True Value-Based Healthcare Requires a Coordinated Medical Record System

Editor’s note: This article is the eighth in an ongoing series by James McGauley, M.D., on the idea of a Coordinated Medical Record system, which produces a single comprehensive medical record for every patient. The record contains all of the patient’s clinical and financial healthcare information over space and time. The credit card industry is the model. This type of information system will do more to increase the quality and decrease the cost of healthcare simultaneously than any other single initiative.

Value-Based Payment Initiative

The current initiative by healthcare payers to replace the traditional fee-for-service payment model with a “value-based” system is not likely to improve the quality or decrease the cost of healthcare.

The Centers for Medicare & Medicaid Services (CMS) specifically defines value-based healthcare as paying for services in a manner that directly links a provider’s performance on cost, quality and the patient's experience of care. It’s essentially a payment model that assumes that quality reports provided to CMS and private insurance carriers by healthcare providers are a good way to measure quality of care, and therefore a good foundation on which to base provider reimbursement. But there’s a problem with these quality reports.

Quality Reports Abound

There are more than 3,000 competing quality measures across all government and private healthcare agencies. CMS Administrator Seema Verma, MPH, has said “it’s not clear whether all of these measures are actually improving patient care.”

Despite that uncertainty, she nevertheless said that “we need to move from fee-for-service to a system that pays for value and quality” even though “how we define value and quality today is a problem.”

To caregivers, trying to tie their reimbursement to parameters that cannot be clearly and universally defined seems counterintuitive. It’s quintessentially putting the cart before the horse.

Quality First

A previous article describes how a Coordinated Medical Record system can significantly improve the quality of healthcare by reducing the incidences of information-related problems. Decreasing the rates of misdiagnoses and inappropriate medications will decrease the incidences of duplicate tests, ER visits, hospitalizations and medical-legal issues.

Collectively, these quality improvement measures have the potential to reduce healthcare costs by hundreds of billions of dollars — an effect that a “value-based” payment model cannot duplicate.

Square Pegs Need Square Holes

Despite the fact that no physician wants to make a wrong diagnosis or prescribe an incompatible medication, these problems are occurring every day at every care site across the country. It’s not because physicians are generating too few quality reports or because they’re being paid in a particular way. Payers could double their reimbursements to physicians or cut them in half and the problems would still exist because payment protocols are not the cause of or the solution to the healthcare industry’s problems.

The healthcare industry’s major problems are information-related and they need a proactive,

real-time information-based solution, not a retroactive financial solution. A Coordinated Medical Record system helps to resolve the industry’s information-related problems because it gives physicians the information they need to avoid these problems at the time of every healthcare encounter — the times and places where all of these problems are occurring.

Alternative Payment Models Aren’t Working

As of today, about 90,000 physicians who participated in CMS-sponsored advanced alternative payment programs in 2017 have still not received their bonus payments. The program’s participants typically had to make significant investments in IT systems and support staff in order to fulfill the program’s requirements, and some providers have indicated that they might actually have to make budget cuts if they don’t receive their payments soon.

To make things worse, CMS’s own analysis shows that these programs are not correcting any of the problems that it associates with the traditional fee-for-service payment model.

Support Physicians

Because frontline physicians generate at least 80% of all healthcare activity, they are technically responsible for most of the industry’s information-related problems. By default, they are the only ones who can fix these problems.

In an environment where at least 50% of physicians are showing signs of burnout, primarily due to bureaucratic demands, long hours and EHR dysfunctionality, it seems unlikely that any initiatives that might decrease their reimbursement would be well received. Calling them “value-based” payments is not likely to convince or appease them.

A total of $35 billion was spent on an EHR incentive program that was well-intentioned, but not well-conceived. At some point there will need to be a policy shift in the healthcare industry based on the acknowledgement that fragmented EHRs are part of the industry’s quality and cost problem, not part of the solution.

Physicians, like most people, respond better to carrots than to sticks. Payer support for the development of a physician-friendly Coordinated Medical Record system that can actually solve many of the industry’s major problems is more likely to be well-received by physicians, than initiatives that threaten to decrease their reimbursement and offer no positive supportive measures in return.

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