Episode Details

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Last week's show (EP359) was with Dan O'Neill, and he talked about the four gradations of value-based payments, from paying purely for volume on one end of the continuum to paying purely for value on the other. When you have a moment (not now, but when you can), go back and listen to that show, as it adds some color to what we talk about in this healthcare podcast.

But in the meantime, one of the points that Dan O'Neill makes is that patients in this country won't gain the benefits of value-based care unless commercial insurers pay for value, for reals. After all, value-based payments are payments that incentivize value-based care. Without value-based payments, how does anyone expect to get value-based care?

To belabor this point momentarily, a provider is not gonna switch up their FFS business model when insurers, especially commercial insurers, pay whatever for whatever with no reward going to providers who spend time and effort to create value and/or better outcomes for patients. I'm being super cynical here, I will grant you. But in this day and age of private equity and record profits by a consolidated healthcare industry, if I'm in charge of a provider organization just realistically here, Pramod John, PhD, says this really well in EP352. He's talking about drug development in that episode, but same thing here is true for medical care. If you indiscriminately pay Ferrari prices for Hyundais, you're gonna get a Hyundai for the price of a Ferrari.

To add insult to injury—and this is just one important reason why providers aren't really willing to invest in lifting outcomes—any value that they would manage to create is gonna be realized by the insurers. It's gonna go right back into insurers' pockets. Steve Schutzer, MD, talks about this in his episode (Encore! EP294) about the why and how to create a center of excellence. If, as a provider in a pure volume contract which is FFS, I work really hard to save downstream costs and complications for patients, some carrier is gonna bank the difference.

It's go time, all you self-insured employers out there. Pay for high quality. Make the carrot an orange-colored stick, as they say. Patients will benefit. Probably doctors and other clinicians, too, honestly: less moral injury and crappy workflows.

In this healthcare podcast, I am talking with Jeb Dunkelberger. Jeb Dunkelberger is th