3

Evolving Values and Priorities in Health Care

For the first panel discussion, Mai Pham of Anthem and James Knickman of the New York University (NYU) Grossman School of Medicine and NYU Wagner Graduate School of Public Service shared their perspectives as leaders in the health care sector about why and how values and priorities are changing in health care. Following the panel discussion, the panelists addressed questions from participants. The session was moderated by Sanne Magnan. (Highlights of this session are presented in Box 3-1.)

SHIFTING TOWARD NEW VALUE AND INVESTMENT

“In health care,” Magnan said, “value is often associated with dollars spent for outcomes perceived to have merit or significance.” She reiterated the point made by Adams (see Chapter 2) that health care costs continue to increase, and that increased spending on health care often means that funding is being diverted from other priorities (e.g., addressing the social determinants of health). She referred participants to the commissioned infographic, which depicts some of the milestones in the movement by leaders in health care and business investments toward new value and investment in health care (see Appendix E). Magnan emphasized the statement on the infographic that “those shifts are still fragile and incomplete,” and asked panelists to comment on why this is the case, to reflect on the milestones, and to suggest other opportunities or milestones to keep pushing toward new value.

Looking back, Knickman said, early milestones that demonstrated a focus on value included the concept of capitation and the creation of health maintenance organizations, such as Kaiser Permanente and others. A more recent milestone was the Patient Protection and Affordable Care Act (ACA). Knickman reminded participants that although there is much emphasis on the coverage aspects for the ACA, it includes important provisions for system transformation. One example is the establishment of the Center for Medicare & Medicaid Innovation (CMMI), which is focused on testing new payment approaches and service models. Knickman also mentioned Delivery System Reform Incentive Payment programs, the Medicaid Innovation Accelerator Program, accountable care organizations (ACOs), health homes, and the Patient-Centered Outcomes Research Institute, which he said have generated momentum and interest. Another key milestone, he said, was the research that “laid the groundwork for understanding the importance of social determinants of health.”

Pham added that, early on, the idea that a health care provider should be accountable to a third party or to the public for the quality of care they provided was “revolutionary.” She also mentioned the development of

measures of quality so that a system of accountability in the marketplace could be implemented. Another “quiet revolution” following the passage of the ACA, she said, was transforming the mindset of care providers from a focus on revenue streams for their practice to an acknowledgment of the need to consider the total cost of care for their patients.

In response to why the transition to value is fragile and incomplete despite the momentum and investment, Pham said that many stakeholders still need to be convinced that the goals of value-based care and population health are also in their own economic self-interest. Knickman agreed and said that the fee-for-service payment model is still dominant. More effective evidence demonstrating the impact of upstream investments is needed to strengthen the transition. He suggested that another hurdle is that many physicians, who now understand that social determinants of health are important, do not see addressing them as their responsibility. Patient movement from provider to provider and insurer to insurer also adds to the challenge of implementing a lifelong health and well-being approach.

ENGAGING HEALTH SYSTEMS IN IMPROVING POPULATION HEALTH

Magnan asked Knickman to discuss a recent diagram he developed of the key drivers of hospital investment in community health.¹ To support the efforts of the Robert Wood Johnson Foundation (RWJF) in promoting community health, Knickman and colleagues launched the Enhancing the Role of Hospitals in Improving Population Health (EHPH) Learning Center at NYU. Learning from the RWJF grantees, EHPH developed a framework of five main drivers of health system engagement in community and population health. Knickman briefly listed the drivers:

• Health system mission or leadership that is focused on community health. If leadership at the top is not engaged, “it’s not going to happen,” he said.
• A business case. Health systems need to have a reason to engage in population health, Knickman said. Reasons could include a return on investment, or relationship building and reputation as a community leader, for example.
• Market concentration and competition. Competitor health systems that contribute to community health improvements might attract staff and patients.

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¹ See https://med.nyu.edu/chids/projects/enhancing-role-hospitals-improving-public-health (accessed June 23, 2021).

• Multisector partnerships. Transforming community health requires collaboration among health systems, community-based organizations, and other stakeholders.
• Public policy and legislation. Policies that require or incentivize investments in addressing the social determinants of health.

ALIGNING DRIVERS OF ACCOUNTABILITY AND ECONOMIC INTEREST

Magnan asked Pham to elaborate on the prospects of reaching a place where economic interests are aligned in a way that providers will be interested in population health and well-being. Pham said population health is a shared problem and providers cannot address it alone. The allocation of both accountability and resources for solving these issues is complex and involves multiple stakeholders. She said it is important to frame population health issues in terms that do not alienate stakeholders, and to facilitate “collective problem solving with everyone contributing proportionate to their means and their interests.” A top-down approach would likely not be constructive, she said.

Pham applied several key economic concepts to suggest an approach for moving forward. First, top-down government intervention is not necessarily needed to solve big problems. There is a role for government, she continued, but government does not need to drive the conversations. Rather, the conversation can be organized by a trusted party in the community “that has credibility with multiple stakeholders, in multiple sectors, who have an interest in solving this problem.” This could be a research institution, a philanthropy, or a convening organization that can bring stakeholders together.

Next, the trusted entity can gather input from stakeholders in a blinded fashion regarding what they might be willing and able to contribute to a solution. Pham noted that a blinded approach helps to reduce reputational posturing by stakeholders (i.e., stakeholders might not be realistic about what they can deliver and might overpromise in an unblinded setting). With a proposed collective pool of resources, the trusted entity can then begin to negotiate a solution without stakeholders feeling coerced. This approach, she said, results in a conversation about how to best use a unified pool of resources for collective action.

Knickman added that many individuals in the business community are adopting a double bottom-line approach that measures profits and return to investors, as well as social impact.

TAKING ACTION IN HEALTH CARE

Panelists discussed areas where leaders can work to facilitate the shift toward new values and investment priorities in health care. Pham emphasized the need to continue to make health care more efficient. She suggested that embracing a value-based path for the long term could ultimately allow organizations the freedom to invest creatively for health outcomes, rather than simply focusing on revenue-generating services.

Beyond efficiency, Pham suggested that a “fundamental contribution that providers can make is collecting the data.” Data are needed on the current social circumstances and needs of patients, especially qualitative data on interactions and causal pathways that contribute to overall health and health care, she said. She emphasized that without these data, prioritizing investments is very difficult.

Knickman noted two key challenges: increasing investments in addressing the social determinants of health upstream, and identifying the drivers of community health and community development. He suggested that increasing the adoption of value-based payment would increase social- and community-based services. Developing the evidence base on which social services are most effective is also important.

Knickman also drew attention to the need to focus on and provide incentives for improving care for the most vulnerable, including those with complex chronic conditions, mental health and substance use conditions, and intellectual and developmental disabilities.

Another challenge, Knickman said, is how to implement “passive interventions that lead people to the right choices” and foster healthier communities. He suggested that health systems should take the lead and even include this in their mission. He observed that, while there has been interest from health system leadership, much of the activity has been “token” and not at scale.

POLICY CHANGES TO CONSIDER

Magnan asked panelists to suggest one policy change, at any level (national, local, private, public, etc.), to explore. If one action is going to be taken, Pham said, it should be to redesign the physician fee schedule. Absolute prices for care are important, but she suggested that the relative prices in the fee schedule are the larger problem. Under current payment approaches used by Medicare and other payers, the profit margin for providers varies according to the service. Furthermore, Pham said that clinical services with great care value, such as taking the time to talk to the patient, generate the lowest profit margin. Office-based procedures such as electrocardiograms generate much higher margins. Profit margins drive both physician behavior and facility investments in infrastructure

that supports income-generating procedures. As a result, certain medical specialties become much more attractive for providers than other specialties, and certain types of initiatives are much more attractive for health systems. Even though providers and health systems understand and appreciate the broader societal goals, they respond to these underlying signals perpetuated by the fee schedule.

A challenge on the community resource side, Knickman said, is that investments made by a health system now will pay off over time, and people move from health system to health system during that time. He suggested addressing this concern by pooling resources for longer term investments in community health, drawing funding from health systems, payers, and others. Pham suggested that local government and local philanthropy contribute to the shared cost as well. She referred participants to the Vickrey-Clarke-Groves model of collective action and collective resource pooling.

DISCUSSION

Leadership for Change

Recalling the comments by Pham about reforming the physician fee schedule, Cathy Baase asked who could provide appropriate leadership for such policy changes. Pham responded that the leadership needed to address these large problems will come from multiple sources. She suggested that the Centers for Medicare & Medicaid Services and Congress would be ideally suited to lead physician payment reform, but that large payers also have an opportunity to lead in this area. She reiterated that the community can lead the solution process by pooling resources and negotiating consensus on solutions. Solutions need not be driven by government.

Knickman noted that the tradeoff between consolidation and competition is an ongoing debate in health economics. One solution to address the problems with the physician fee schedule, he said, would be “corporate medicine” (i.e., physicians work on salary for large health corporations). Similarly, having a limited number of health systems nationally would also solve some of the fee issues. Pham and Knickman both pointed out, however, that such an approach would require administered prices.

Market Forces

David Kindig of the University of Wisconsin–Madison mentioned a few examples of the progress made toward redirecting resources from the health care sphere toward health and well-being (e.g., ACOs, CMMI initiatives, shared savings). However, health care remains primarily fee-

for-service. He observed that the market forces behind genomics, for example, have led to investment and infrastructure. He said definitions of value need to include population health and, in that regard, suggested there is a need to strengthen sectors such as early childhood education.

Pham agreed that the market forces behind genomics dwarf those behind early childhood education. She suggested that the current health care system would seem to be what people want. Despite assertions that everyone values community health and wants community well-being, people also still want access to top-level providers and coverage of expensive treatments that might only provide incremental value to the patient. “We want the long-term strategies, but we are seduced by new large buildings and new gadgets,” she said. A national conversation is needed to define what people are willing to forgo to be able to fund community well-being.

Knickman commented that the current health system might be the right system for those who can afford it. However, it is not the right health system to meet the needs of the most vulnerable. He referred to the work of the Latino Community Foundation in California, which feels that meeting the health and education needs of the state’s large Latino population is essential for the state’s future economic prosperity.

Establishing the Evidence Base

Robert Kaplan of Stanford University continued on the topic of what will attract investors. For example, the idea that investments in genomic- or molecular biology–based interventions can lead to better health seems fairly widely accepted. The value of addressing the social determinants of health, however, is not clear to most people. From a provider perspective, there are established, evidence-based guidelines for managing cholesterol and blood pressure from the American Heart Association and the American College of Cardiology, Kaplan said, but there are no comparable guidelines for managing the social determinants of health. He asked about the status of building the evidence base to make the case for investing in behavioral and social determinants of health.

Magnan observed that data on social determinants of health are being collected, but what should be done with those data is not clear. Knickman emphasized the need for robust and integrated data systems and the ability to rapidly evaluate the data. He noted that relevant data can be found in electronic health record systems, claims systems, and other sources. Knickman shared an example from his laboratory of merging datasets to analyze how lowering speed limits in neighborhoods would impact accidents and pedestrian deaths. Pham suggested that the National Institutes of Health or the Agency for Healthcare Research and Quality could

conduct a study akin to the National Health and Nutrition Examination Survey, but focused on understanding social factors and health. This could help to establish the dataset and research platform on which interventional studies could then be done.

Advocating for Health

Terry Allan of Ohio’s Cuyahoga County Board of Health recalled comments made by the panelists about the value of a collective and collaborative approach to reinvestment. He shared an example regarding efforts to reduce racial disparities in infant mortality in the Greater Cleveland area that he said involved “unprecedented collaboration among medicine, public health, government, and payers.” Another example is the support for comprehensive smoke-free laws in Ohio, which he said is the result of a lot of advocacy work. Allen observed that, while a collaboration might be successful, it can often be short lived as collaborators must return to their usual responsibilities. He suggested that advocacy from the medical community could influence elected officials with regard to payment and spending priorities in ways that health-related collaborations and initiatives could have more lasting impact.

Knickman agreed with the importance of advocacy. He noted that there are many networks advocating in “relentless, quiet ways,” engaging chief executive officers and chief financial officers to ensure they understand why community health and well-being is so important. He observed that advocacy by health systems can sometimes create tension with community-based health organizations that might feel threatened by large academic health systems. He added that advocacy efforts, whether at the grassroots level or by organizations, need more funding.

Pham said it is generally agreed that efforts should focus on those who have the greatest need and who are underserved. However, she added that the uncomfortable reality of the marketplace is that it is easier to get the attention of investors by focusing on the populations they prize economically. She pondered what might happen if there were consumer demand by Medicare beneficiaries, consumers with private insurance, or their advocates for more attention to addressing the social determinants of health. How might providers alter their behavior to meet the expectations of consumers they value economically? How might that behavior then naturally extend to benefit needier and less profitable populations? Pham observed that younger patients prefer convenience when getting clinical care and prefer providers who acknowledge the circumstances of their work and lives. They are “far less interested in … fancy facilities,” she said, and suggested this could be leveraged to draw the attention of the market toward the community.