U.S. spending on health care is growing rapidly and expected to reach 19.7% of gross domestic product by 2026.1 In response, the Centers for Medicare and Medicaid Services and national organizations such as the American Board of Internal Medicine (ABIM) and the American College of Physicians (ACP) have launched initiatives to ensure that the value being delivered to patients is on par with the escalating cost of care.
Over the past 10 years, I have led and advised hundreds of small- and large-scale projects that focused on improving patient care quality and cost. Below, I share what I, along with other leaders in high-value care, have observed that it takes to implement successful and lasting improvements – for the benefit of patients and hospitals.
A brief history of high-value care
When compared to other wealthy countries, the United States spends disproportionately more money on health care. In 2016, U.S. health care spending was $3.3 trillion1, or $10,348 per person.2 Hospital care alone was responsible for a third of health spending and amounted to $1.1 trillion in 20161. By 2026, national health spending is projected to reach $5.7 trillion1.
In response to escalating health care costs, CMS and other payers have shifted toward value-based reimbursements that tie payments to health care facilities and clinicians to their performance on selected quality, cost, and efficiency measures. For example, under the CMS Merit-based Incentive Payment System (MIPS), 5% of clinicians’ revenue in 2020 is tied to their 2018 performance in four categories: Quality, Cost, Improvement Activities, and Promoting Interoperability. The percentage of revenue at risk will increase to 9% in 2022, based on 2020 performance.
Rising health care costs put a burden not just on the federal and state budgets, but on individual and family budgets as well. Out-of-pocket spending grew 3.9% in 2016 to $352.5 billion1 and is expected to increase in the future. High health care costs rightfully bring into question the value individual consumers of health care services are getting in return. If value is defined as the level of benefit achieved for a given cost, what is high-value care? The 2013 Institute of Medicine report3 defined high-value care as “the best care for the patient, with the optimal result for the circumstances, delivered at the right price.” It goes beyond a set of quality and cost measures used by payers to affect provider reimbursement and is driven by day-to-day individual providers’ decisions that affect individual patients’ outcomes and their cost of care.
High-value care has been embraced by national organizations. In 2012, the ABIM Foundation launched the Choosing Wisely initiative to support and promote conversations between clinicians and patients in choosing care that is truly necessary, supported by evidence, and free from harm. The result was an evidence-based list of recommendations from 540 specialty societies, including the Society of Hospital Medicine. The SHM – Adult Hospital Medicine list4 features the following “Five things physicians and patients should question”: