The Case for Value-Based Care - by Lukas Steinbock
The death of United Healthcare’s CEO made it clear that the public is fed up with our system. However, violence is not the path to progress; meaningful change will come through reform in health policy and innovation in the private sector. Thousands of people are working hard to create meaningful delivery system reform through a payment model called value-based care, and while imperfect, it solves many of the gripes (i.e., high prices, misalignment incentives, poor care coordination) that have radicalized so many of us. If you’re interested in learning more in-person, apply to my class on health insurance below.
In recent days, there has been a lot of recent criticism of value-based care, but these troughs and their subsequent peaks are nothing new. The first health plans in the US were “value-based,” or were providers who took on financial risk for their patient’s health, acting as an insurance company. This payment methodology encouraged them to focus on keeping patients healthy since they would pay for poor outcomes or unnecessary treatments. Dr. Shadid in Oklahoma City, Drs. Ross and Loos in LA all started these plans in 1929 and were all barred from their local medical societies. In the 1990s, there was significant public backlash (and a spicy Times covers) against HMOs. Despite this backlash, VBC has curbed health spending by lowering prices and reducing utilization. This decrease in spending should not have an effect on health outcomes, as differences in medical spending generally show do not show a statistically significant impact on health outcomes. And what does this reduction in health spending get us? Better education for children, fewer food deserts, and more food stamps. At the end of the day, Americans are way too sick, and we are spending way too much on healthcare. It’s not more healthcare that’s going to save us, it’s a healthier lifestyle - one that everyone should have the liberty to choose.
“Good health doesn’t start in hospitals and clinics; it starts in our homes and neighborhoods, in the food we eat, the air we breathe, and the safety of our streets.” - Body Economic
