by William Skink
There is a sea change coming to how health care is delivered in America and not many people even know it’s happening. What will slowly start getting phased in during the next few years is a transition from fee-for-services to value-based reimbursement. That might not sound significant, but I assure RD readers, it is. Here is a better explanation:
The switch to value-based reimbursement has turned the traditional model of healthcare reimbursement on its head, causing providers to change the way they bill for care. Instead of providers being paid by the number of visits and tests they order (fee-for-service), their payments are now based on the value of care they deliver (value-based care).
A lot of this change is long overdue and quite exciting because it’s driving improvements to the delivery of care by mandating better care at a lower cost. But for those providers and health systems that can’t achieve the required scores, the financial penalties and lower reimbursements will create a significant financial burden.
I first learned of this transition a few months ago when my former boss, the ED of the Pov, came back from a meeting in Helena where some heavy hitters from the finance sector were discussing this shift. When she reported on this to city officials, everyone in the room was dumbfounded. Not only had they not heard of this, there is essentially nothing happening in Missoula to proactively plan for this sea change. Billings, on the other hand, has already established a full-time paid position to work on this.
Why is this such a big deal? I’ll try to explain.
Let’s say someone shows up to the ER with respiratory problems and a contributing factor to this health condition is mold in the apartment. Normally this person would be treated and sent home, but if the home environment is contributing to the health condition, there is a good chance the person will show up in the ER again.
With value-based care–or pay for value as it’s sometimes called–the financial penalties for someone returning to get medical care within 30 days of first being seen will increase significantly. Financial penalties will be the coercive mechanism to get hospitals to look at the big picture when it comes to a persons health condition. And insurers–both federal and private sector–will start actually paying for non-clinical things, like mold mitigation.
Are you starting to see how big this is?
Now, let’s take a look at the chronic homeless population, or “frequent fliers” as they are known in the first responder community. As the name implies, their use of medical care is frequent and mostly ineffective because too often the addiction and co-occurring mental health issues are too severe, and the ER is not the appropriate environment to be administering the kind of care these folks need. But, with pay for value, if they keep showing up in the ER, the hospital will be significantly penalized. So if being homeless is exacerbating their health condition, will insurers pay rent or security deposits to get them housed? That is an open question.
Missoula is not prepared for this shift, just like Missoula is not prepared for the ever growing aging population. But the transition will happen whether Missoula is prepared or not.
Billings is better prepared and from what I’ve heard a private insurer has already started making non-clinical payouts to improve individual health conditions to keep people from over utilizing medical care that hospitals were happy to bill for regardless of how effective that care was.
Maybe someday Missoula will get its shit together.