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Friday, June 13, 2014

Does the concept of "value based payments" make any sense at all?

Greg Scandlen at the Health Policy Blog comments on the term "value based" quoting from a worth- reading article by David Carr writing on the site Information Week. Here is link to Scandlen 's thoughts.

Scandlen deftly takes apart a widely quoted article by Michael Porter that appeared in the NEJM in 2010 .

The concepts  of professor Porter are widely quoted and for him value is defined as "health outcome per dollar spent" but he spends considerable effort in explicating how elusive and difficult that is to put into meaningful operational use.

A number of the concepts that Porter has made popular ,after a little thought, seem more to be catchy platitudes than useful,reality based insights.For example the notion of improving performance and accountability by "having a shared goal that unites the interests and activities of all stakeholder.s"Is there any real sense in which the patient has a shared goal with the third party payer?

quoting Scandlen:

" ..I would argue that the whole idea that “value to the patient” can be defined objectively is misguided. Even with precisely the same cost and the same medical outcome, the “value” of a service will be different for every patient. Dick Cheney seems to be very happy with his heart transplant and thrilled to extend his life by several more years. Someone else might think that the ordeal of the surgery and medical attention isn’t worth it. Or they might think that their life is pretty crappy and not worth extending."

In other words, value is subjective and in the eyes of the beholder which should be the patient and  not the cost effectiveness practitioners who can "determine" the value with numbers and regressions, even though at the end of the analysis someone has to make a value judgment call.

I have ranted about this near naked emperor before.  See here.

 The " value based payments" meme seems more and more to be  just another phony-baloney justification for third party payers to limit expenditures for medical care and dress it up with platitudes.

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