Addressing Healthcare System Flaws: Shifting from PPO to Value-Based Care
TL/DR –
The American healthcare system is complex, with nearly $5 trillion in spending, and most people can’t access the care they need or it’s too expensive. The system’s structure pits purchasers, insurers, pharma companies, providers, and patients against each other, leading to overtreatment, overdiagnoses, overprescriptions, and providers overcharging for services. The author argues that a shift from PPO networks to a value-based care system, which has proven to be effective, would align all stakeholders’ goals, simplify administration, and focus on delivering appropriate care and reducing costs.
The Current State of the American Healthcare System
With the holiday season, it’s worth reflecting on the current state of the American healthcare system. Our healthcare system has been a topic of frustration with nearly five trillion dollars in spending and lack of accessibility for many.
The last significant healthcare discussion was during the introduction of the Affordable Care Act in 2010. Despite its flaws, it initiated a value-based care system, encouraging many companies to facilitate some of the improvements needed. Unfortunately, healthcare costs remain high, and accessibility is still a challenge for many, leading to a breaking point that has sparked much-needed conversations.
Chronic back pain sufferers, such as Luigi Mangione, highlight the disparities in our healthcare system. Not all patients have equal access to quality care or advice, often leading to tragic outcomes.
The complexity of the American healthcare system is daunting. The current fee-for-service PPO network model fosters a zero-sum game, with various stakeholders pitted against each other. This approach puts patients, their families, and our collective financial wellbeing at risk.
The overdiagnosis, overprescription, and overtreatment in our healthcare system has led to crises like the opioid epidemic. Moreover, providers often overcharge for services, adding to our bloated healthcare expenses. Middlemen in healthcare contribute heavily to these expenses, moving vast amounts of money around without reducing costs or improving care quality or patient experience.
What’s required is a system aligning all stakeholders, focusing on delivering appropriate care and cost reduction while instilling confidence in patients. This system overhaul requires a shift from PPO networks to a value-based care model.
The effectiveness of this model is evident, incentivizing providers to deliver suitable care while simplifying administrative tasks. This approach reduces back-and-forth between providers, pharma companies, insurers, and pharmacy benefit managers over reimbursements and care coverage. To effectuate real change, we need to follow the money flows and adjust accordingly. The time for value-based care is now.
Photo Credit: Big Stock Photo
For more insights, connect with Sach Jain, a healthcare industry veteran and founder and CEO of Carrum Health, a value-based specialty care benefits solution for self-insured employers.
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