Note from the Editor:

Starting this month as part of healthcare reform, Medicare is rewarding hospitals for what they term ‘quality care’ through the new program Value Based Purchasing (VBP) (PDF). The effects of this program will be closely watched, and this blog will offer perspectives from a variety of experts on the results. There is a lot at stake with VBP, with the very existence of certain facilities threatened (such as safety net hospitals). At the same time, there is hope that VBP can be a solution for the healthcare challenge of the next 10 years and beyond.

Myles Riner, MD, cut to the core of this issue in 2010 when he asked the question, “Is [value based purchasing] more about the cost of care, or more about the effectiveness of care?” Today during the inaugural month of the VBP implementation, Riner’s series of three blogs about this that he published two years ago are still topical, and provide insight into where VBP has been and where it is going. Below is his opening post first published in The Fickle Finger, in which he discusses how VBP may affect the dynamics of treating patients in the ED.

The ED has been at the forefront of the current national political debate, and looking at VBP through the ED is a useful way to see the key challenges and potential benefits. The ED does not fit easily into any program such as VBP and bundled payments and yet, it is right at the center of hospital readmissions.

Imagine that you are the medical director of an ED, and you decide to take to your hospital administrator a new set of cost-effective care policies that are designed to reduce the percent of admissions from your ED from 17% to 15%. In some hospitals, you might be met with incredulity: why would you do something like this when if would cost your hospital hundreds of thousands of dollars in revenue every month? You might be looking for another job. If you worked at a Kaiser hospital, you might be looking at a raise. If you worked at a hospital that was heavily involved in capitated managed care, your proposal might be welcome, but if the administrator of this hospital was particularly unscrupulous, you might be asked to apply these policies only to patients who are enrolled in the HMOs that had capitated the hospital for inpatient care, and not to those patients who were enrolled in a fee-for-service PPO. Is it any wonder, then, that here in Lost Vegas at the ACEP Council meeting, everyone seems to be having considerable difficulty figuring out how to define value based emergency care, or how to demonstrate to policy makers, insurance plans, regulators, legislators, hospital administrators, and patients that emergency physicians provide a valuable service and deserve to be fairly and generously compensated for this service?

With the Value Based Emergency Care Task Force’s report last year (2009), it appeared that ACEP was taking some positive steps to prepare our specialty to respond to the value based reimbursement paradigm that was represented in health care reform legislation through Accountable Care Organization and pay for quality initiatives. Unfortunately, it would appear that the development of an Emergency Care Patient Registry database, which ACEP hoped to use to quantify the value we bring to our patients and our health care system, is impractical and too expensive. It also looks like those emergency medicine episodes of care, that would have allowed emergency physicians to participate appropriately in bundled payments, are likely to be pretty complicated and difficult to develop; and might unintentionally result in EP services being ‘classified as devoid of value’. Finally, the imperative to define how emergency physicians will integrate into the risk-sharing, pay for quality, accountable hospital-health plan-medical provider delivery models (the newly designated solution to our flawed health care system in this country) has been held hostage to the lack of clear indications as to how these organizations will actually work, and the variability that will evolve under different state regulations, different hospital systems, and different insurance plans. Given these problems and uncertainties, it is difficult indeed for ACEP to, as Gretzky once suggested, skate to where the puck is going to be.

I think part of the problem is that it’s really difficult to pin down the value-based concept. Is it more about the cost of care, or more about the effectiveness of care? For example (and I am making up these numbers), EPs could spend $10,000 a patient to generate a 55% survival from sepsis, or $30,000 a patient to generate a 65% survival rate. Which is the more ‘valuable’ protocol? You might think organizations like Kaiser have the answers, but Kaiser premiums are going up too. The perception out there is that EPs spend $35,000 per sepsis patient to achieve a 50% survival rate, and $500 to treat a strep throat when primary care docs spend $40. No wonder it seems like a nearly impossible task to identify the paths to emergency medicine participation in value based purchasing. ACEP will be turning to expert consultants to help define these approaches, but really, who knows our business better than our own members? I think the solution to this problem lies in the recognition that the question of quality or effectiveness of care is assumed to be a given; and that the expectation of legislators and regulators is that we need to provide high quality care at less cost, not the best possible outcomes at the least possible cost. This may seem like a nuance, but it is much easier to address the value proposition when value is defined by the real driver here. Let’s face it, as we are faced with looming national bankruptcy, the driver is cost, and where we need to focus is on the development of cost-effective care protocols, the identification of the best opportunities for cost savings, and the wide dissemination and adoption of these protocols so as to reduce the variability in emergency medicine practice that undermines cost-effective care. Whatever we are spending to achieve survival in sepsis, or treat the strep throat, it’s probably too much.

Another part of the problem we face with value based purchasing is a perception problem. More about that soon in PART II.