Half Measures

The Healthcode System  ...  Chapter 7

The obvious answer to everything in the last three chapters is to stop paying for procedures and start paying for health. Stop rewarding the volume of things done to a patient; reward instead whether the patient got well, and stayed well. The instinct is correct. It has a name  ...  value-based care  ...  and, after more than a decade of trial, a record long enough to judge honestly. This chapter judges it before the next one proposes, because a proposal that has not reckoned with the ledger is not a plan. It is a wish.

The reform has been pursued in earnest. The Affordable Care Act built a federal laboratory, the Center for Medicare and Medicaid Innovation, to design and test payment models that reward outcomes over volume: accountable care organizations, bundled payments, and dozens of variations besides. Over its first decade the center launched roughly fifty models touching more than forty million patients.[1] No one can accuse the system of failing to try the idea.

The honest ledger is sobering. The innovation center was projected to reduce net federal spending by some billions in its first decade; instead, by the Congressional Budget Office's accounting, it increased net spending by 5.4 billion dollars, with further increases projected for the decade after.[2] Of forty-nine models with published evaluations, only six produced statistically significant savings  ...  all of them modest, none exceeding a few hundred million dollars a year  ...  and only four were ever certified to expand.[3] An independent review of the more mature models found the results split in rough thirds: a third saved real money, a third lost it, and a third did little either way, with quality effects that were similarly mixed.[4] This is not the case for the prosecution. It is the record, kept by the people who believe in the reform.

The record is not uniformly gray, and the bright spots matter more than the disappointments, because they show where the instinct holds. Medicare's largest accountable-care effort, the Shared Savings Program, now saves on the order of two billion dollars a year; its strongest performers, year after year, are the organizations led by primary care.[5] The lesson rhymes with the previous chapter: put the money behind the thinking, the coordination, the prevention, and the savings follow. Paying for value is not wrong. Where it has been pursued seriously and given time, it works. The trouble is what "value" has been forced to become inside a system made of codes.

You cannot pay for value without measuring it, and to measure value in this system is to generate more codes. Quality is assessed by extracting coded metrics from the medical record. Accountable care organizations identify their patients and tally their savings through claims, which are codes. The main program meant to reward physician quality grew into a reporting burden of its own, onerous and bound to the same software, until clinicians spent yet more of the day documenting that they had been good rather than being good.[6] Value-based care did not leave the health-code system behind. It bolted a second story of codes  ...  quality codes  ...  on top of the first.

What follows is the oldest hazard in measurement: once a metric becomes a target, the work bends toward the metric rather than the goal it was meant to capture. The reform changed the question from how much did you do to how well did you score, and the answer is still written in code, still gameable, still adjudicated by the apparatus that produced the problem. A system cannot measure its way out of measurement. It can only choose its measures more wisely... which is worth doing, and is not the same as being cured.

These are half measures in two senses, and both matter. In the plain sense, the results so far are fractional  ...  a third of the models, modest sums, set against a system counted in trillions. In the deeper sense, even the genuine successes only reweight the codeable. They shift payment from procedures toward outcomes, which is right and necessary and overdue. They do not, and cannot, reach past the code to the negative space the last chapter described: the prevention that throws off no codeable metric, and the housing and food and air that generate no claim at all. Paying for value is half the cure. It is the necessary half. It is not the whole, and pretending otherwise is how good reforms get oversold, then abandoned when they fail to do the thing they were never built to do.

The next chapter takes the instinct seriously rather than incrementally. It asks what a payment model would look like if it staggered the majority of a provider's income against the totality of patient and population outcomes  ...  not a bonus at the margin, but the main event  ...  and it asks, just as seriously, what such a model would demand, what it would risk, and where, even at its best, it would still run out of reach.

Notes

1. The Center for Medicare and Medicaid Innovation (CMMI), created by the Affordable Care Act in 2010, launched roughly fifty payment and delivery models touching more than forty million beneficiaries in its first decade. Testimony before the House Energy and Commerce Committee, via Healthcare Dive; CMS.

2. CMMI was initially expected to reduce net federal spending (by roughly $2.8 billion across 2011–2020) but instead increased net direct spending by $5.4 billion over that period, with an additional $1.3 billion projected for 2021–2030. Congressional Budget Office (2023), via Healthcare Dive and the Paragon Health Institute.

3. Of forty-nine CMMI models with published evaluations, only six generated statistically significant savings  ...  all modest, none exceeding roughly $220 million annually  ...  and only four were certified for expansion. Congressional Budget Office (2023); Niskanen Center.

4. An Avalere Health review (December 2024) of eighteen mature CMMI models found roughly one-third produced substantial net savings, one-third substantial net losses, and one-third nominal effects, with mixed quality impacts. Avalere Health, via TechTarget and Healthcare Dive.

5. The Medicare Shared Savings Program saves on the order of $2 billion a year (more than $1.8 billion in 2022), with primary-care-led accountable care organizations consistently the strongest performers. CMS; Niskanen Center.

6. Quality measurement under value-based programs  ...  including the Merit-based Incentive Payment System (MIPS)  ...  relies on extracting coded clinical measures from provider records and has been widely criticized as an onerous, costly reporting burden. Health-policy commentary on MIPS and clinical quality reporting.