Value-based care could improve U.S. health care quality, but may not decrease administrative complexity, experts say

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As the United States trails in rankings of health care systems of developed nations, value-based care could improve patient outcomes, but might not smooth out administrative efficiency.

This week, The Commonwealth Fund published its latest “Mirror, Mirror 2024: A Portrait of the Failing U.S. Health System.” The report shows the U.S. health care is falling behind – in some instances, way behind – nine other developed nations, according to 70 performance measures of access to care, care process, administrative efficiency, equity and health outcomes.

So, how does value-based care fit into the health care quality equation?

The American Journal of Managed Care® posed the question: “The report notes that the U.S. health care system ranks poorly in administrative efficiency compared to other countries. Can you discuss how the use of value-based payment models, rather than the fee-for-service approach, could help address some of these administrative burdens and complexities in the U.S. system?”

Here are expert opinions from Commonwealth Fund immediate past President David Blumenthal, MD, and Reginald D. Williams II, vice president for international health policy and practice innovations. This transcript was edited for length and clarity.

David Blumenthal, MD
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David Blumenthal, MD: There are various kinds of value-based care, so it's hard to lump them all into the same bucket. The major purpose of value-based care is to increase value, not create simplicity. So I don't see value-based care as a magic bullet for reducing administrative costs or friction. The one exception to that is, in some sense, the ultimate form of value-based payment, and that is partial or complete capitation. When you pay in advance for care as large prepaid health maintenance organizations do, you create the opportunity to greatly reduce billing requirements and payment requirements on behalf of patients. So that is definitely a route toward improved administrative efficiency. Whether complicated, pay-for-performance systems that measure and pay for each type of care delivered will reduce administrative complexity is not clear. It may increase value by increasing quality, but it may not improve administrative efficiency.

Reginald D. Williams II
_{© The Commonwealth Fund}

Reginald D. Williams II: And I think that's where also the opportunity to think about the use of technology could potentially support the care of administrative efficiency around payments. In Australia, electronic claims processing happens on an almost instantaneous basis. And so based upon the arrangements for payment, the money is moved around very quickly from your public and private payers, which can lead to a certain amount of efficiency. And second, you know, in the UK, we have the example of kind of building on those, those, those, those bulk payments that happen on a monthly basis, and that's largely derived from information that's in patients’ electronic medical health records. So if value-based care creates the opportunity to deploy technology that makes things easier and not complicated from a billing standpoint, there could be some potential to perform like we see in other countries.

Background: Based on the “Mirror, Mirror 2024” report, care process includes prevention, safety, coordination, patient engagement and sensitivity to patient preferences. The United States ranks second-best in the world and the study called that rating “particularly interesting.” Value-based care and an emphasis on preventive services could be affecting that category, according to The Commonwealth Fund, although that health outcomes are bad, so care process may not be a primary driver of those.

Administrative efficiency focuses on challenges that physicians face dealing with insurance and resolving patient bills. Around the world, only Switzerland is worse than the United States in that category.

The American Journal of Managed Care® is published by MJH Life Sciences, the parent company of Medical Economics.