Kelly McGrathIf you do not care about the cost of health care, you should. Health care costs consume about 18% of the Gross Domestic Product (GDP) of the United States.  Compared to other developed countries, the US devotes many more resources to health care; countries such as Germany, England, Canada and France only devote around 12% of their GDP to health care costs.


Unfortunately, our higher costs do not translate into better outcomes. Life expectancy in the US has actually decreased despite the high costs of care. There are many reasons for this, and the issue is quite complex. Although this may seem like an abstract issue, for each of us, it is quite personal.  We all want to be as healthy as possible while still avoiding spending our individual resources on medical care.  Of course, the best way to impact this is on a personal level by engaging in those behaviors which lead to prosperous, healthy lives, while avoiding those known to put our health at risk.


On a larger scale, there are many strategies proposed to address health care costs. Of course, just cutting costs alone is not likely to result in improved health. What we need is to have better outcomes at lower costs.  This is no easy task but a new payment model called “value based payment” may help. In this model, health care providers, as members of networks, are required to share risks with insurance payers.  These providers are required to deliver high quality care by achieving patient outcome benchmarks while doing so at a cost lower than anticipated for a certain population.  Similar to insurance companies, these networks must assume cost risks while delivering better outcomes.  Some models actually make the provider networks pay the insurance companies if they fail to hit the targets for cost and quality. These systems put higher emphasis on preventative services and coordination of care for complex conditions.


With most private and public insurances now embracing “value based payment,Clearwater Valley Health and St. Mary’s Health are actively participating in these models. It is daunting work.  To deliver care that is more efficient, while simultaneously improving outcomes, is challenging.  It is, however, good work in that it has allowed us to put emphasis on new programs that traditionally are not covered by insurance.  These include care coordination for patients with complex diagnoses or situations. We also have staff looking at the overall health of our population by providing the support and education that patients need to lead prosperous lives. Another example of value based care is our Community Health Workers program. Community Health Workers support our local communities by aligning the right resources to people to help prevent illness or control their medical conditions.


Traditional “fee for service” payment models did not allow for this kind of creative work.  Although many of these services are not directly covered by insurance, the value based payment model allows health systems to engage in these efforts.  If the health system is able to improve outcomes at lower costs using such services, these savings help to offset the cost of such programs within the health system.


Value based payment models also provide information to doctors around the cost of care within the population they serve.  With this information, we can then focus efforts in the places where we can best impact care quality and cost.  Traditionally, without this higher-level cost data, providers could only guess at the total cost of care for the population they serve.


Will value based payment models help us as Americans to live healthier lives at a lower cost?  Only time will answer this question but many believe it will.  In the end though, no payment model can “fix” the health care system without the personal engagement of patients. If we each make efforts to engage in healthy behaviors, while avoiding those actions that impact our health negatively, we will collectively improve the health of our country while reducing the cost to do so.