The Health Care Paradigm Shift: Moving From Volume to Value

Our health care payment and delivery systems have been shifting from volume-based to value-based care gradually over the past few years, and the movement received a big boost last month from the U.S. Department of Health and Human Services (HHS) when it announced plans to broadly implement value-based care in the next two years. How the program will be implemented in the Medicare payment system and in Accountable Care Organizations (ACOs) remains to be seen, but there are many issues that participants in these programs will need to resolve if the goal of improving the value of care is to be realized.

The HHS value-based care program is important because it aims to shift the focus from the quantity of services performed to patient health outcomes and the quality of care provided. The goal of this new focus, both at HHS and in the private sector, is to improve care and lower costs by providing the right care at the right time, and thus reduce over-treatment and under-treatment, reduce hospital admissions and readmissions, and dramatically reduce superfluous medical tests and procedures. If these objectives can be met through the new models of care such as ACOs, medical homes, community care or coordinated care networks, then we will have taken a significant step forward in addressing one of the largest challenges to our health care system and optimal patient care.

Quality measures play a critical role in the implementation of these models, as physician payments will be based on how they perform against quality metrics. But this plan has its challenges as the various stakeholders try to agree upon a list of quality measures that are achievable and relevant while minimizing the burden of information collection for health care providers.

As ACOs and other shared savings programs continue to expand nationwide in both public and private programs, it’s important to understand how these delivery and payment structures save money, as well as whether they result in improved patient health. A first step is to examine where gaps exist in quality measurements for prevalent and costly health conditions such as breast cancer, HIV, diabetes, and stroke, and to evaluate whether we are incentivizing the most appropriate and effective treatments for patients with these illnesses. We’re seeing an increased use of quality measurement tools, but we need to continue strengthening our understanding of how new payment models may be impacting individual patient treatments, therapies, and health outcomes.

The good news is that we have tools to help us recognize when these individual treatment effects will be an important factor.  One promising tool is value-based insurance design. In a value-based system, the more clinically beneficial a therapy is for a patient, the lower the patient’s cost share. For example, a woman seeking a mammography because she is at high risk for breast cancer would pay less for the test than someone who has little or no risk factors for breast cancer. The goal of value-based insurance is to encourage the use of high value therapies and services and reduce barriers to access for these services.

Having a better understanding of how treatments work for a wide variety of patients in their everyday lives — utilizing what’s known as “real-world evidence”— can also help improve health outcomes.

One of the biggest steps forward in using real-world evidence to help patients and providers make better treatment decisions is the rapid development and use of information technology to mine the vast amounts of data that exist in health care. New technology is giving us the ability to sift through massive amounts of data to make improvements in the efficiency and cost effectiveness of our health care payment and delivery system. By using information contained in electronic health records, claims data, and even wearable devices, we can gain improved insight into how health care is being delivered, as well as the quality of that care and how biopharmaceutical treatments are working in the real world.

We are still facing some challenges, though. While the biopharmaceutical and insurance sectors have begun to collaborate to conduct real-world studies designed to determine how to most effectively and economically treat disease, the way that insurers and employers will use this information to make coverage decisions is still being debated. Therefore, as we explore and expand these new opportunities for collaboration, we must be vigilant and work to ensure that we are using quality data, that the research is of the highest caliber using agreed upon standards, and that the evaluation of the evidence is done in a balanced manner. After all, it is the patient who has the most at stake.

While challenges remain, it is becoming clearer every day that shifting from volume-based toward value-based payment and delivery systems in health care has great potential. But it is also clear that it will take all of us in the health care system working together to achieve its full potential of providing the best quality health care.


Dan Leonard is the President of the National Pharmaceutical Council.  

Morning Consult