The lost meaning of ‘quality’ and ‘cost’ in value-based care

Over the past decade, value-based care (VBC) has emerged as a popular alternative to the traditional fee-for-service (FFS) model. Despite its growing popularity, the anticipated benefits in cost reduction and quality improvement have not been realized for the broader population. In terms of quality, the past 10 years have seen a widening mortality gap between the U.S. and similar nations, along with a worsening disease burden. Regarding costs, individual contributions to health care expenses have continued to climb, showing no signs of abating.

So, why isn’t VBC achieving its intended effects at scale?

A key issue is that we’ve lost sight of the true meanings of “quality” and “cost” when it comes to health care. Genuine quality indicators, which are crucial for assessing patient outcomes, have been overshadowed by more easily quantifiable and manipulable process metrics. Meanwhile, the real costs of care are often hidden behind a zero-sum game of savings passed between payer and provider —savings that patients rarely see.

To truly improve cost efficiency and quality in health care, organizations must address four main challenges.

The missing patient

Current VBC programs often overlook the patient or caregiver in their design processes and fail to align incentives that encourage active participation in their health journey. By focusing on dynamics between providers and payers, organizations neglect the significant insights that could be gained from involving patients in program design. VBC programs should be designed to better target the outcomes that are most important to patients — both clinical and financial.

Moving forward, we can empower patients as chief decision makers in their health care by improving access to information about the outcomes that matter to them — such as all-in cost and clinician care philosophy. For example, implementing direct financial incentives for patients who achieve health goals could prove beneficial. Involving patients in VBC program planning through committees, interviews or other means can really help payers and providers better understand their needs and motivations.

The quality illusion

Many quality measures are predominantly focused on process adherence, which does not effectively measure patient outcomes. For higher-quality care to be achieved, the focus of quality measurement should shift from process adherence to patient outcomes. This shift would provide actionable information that both health organizations and patients could use to make informed decisions.

Organizations aiming to better utilize patient outcomes as indicators of care quality encounter two main challenges: capturing these outcomes and linking them to physician responsibility. Payers should help in interpreting claims data and quality analytics, streamline the tracking and monitoring of metrics for providers, and incorporate more outcomes-based quality measures in their programs. Conversely, providers need to collaborate closely with payers to collect, understand and use quality insights to shape their care delivery strategies. They should also negotiate for metrics that are meaningful and manageable for clinicians to review, handle and push for the adoption of outcomes-based quality measures.

The capacity shortage

The U.S. has reached a critical juncture in primary care, currently facing an estimated shortage of nearly 22,000 primary care physicians — a number expected to grow to 34,000 by 2035. Additionally, providers often view VBC skeptically, partly due to the increased job demands associated with these models. Organizations involved in VBC arrangements are burdened with mandatory tasks such as quality reporting, risk assessment and data reconciliation, as well as new voluntary activities essential for success, like care management. These added responsibilities have contributed to widespread provider burnout.

Given that most organizations cannot simply hire their way out of this workforce shortage, they need to look to technology as a potential solution. Technology enhances efficiency, broadens access to clinical resources and reduces the administrative tasks like documentation that contribute to provider burnout. Also, recent advancements, such as generative artificial intelligence, offer hope that future generations of physicians will be supported by a copilot equipped with extensive knowledge of medical literature, leading clinical practices and patient preferences. Increasing the number of clinicians is not a panacea, but neither is technology alone. The future of care delivery must combine human and machine elements, leveraging the strengths of both in a new care model.

The complexity concern

For a VBC program to successfully deliver higher-quality health outcomes, there must be an investment in advanced capabilities that provide care teams with deep insights into their patients.

Foundational capabilities for VBC, such as performance reporting tools, provider engagement teams, care coordination, population health management tools and utilization management tools, must work together to enable efficient patient management and begin to reduce unnecessary administrative burdens.

Ensuring that providers are equipped with the right tools to manage a value-based patient population is a critical step in advancing the progress of VBC arrangements. However, many providers are hesitant to make the long-term investments in data, infrastructure and technology needed to be successful in VBC. This hesitancy is driven in part by the inherent uncertainty of the traditional payer-provider relationship, in which the ground rules shift each annual negotiation cycle. To move forward, payers and providers need to explore other ways of partnering to enable the stability and predictability needed to invest for the long term.

To deliver on the promise of value-based care, health care organizations need to redefine and operationalize how they measure and manage quality and cost, aligning with the core goal of VBC to deliver high-quality, affordable care to our communities.

Asher Perzigian is a managing director in Accenture’s Health Practice and a recognized leader in commercializing and scaling innovative business transformation programs. Ajay Mody has carved a career at the nexus of technology and health care over the past two decades, delivering innovative and complex solutions for clients at scale. They work as managing directors in Accenture’s Health Practice and together co-host the Mavericks in Healthcare: Chronicles of Innovation Podcast Series. The authors also are grateful for contributions to this article by Accenture’s Florence Murabito and Lydia Trogdon.