The Mayo Clinic Policy group released this paper a few days ago. Although the intent is laudable when one gets into the details it doesn't work. Read the article first and then our commentary.
1. It's easy to say that "V=Q/C" but that assumes you can measure Q and C in comparable units, and that's at the heart of the comparative effectiveness controversy. If two providers have the same cost, and one has higher quality than the other, then clearly that provider has higher value. And if two providers have the same quality, and one has lower cost, then clearly that provider has higher value. But what if one provider has higher quality and also higher cost? If the mortality rate is half as much but the cost is twice is high, is value the same?
2. The fact that a region or state has lower quality or higher cost doesn't mean that any individual provider is of low value. So if you have a high quality, efficient doctor in a particular region, how do you justify cutting his/her payment because all the other doctors in the region are, on average, delivering lower value than the providers in other regions? This doesn't work well in markets where there are multiple providers -- you want to differentially reward those providers, not reward or penalize each of them based on their collective performance.
3. The quality and cost measurement systems are nowhere near what they need to be to allow this approach. It's not clear whether they're saying that an individual RBRVS fee is adjusted based on quality/cost for that service, or whether all RBRVS fees are adjusted based on some collective quality/cost measure. In the former case, you could theoretically do this for those services where there are quality measures, but where does the cost measure come from? Medicare dictates the cost, and it's hard to associated "efficiency" with an individual service. In the latter case, why would one pay less for trauma care just because the diabetes quality scores are low?
4. There are certain things that need to be fixed through the payment system, and certain things that need to be fixed through the benefit design. Higher-value providers should be rewarded with more patients, not necessarily with higher payments. In Wisconsin we have the best chance of actually creating a value based purchasing system because we have a claims data base that has the data on many of the patients(WHIO) in each market and we have a quality reporting system(WCHQ) that encompasses the majority of physician groups in the state. If we have quality and resource utilization data from these two data bases then we can make value statements on care delivery.
These types of experiments are critical to moving the value discussion forward in a real way.
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