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Progress in the March Toward Better Health Care Value

By Kyle Marshall | July 10, 2014 | Healthy Lifestyle, Industry Perspectives

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You might not know it, but the odds are increasing that your doctor or hospital is getting paid for the quality of care you receive.

The world of medical payments continues to shift in favor of health care value, and away from the volume of procedures performed, the Blue Cross and Blue Shield Association says in a study released this week. About one in five medical claims paid by Blue Plans is in programs that pay for value and quality. That proportion is higher in North Carolina — about 40 percent, according to data we’ve compiled at BCBSNC.

The findings picked up national media attention, as health care experts are eager to see how well value-based payment arrangements are working in improving quality and keeping medical costs in check.

BCBSNC CEO Brad Wilson told The New York Times that we’re still in the early stages of the shift to value over volume.

“The fee-for-service model is changing and is going to continue to change,” he said.

The theory is simple: Pay a doctor or hospital for each procedure, and there’s incentive to do duplicate and unnecessary procedures. Or, pay for meeting quality and cost standards, and providers will have strong incentives to meet those standards.

In practice, it’s hard to wipe out our decades-old fee-for-service system. But there’s ample evidence to suggest the health care system is making progress in the shift to value-based.

BCBSNC’s work with UNC Health Care on Carolina Advanced Health — a medical practice built on value-based payments — is one example. As we’ve reported before, and as mentioned in The New York Times story, unnecessary hospitalizations have been avoided, and emergency department visits are 64 percent fewer than other primary care practices.

You can find out more about efforts in North Carolina to move to a value-based system at the Solutions page of our Let’s Talk Cost site.