10 years in: The impact of value-based care

Mark McClellan, M.D., Ph.D., director, Duke-Margolis Institute for Health Policy, former CMS administrator

A decade ago, the federal government launched its large-scale Medicare Access and CHIP Reauthorization Act (MACRA) in an attempt to move more physicians into value-based care to rein in exploding costs and improve care.

Later this summer, Medical Economics will release the second edition of Medical Economics Insider featuring an in-depth look at how successful MACRA has been and what the future of value-based care looks like, both from the government and from private payers. As part of that extended coverage, we are featuring an advanced look at some of the experts we talked to, offering additional insights into value-based care and what doctors need to know moving forward.

Medical Economics spoke with Mark McClellan, M.D., Ph.D., director, Duke-Margolis Institute for Health Policy, and a former administrator at CMS, about why value-based care hasn’t been adopted more quickly.

The transcript has been edited for brevity and clarity.

Medical Economics: For years we've been hearing that everybody's moving to value-based care, but fee-for-service accounts for the majority of payments. Why hasn't value-based care gained more traction, both on the public and private payer sides?

Mark McClellan, M.D., Ph.D.: We have seen some organizations succeed and make notable progress and move away from fee for service and into alternative payment models, but it's still maybe approaching an inflection point. If you look at the numbers there are more Medicare beneficiaries and even more Medicare Advantage beneficiaries in physician payment arrangements that are not fee for service, or that at least have some component of value-based care. But most of the payments are still fee-for-service based and underlying all of this is still a fee for service payment system. So those that have moved into alternative payment models are still facing some big administrative burdens. They still have to fill out all the claims and submit all the claims. It has not yet turned out to be a pathway away from all of that paperwork, and there also are some challenges in getting the data and clarity needed in these models. For many alternative payment models, it takes days to weeks to get data on what kind of utilization your patients are having, what kinds of complications they may be having outside of your physician practice, and it may be months to a year before you actually know how you did against the benchmarks. That makes it really hard to succeed and makes health care organizations very cautious about committing to moving further away from fee for service

Medical Economics: What about the smaller, independent physician practices? Can they survive under a value-based care system?

Mark McClellan, M.D., Ph.D.: I think it's very tough under the current cumbersome reporting requirements. If you're a small practice trying to succeed with some of your beneficiaries in traditional Medicare as an ACO, they have different ways that they have to get data to calculate risk adjustment and stars measures. It's time to do more, to standardize all of that, assisted by AI. But the good underlying data are there now and should be there in our electronic medical records. We just need to make it easier for clinicians to report on all of this automatically and more consistently based on the data that they really believe is most important for identifying their patients’ risks and taking clear and effective steps to reduce those risks.