System Redesign and Why It Matters
We here at The Tower Foundation have been paying attention over the last couple of years to the big changes happening in the health care delivery system. Why? Well, a few reasons. First, changes to the health care system mean big changes to not only the health care providers we work with, but also the intellectual disabilities and behavioral health providers we fund. Second, these changes are being driven, in large part, by the health care sector and as a result, the complex populations that we care about most are at risk of slipping through the cracks if the organizations we fund become obsolete. Third, this affects us too. If we want to be smart about grantmaking and supporting the organizations we fund, we should be paying attention to this issue.
Health Care – A Perfectly Imperfect System
You may have heard the quote before, “Every system is perfectly designed to get the results it gets.” [This quote is attributed to a range of people, including: Don Berwick, W. Edwards Deming, and Dr. Paul Batalden.] This seems apropos to the health care system broadly where we have seen a system that is better at treating very sick patients than keeping people healthy, and does so at extraordinarily high cost. The historic financial incentives for health care providers (fee for service) helped to solidify the system over the years as one that cranks out a lot of services for very sick people: more services = more money. But lots of things didn’t work so well in that system: providers were reimbursed for how much they did instead of how well they did it – so we got a lot of quantity, and not much quality. Providers weren’t reimbursed to treat the whole person or to keep them healthy – so unaddressed needs abounded (ahem – substance use disorders, mental illnesses, social determinants of health, to name a few). The costs of more sick people in the health care system have an impact on consumers as expensive emergency department visits are used with greater frequency, once preventable issues turn into life-long chronic illnesses, and behavioral health needs long-neglected lead to crisis (here’s a great interactive cost driver infographic from Altarum Healthcare Value Hub).
Now, finally, that system is changing. For our grantees in Massachusetts and New York, in particular, it’s changing at lightning speed. (And by lightning speed I mean about the speed of a sloth finishing a marathon compared to the speed of a snail crossing a sea of molasses. Which, let’s remember, is still pretty fast considering the complexity of the health care system.) In New York, we are in the midst of a change to Medicaid managed care and a shift toward Value-Based Payments (VBP). In Massachusetts, managed care is old news, but Alternative Payment Methodologies (APM) is the trend of the future. It doesn’t matter what you call it, these payments are attempting to accomplish the same thing: paying for quality of care instead of just quantity of services. And let’s be real, save money. Let’s call all of this Value-Based Reimbursement (VBR). I like that one best so far.
VBR requires lots and lots of changes; “delivery system redesign,” as they say in the biz. Delivery system redesign includes changes to: how we define success, how care is provided, how care is reimbursed, the kinds of care we provide, how our workforce is deployed and trained, and even who is at the decision-making table. For example, in this new world of providing care, we may not need as many Emergency Department nurses as insurers place greater value on seeing patients in preventive settings. But we will need more nurses in primary care and in home-based care settings. Specific to behavioral health, we will need more integration of mental health and substance use disorder treatment with primary care, especially for low-risk clients who are simply maintaining a treatment plan. At the same time, we will need to rely on our behavioral health providers to be the experts in the community when it comes to complex cases. These seemingly obvious shifts require every player in and adjacent to the health care system to make enormous changes to how they do business and how we train professionals.
This will be the first post I’m sharing on this topic, because I think it’s really relevant to our collective work. In my next post we’ll dive deeper into what VBR is, how it works, and why it matters to us.