Trying to make Cents out of Value Care

A series of commentaries helps outline the uncertain future with regard to ‘value-based care.’

  • NEJM 2013; 369: 2076-78
  • NEJM 2013; 369: 2079-81


  • Centers for Medicare and Medicaid Services (CMS)
  • Physician Value-Based Payment Modifier (PVBM)
  • Hospital Value-Based Purchasing (HVBP)
  • Affordable Care Act (ACA)
  • Physician Quality Reporting System (PQRS)


As part of the ACA’s attempt to bend the cost curve and improve quality simultaneously, PVBM seeks to financially reward physicians who provide high value cost-effective care to Medicare recipients.  For physicians, the maximum bonus is 2%.  Overall, the cost is neutral in the program as low-performing physicians are penalized.  In 2015, this incentive will roll out for physicians in groups of 100 or more and for all physicians by January 1, 2017.

For hospitals, similar to PVBM there is HVBP.  However, an important distinction is that hospitals have participated in the Hospital Inpatient Quality Reporting program for 9 years prior to the start of HVBP; over 90% of the roughly 3500 hospitals have participated in these quality measurements which serve as a lead-in to HVBP.

In contrast, less than 30% of eligible physicians actually report the analogous PQRS.  Unlike hospitals, for physicians a difference of 1-2% in reimbursement is “small change.”  The effort to report the data may be more costly than generating additional patient encounters.

What could go wrong?

“CMS cannot accurately measure any physician’s overall value, now or in the foreseeable future.”  As a result, physicians do not respect the quality measures (PQRS) –for good reason. Some examples:

  • “Primary care physicians manage 400 different conditions in a year, and 70 conditions account for 80% of their patient load. Yet a primary care physician currently reports on as few as three PQRS measures.”
  • For radiologists, because there are not measures of diagnostic accuracy,  PQRS measures exposure time to fluoroscopy.
  • For surgeons, because judgement of whether to do an operation and because the technical skill employed cannot be measured, PQRS measures adherence to antibiotic usage and anticoagulation prophylaxis.  While these are important, they do not reflect a surgeon’s value.

Other problems:

  • Current methods do not adequately address case-mix and patients’ severity of illness
  • Individual physician volumes are insufficient to apply most quality measures.
  • Many physician practices do not have the infrastructure to obtain the needed quality data
  • There are nearly 150 times as many physicians who bill Medicare as there are hospitals. Also, the physicians come from much more varied backgrounds, including  primary care, subspecialists, and surgical specialists.
  • How can one measure empathy, respect, and thoroughness?

What needs to happen?

  • New tools that more accurately measure value-based care will be needed.
  • To truly influence physician behavior, the incentives will need to be greater; this is likely to occur downstream which may be a stronger reason for physicians not to ignore these quality indicators.

Bottomline: For pediatric healthcare providers, the lessons from Medicare with regard to value-based care will be applied more broadly.  So, pay close attention.

Related link on Accountable Care Organizations (ACO):

Make Physicians Full Partners in Accountable Care Organizations 

Also Noted:

Meaningful-use deadline pushed back one year  

An excerpt:

The CMS is giving providers another year to show they’ve met the Stage 2 criteria of the federal government’s incentive program to encourage the adoption and meaningful use of electronic health records. That means the start of the next phase will be pushed back a year. 

Stage 2 will be extended through 2016 and Stage 3 won’t begin until at least fiscal year 2017 for hospitals and calendar year 2017 for physicians and other eligible professionals that have by then completed at least two years at Stage 2, the CMS said Friday. 

The latest extension parallels what the feds did with Stage 1, which was originally set to last two years but was lengthened by a year when it appeared the industry would be overstretched to build and get acclimated to systems capable of meeting the federal payment program’s more stringent Stage 2 criteria.

6 thoughts on “Trying to make Cents out of Value Care

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