Volume-Based To Value-Based Health System

February 12, 2019 | 0 Comments

The Bermuda Health Council released an information brief on ‘alternative payment mechanisms,’ which they said was part of a “larger community conversation around goals for transitioning our system from a volume-based payment model to one based more on value.”

A spokesperson said, “Recently, Bermuda’s residents have been frequently reminded about the cost of healthcare, particularly in the form of increased out-of-pocket costs and health insurance premiums. The recent National Health Accounts Report demonstrated a stabilization of costs versus gross domestic product over the last five years.

“However, the actual price that each insured individual is paying, is still rising. When paired with the high incidence of chronic illness and an aging population with growing healthcare needs, we are faced with the task of supporting the allocation of resources necessary for providers to achieve better outcomes, while still improving affordability for the public.

“With those challenges in mind, the Health Council has released an information brief providing context for, and examples of alternative payment mechanisms. Alternative payment mechanisms can be used to reimburse the delivery of health services, better incentivize collaboration, and move closer to universal health coverage.

“The information presented is part of a larger community conversation around goals for transitioning our system from a volume-based payment model to one based more on value.

According to BHEC, a Bermuda Medical Doctors’ Association [BMDA] Representative stated, “The issue with volume-based reimbursement is that this is sometimes associated with incentive to do more work, some of which may not be medically necessary e.g. laboratory testing or diagnostic imaging and sometimes even surgeries! These systems are very expensive, [and] often do not support preventive care and can even do harm.“

“The intention of how a health system pays for care should be to ensure that patients’ care needs are met and providers are fairly and appropriately reimbursed for managing that care. The right payment mechanism encourages providers to offer necessary, cost effective care without compromising quality, and also ensures that prevention is covered and wellness is prioritised.

“Value-based systems also incorporate the outcomes of the services provided. This may be based on patient satisfaction, reduced hospital readmission rates, waiting times, reduced complication rates, reduced hospital-acquired and post-operative infections and of course reduced negative outcomes from other acute and chronic illnesses. Incentives are applied to encourage cost-effective practices, whilst supporting quality outcomes.”

The Health Council added, “Unfortunately, not all outcomes are based on the quality of the care received. Many outcomes are based on patient-related factors such as socio-economics, genetics, psychology/mental health, culture and health beliefs. We are concerned that this may not be acknowledged. However, audit of clinical processes can provide evidence that clinical guidelines have been followed, supporting reimbursement even if the outcome is not optimal.”

“The brief though noting the benefits of models such as capitation or bundled payments, also identifies some of the challenges that may be faced even when adopting more outcomes focused models. These include shifts in who bears the risks, the need for more data, and a requirement for closer partnerships in clinical pathways.

“As two primary goals of the Health Council are to ensure health system cost control of both local and overseas care and enhance health system collaboration and care integration, we seek to empower the public for decision-making by providing information that describes and educates on health system options.

“The Health Council researches these options, per local demand and international standards, for feedback from the diverse segments of the population. We encourage the public to remain informed on proposed changes, ask critical questions and share your views on the information provided.

“The brief can be viewed on the Health Council website.

The Alternative Payment Mechanisms follow below [PDF here]:

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