What is ‘value’ in healthcare and value-based imaging
As with any good or service, value is a function of quality and cost. Following this line of thinking, quality implies an improvement in patient outcomes, which can be translated into reducing the probability of negative events such as decreasing quality of life and increased morbidity or mortality. Quality of healthcare can also be measured through metrics such as accuracy of diagnosis, efficiency of the medical service or reduction of harm, for example in relation to imaging, exposure to radiation.
Value is connected directly with cost (e.g. cost of imaging procedures themselves). In the context of medical care, value-based imaging would imply that only approaches providing measurable value can be purchased. At the same time, it would imply growth in areas of proven value and reduction of testing in areas in which value is scarce, non-existent or unquantifiable.
Historically, healthcare services, including imaging were volume-based, fee-for-service, where each provider was paid for providing a service, without regard to performance. Rising health care costs, together with a growing percentage of uninsured patients, lack of easy access to affordable care, and rising medication costs, contributed to a shift in this paradigm, which has resulted in significant legislative developments starting March 2010, with the enactment of the Patient Protection and Affordable Care Act in the United States, referred to commonly as ‘Obamacare’. The PPACA provides bonus incentives for primary care services and drives funding towards preventive medicine and public health. Reimbursement is linked to the quality of care and Medicare payments are reduced for continuous hospital readmissions,hospital-acquired infections and conditions which could be easily prevented by the provider.
Imaging Departments & Bundled Payments – Key Milestones & Timeline
Since the inception of the PPACA commentators and thought leaders have highlighted radiology as a significant potential target for value-based imaging funding and specifically the growth in bundled payments around episodes of care.
Not least because of the fact that Imaging is a major driver of cost in the health care environment, due to its frequency of use, its significant capital investment and it’s high visibility as a cost centre.
In October 2013, the Center for Medicare & Medicaid Innovation (CMMI) launched the Bundled Payments for Care Improvement (BPCI) initiative. The BPCI initiative is comprised of four broadly defined models of care, which link payments for the multiple services beneficiaries receive during an episode of care. Under the initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care.
In April 2015, the Medicare Access and CHIP Reauthorization Act (MACRA) was signed, which established a new way to pay doctors who treat Medicare patients, revising the Balanced Budget Act of 1997, It fixed the way Medicare doctors are reimbursed, filled in a funding gap and extended a popular children’s insurance program, CHIP.
In July 2015, Centers for Medicare & Medicaid Services announced their proposal to mandate a 90-day bundled payment model as a new program for Medicare beneficiaries undergoing joint replacement called the Comprehensive Care for Joint Replacement initiative.
In April 2016, CMS published an initial proposed rule for MACRA, renaming it the Quality Payment Program (QPP) that will ultimately link a very large fraction of physicians’ Medicare payments to the quality and value of care.
In July 2016, CMS announced three new bundles called EPMs – Episode Payment Models; associated with cardiovascular care procedures including acute myocardial infarction (AMI), coronary artery bypass graft (CABG) and hip/femur fractures. These are due to be launched in July 2017.
In September 2016, The American College of Radiology published “A Radiologist’s Primer on Bundles and Care Episodes” which provided an overview of the expected changes in bundled health care payments and the impact on radiology services. The key points were:
- Bundled payments are among the most heavily emphasized approaches to aligning incentives and promoting care coordination, efficiency, and accountability in health care redesign. Because the radiologist is “ancillary” in many bundles, the specialty is often unaware of the phenomenon
- Radiology is pivotal in high-prevalence, high-impact care areas such as low back pain and stroke that are the focus of widely used system performance metrics.
- More important, radiology is central to the diagnosis and management of a wide range of important diagnostic issues in areas such as breast cancer, pulmonary nodules, and incidental findings.
- Three models of bundled care will impact radiology in the near future:
- Pure radiology bundles may be constructed for breast cancer screening and diagnosis, and these could be priced on the basis of guideline-based best-practice frequencies of care events such as recall and biopsy.
- Clinical bundles, for example low back pain, could be priced on the basis of optimal imaging frequencies.
- Pricing of imaging studies might include evidence-based frequencies of follow-up imaging for incidental findings.
Under MACRA, most radiologists will initially be paid through the Merit-Based Incentive Payment System (MIPS), which applies positive or negative adjustments to fee-for-service payments. The Quality Payment Program (QPP, 2016) links a very large fraction of physicians’ Medicare payments to the quality and value of care. Payment adjustments under MACRA will begin in 2019, although they will reflect performance during 2017.
The report also highlighted that in the future, many radiologists would be evaluated using measures not reflective of their practice. MIPS will provide special considerations for physicians with a limited degree of face-to-face patient interaction. However, many radiologists will be deemed ineligible for these special considerations and thus be evaluated based on performance categories beyond their control.
Implications For Imaging Departments
Imaging departments will need to be aware of and monitor new performance metrics and global providers of informatics and analytics solutions must provide their customers with the tools they need to do so and so support the evolution of imaging services.
In order to succeed in trading with the value currency, imaging providers will be in desperate need for more efficient means to measure and demonstrate the value of imaging service lines. These metrics will need to be comparative to other imaging, as well as non-imaging, alternatives which will be competing with value-based procedures along different care pathways.
Current Awareness And Attitudes To Value-Based Imaging
IDR Medical has recently consulted with our community of senior radiology and C-suite decision makers on the impact of the current and impending changes to funding.
Awareness of the impending changes is very high, across the community, but very low of detail and there is a limited understanding of what the impacts will be. There is also a lack of knowledge that the period for assessment begins this year (2017).
The primary response so far, for imaging departments and where current initiatives are focused, is not to understand new performance metrics and assess how to measure and excel in those metrics but to assume that the net effect is that incomes will reduce. Their response is to try to counteract those declining revenues, by increasing productivity and efficiency across the board, both in respect to Capex and Opex within their imaging departments.
Of course, their response is not incorrect and enhancing productivity is an excellent response, but a greater understanding of the factors which will modify their revenue and an ability to measure these and influence performance will create greater opportunity than efficiency alone.
Medical device manufacturers who clearly understand the implications of the new reimbursement models and can enable their customers to respond positively to these changes will be able to add significant value, confer major competitive advantage and in turn utilize these metrics to enhance their portfolios in response.
Although the developments highlighted are specific to the United States, all developed health care systems will shift towards outcomes-based payment and as such, the vast majority of the new performance metrics will have currency across global markets.
Graphics used in the article were created on the basis of: http://pubs.rsna.org/doi/full/10.1148/rg.2015140221