Patient-Centered Medical Homes and V-BID: A Highly Synergistic Approach to Achieve More Health for the Money

The past several decades have produced remarkable technological and therapeutic innovations in the prevention and treatment of disease resulting in impressive reductions in morbidity and mortality.  These enhanced clinical outcomes coincide with a time of significant stress within our healthcare system – namely with the burden of costs of care.  Although expenditure growth is the principle driving force behind health care reform, concerns remain regarding access to, and quality of, medical services.  The challenge, therefore, is to enable continued improvements in care while containing expenditure growth. Unfortunately, few reform initiatives simultaneously address the issues of quality improvement and cost containment.  As a result, “value” –the clinical benefit achieved for the money spent–is frequently excluded from the dialogue on how to manage spending.

Currently popular payment reform initiatives such as global payments and accountable care organizations shift financial risks to health systems and clinicians.  These cost-containment strategies infrequently address consumer behavior.  The alignment of clinical and financial goals for providers and patients will likely mean faster achievement of system objectives of enhanced access, enhanced quality and slower cost growth.  Patient Centered Medical Homes (PCMH) and Value-Based Insurance Design (V-BID) are two widely discussed innovations in health reform, yet the quality enhancing and cost containment potential of combining these ideas is rarely considered.  Abandoning fee for service payment systems and cost-sharing strategies that raise prices for patients across the board, “clinically nuanced” reimbursements that provide strong quality incentives for providers, and benefit designs that incentivize beneficiaries to use high-value health services can improve health and productivity, and potentially lower long-run health care costs.

The PCMH model is a supply-side mechanism to enable clinicians to deliver better-quality care more efficiently.  The PCMH model is not a quality improvement initiative per se, but rather a framework and platform that helps practices organize operaons and continuously improve care.  The PCMH fosters relationships between patients and providers, improves access and incorporates office processes and payment systems to reward an ongoing physician-patient relationship and high-quality, coordinated care. Through better information management, use of guidelines and coordinated care, the PCMH may contribute to better quality, which in turn drives cost reductions through avoided hospitalizations and emergency department visits.  Incentives are arranged so that doctors are compensated for the additional time and resources needed to intensively manage patient care.

V-BID seeks to enhance patients’ clinical outcomes and contain health care cost growth by changing demand-side (patient) incentives.  The basic premise of V-BID is to remove barriers to essential, high-value health services.  Using a “clinically nuanced” approach, patients assume an out-of -pocket cost proportional to the clinical value – rather than the price – of a given service.  In doing so, V-BID incorporates available evidence regarding the clinical benefit (or lack thereof) for a given intervention, and can be tailored for application to a specific patient or group.  By reducing barriers to high-value, evidence-based services and providers, V-BID plans can achieve improved patient-centered outcomes at any level of health care expenditure.