.” Their solution: do away with fee-for-service as we know it, and transition to new delivery and payment models by 2018. I personally don’t think that’s an achievable timetable, but the recommendations of this austere panel are gaining traction.

In a bold announcement earlier this year, Health and Human Services Secretary Sylvia Burwell echoed that message, and escalated the sense of urgency: “Our target is to have 30% of Medicare payments tied to quality or value…by the end of 2016, and 50% of payments by the end of 2018.” Those are awfully ambitious goals—particularly for a system that hasn’t yet agreed on reproducible and robust definitions of quality and value.

So, what is value? Quite simply, it’s quality divided by cost. We just need to improve quality and reduce cost—at the same time. Simple enough, right? No devils at all in those details.

How do we do that when we can’t even agree on what constitutes quality? In a study just published in Health Affairs looking at commonly used hospital ratings services, Austin et al found no concordance between those various rankings. Many hospitals rated as high performers by Leapfrog were rated as low performers by US News and World Report. And the same ratings variability extends to HealthGrades and Consumer Reports. And so, while the work of each of those ratings groups is laudable and individually defensible, who shall we believe? The cynical me, of course, wants my health system’s value-based payments decided by the group that rates us highest.

Rating individual physicians is equally difficult. Patient satisfaction is being touted as a key and historically overlooked metric, but it often correlates poorly with more widely accepted and objective measures of quality. And, medical imaging has more than its share of challenges. Right now, Medicare’s Physician Quality Reporting System is one of the few platforms rating radiologists nationwide. But, few radiologists are successfully participating. Perhaps more importantly, most radiologists (and non-radiologists alike) don’t think that those metrics have any meaningful impact on patient outcomes. But, it’s really the only system in place right now for quality-based physician payments.

So, should we just throw up our hands in despair? I think not. While a rigorous and robust definition of value remains elusive, the ongoing quest is a noble one—and one that will ultimately and iteratively bear fruit. But, waiting for legislators and regulators to alone offer solutions is not the way to go.

Real innovation will only come from the ground up—from doctors and nurses and patients, and everyone else in the trenches. Smart policy makers will listen carefully to those really in the know, and respond accordingly. Ultimately, the best definitions of value will come from invested and knowledgeable stakeholders committed to the belief that we can do better.


Richard Duszak, MD, FACR

Richard Duszak, MD, FACR

Richard Duszak, MD, is Affiliate Senior Research Fellow, Harvey L. Neiman Health Policy Institute, and Vice Chair for Health Policy and Practice, Department of Radiology and Imaging Sciences, Emory University School of Medicine. Follow him on Twitter @RichDuszak.