Why is it so hard to kill fee for service medicine?

It is hard to kill fee for service medicine. Most cite it as one of the root causes of the ills that plague Sick Care USA and they want change now. Tinkering with sick care is fraught with perils to patients and policy makers, so they are squabbling.

Three kinds of innovation can make health care better and cheaper: One changes the ways consumers buy and use health care, another taps into technology, and the third generates new business models.

The health care system erects an array of barriers to each type of innovation. More often than not, organizations can overcome the barriers by managing the six forces that have an impact on health care innovation:?players,?the friends and foes who can bolster or destroy;?funding,?the revenue-generation and capital-acquisition processes, which differ from those in other industries;?policy,?the regulations that pervade the industry;?technology,?the foundation for innovations that can make health care delivery more efficient and convenient;?customers,?the empowered and engaged consumers of health care; and?accountability,?the demand from consumers, payers, and regulators that innovations be safe, effective, and cost-effective. Companies can often turn these six forces to their advantage.

Here is why employer based insurance plans perpetuate fee for service and reasons why companies love them.

Health systems continue to face strong headwinds as they seek to shift to value-based care models. They're not able to advance the redesign as rapidly as they'd like, given the small total share of their revenues these value-based payment models represent.

CMS is applying pressure on health systems to transition from fee-for-service to value-based care by 2030. While value-based care has been discussed for years, many institutions are not yet fully prepared for its impact, as this transformation is set to influence not only Medicare but also other payer systems that benchmark against Medicare’s policies.

However, it’s harder than it sounds to translate what’s best for patients into everyday decisions and actions. It’s one thing to accept a capitated payment with the intent to implement value-based care. It’s another to put in place the complex operational improvements needed for success. Here are the roadblocks that Kaiser-Geisinger will face, followed by those the retail giants will encounter

Here is why is it so hard to kill employment-based insurance, the other fly in the ointment to many.

Here are the issues when it comes to finding a new model of healthcare spending.

Doctors, in particular, love the FFS model. According to a recent survey:

1. Physicians at physician-led organizations give their organizations a higher Net Promoter Score than physicians in management-led organizations, the study found. These physicians give a higher Net Promoter Score "as a place to work" (36 percent), "feel inspired by the organization's mission" (80 percent) and "feel sufficiently engaged in decisions about strategic direction" (83 percent).

2. In contrast, "physicians in management-led organizations on average are less inspired, less aligned and less likely than peers in physician-led practices to believe that they are sufficiently engaged in making important decisions about strategic direction and operations," Bain said.

3. A vast majority (more than 60 percent) of physicians believe they will face greater challenges in delivering high-quality care in the next two years, the survey found. They cited complex regulations, a growing administrative burden and frustration with EMRs.

4. The survey found physicians in physician-led and management-led organizations have a higher Net Promoter Score when they are actively engaged in decisions at their organization (47 percent), compared with those who are neutral (-14 percent) or disengaged (-61 percent).

5. More than 70 percent of physicians said they prefer a fee-for-service model, even with the higher cost compared to value-based models.

6. More than 80 percent of nonsurgical physicians believe pharmacy benefit managers don't exert a positive effect on drug costs.

Why is it so hard to kill FFS payment?

1. Too many people make too much money doing it that way.

2. Politicians are afraid of enacting too much change too soon

3. Entire industries, like EMR, CPT coding and others have been built around optimizing the fee for service model

4. Some would claim it would be like other "socialist" countries with more government power

5. Many are wary of how the payment negotiations would play out and the end result

6. Some want to get rid of third party payment altogether and this is just making a bad system worse

7. Many think "value" is a smoke screen and a ploy to pay providers less

8. Pay for performance is not working

9. Some stress that patients should decide what they want and how much they should pay for it and not be forced into a "panel" of patients.

10. It is always part of some election cycle.

11. Doctors don't have the tools they need to migrate to VBC

12. EMRs are not designed to measure value

13. Stakeholders can't agree on how to measure quality, like surgical quality, that is transparent, valid and used to stratify surgeons, separating the best from the rest.

14. We can't agree on how to measure costs of an episode of care and remove the mystery about how we determined the price

15. No one has a good handle on creating IT systems that help make data driven decisions that can be made transparent and easily understood by payer and patients.

16. Caring for patients with dementia has unique challenges.

17. Clinicians are more skeptical about the benefits or viability of value-based care and reimbursement compared to healthcare executives, a new?survey?shows.

18. Doctors get paid for innovation and value but don't know how to define or create it.

19. Lack of integration of claims data with clinical data

20. Barriers to data transparency and interoperability.

21. Misalignment between organizations’ incentives to spend wisely under value-based payment models and individual physicians’ incentives to reduce their malpractice liability risk.(https://www.nejm.org/doi/full/10.1056/NEJMp2105625?query=WB&cid=NEJM%20Weekend%20Briefing,%20September%204,%202021%20DM265745_NEJM_Non_Subscriber&bid=604812263)

22. More than a decade of experimentation with value-based payment (VBP) has produced?mixed spending and quality results?with little impact on health disparities. The Centers for Medicare and Medicaid Services (CMS) leadership has outlined?bold strategic plans?to improve its programs, but these changes alone may not achieve optimal results. That is due, in part, to: dynamics already in place around commercial plan-provider relationships; lopsided market leverage between “must-have” providers and health plans that cannot sell products without including those providers in their networks; and structural inequities in resources available to different providers. Each of these factors, alone and in combination, poses critical barriers to successful value-based payment.

23. Sustainable reimbursement is key for medical artificial intelligence (AI) to benefit patients and populations at scale; however, achieving reimbursement is complex and requires the support of various stakeholders. This article explains the roles of the different stakeholders and the extent to which reimbursement mechanisms, including fee-for-service and value-based care, align stakeholder interests and facilitate the scaling of medical AI adoption.

Many pundits have proclaimed that the postcovid virtual health world will become a integral part of medical care delivery. Unfortunately, that will take a fundamental change in the sickcare business model, not just a bunch of shiny new objects, to achieve widespread dissemination and implementation to the point where it becomes the standard of care.

Here are some ideas on how to create incentives to practice value based care.

Consultants, pundits and wonks are charging a lot telling us how we should all prepare for the new world of value based care and reimbursement. In the meantime, we continue to wait for the new cost curve bending messiah while dysfunctional EMRs continue to churn out notes that optimize fee for service payment, ICD-10 gurus are ramping up their webinars and seminars and doctors and their billers just keep on keeping on. There is a lot of money to be made in complexity. Just ask the IRS and the ecosystem that feeds from those teats.

As?Upton Sinclair?famously said, it’s difficult to get a man to understand something when his salary depends on his not understanding it.

Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs on Substack