From Access to Outcomes: Revitalizing Athens-Clarke County Health through Alternative Payment Models

Hi everyone! My name is Shriya Garg, and I am the current co-lead for the Healthcare Policy Team at the Arch Policy Institute. Today I will be advocating for the transition to alternative payment models for the healthcare system in Athens-Clarke County.

Background: The Rising Cost of Healthcare

In 2022, the American healthcare spending reached an all-time high at 4.5 trillion dollars (from 1.4 trillion dollars in 2000), which is approximately 13,493 dollars per person. Such healthcare expenditures are only expected to increase, making it far more difficult for the average American to afford and access basic care. This excessive health financing burden that patients and families are experiencing is known as financial toxicity. Financial toxicity is associated with a higher mental health burden, an increased delay in purchasing essentials such as food and accommodations, and more.

Financial toxicity is not a novel experience in Athens-Clarke County (ACC). Those covered by health insurance are not immune to this financial burden, with Americans having difficulty affording premiums, deductibles, and/or the treatments. With almost 20% of residents in ACC living below the poverty line, it has become evident that the rising costs of healthcare will push vulnerable populations away from healthcare systems. Compounded by underinsurance and uninsurance rates, addressing this financial toxicity and other financial barriers to accessing equitable care cannot be emphasized enough. 

The Current Healthcare Landscape in Athens-Clarke County 

Within ACC, there are many healthcare access points: Piedmont Athens, St. Mary’s Healthcare, Federally Qualified Health Centers (FHQCs) like Athens Neighborhood Health Center, free clinics like Athens Wellness Clinic and Mercy Clinic, and many others. Despite this, Athens remains behind in its provision of adequate healthcare to residents. According to County Health Rankings, ACC faces problems like limited primary care provider access and a higher emergency room burden for non-emergent issues. Such findings demonstrate that such residents had not been the recipients of essential primary care or preventative medicine. 

The ACC healthcare system, much like the rest of the United States, functions under a fee-for-service model where healthcare providers are paid based on the number of services they provide to a patient. Such a system incentivises healthcare professionals to value quantity over quality. One such study showed that physicians with “financial stakes” are eight times more likely to order a common laboratory blood panel, even after adjusting for patient and practice differences—showing that physician profit incentives may be a driver of rising healthcare costs. The fee-for-service model can also lead to overtesting, false diagnoses, and more that could ultimately hurt patients. Finally, through this fragmented fee-for-service model, patients become resistant to receiving each individual service/treatment due to high costs – which prevents them from getting the all-encompassing care that they need. However, alternative payment models, such as value-based healthcare, serve as a developing solution to rising healthcare costs for patients and their families.

Explaining Value-Based Healthcare

In this post, I hope to explain both what alternative payment models are, how they might improve the healthcare experience in ACC, and more specifically, whether this model is inclusive of low-income individuals. Alternative payment models like value-based healthcare systems emphasize quality over quantity. In this system, healthcare providers are reimbursed based on patient outcomes and patient satisfaction results. By tying payment amounts to patient results, healthcare providers are incentivized to provide “whole-person” or “patient-centric” care.

Firstly, value-based healthcare drives down costs for both patients and healthcare providers. By reducing repetitive, unnecessary tests and creating a bundled payment system, patients end up spending less money in the healthcare system. At first glance, reducing healthcare spending seems to be a motivating factor as it is for implementation. However, at a deeper look, value-based healthcare also incentivizes low-income individuals to engage with the healthcare system. Through the removal of per-service payments, patients may not hold as much resistance to receiving all-inclusive treatment from the beginning. For ACC, which has historically struggled with high poverty rates and a high emergency room burden (which demonstrates limited primary care visits and prior interaction with the healthcare system), transitioning to a value-based healthcare system may be of use.

How exactly does value-based healthcare provide “patient-centric” care? Firstly, this model promotes greater coordination between different healthcare specialties to allow for a seamless experience. Since physicians are evaluated and rewarded for patient outcomes, it is in the best interest of the healthcare providers that they guide the patient through the navigation of the healthcare system. Such a system would limit the fragmented care that some patients receive due to the high costs of the fee-for-service model. For example, by creating bundled and lower-cost care, patients will be receiving comprehensive care in a quicker time frame.

Implementation of such systems should not be taken lightly. Several considerations should be addressed before transitioning to a value-based healthcare system. Firstly, ACC would need to determine which specific value-based healthcare bundles and payment models would be best-suited for their residents.

 For example, if a few residents experience one subset of disease, it would not make sense to make that auto-included in the payment bundle. On the contrary, many ACC residents experience a high mental health burden of heart disease. Thus, focusing energy on prevalent diseases and determining what the baseline bundle is (and how to effectively track performance and outcomes) remains crucial. Furthermore, healthcare systems need to place greater emphasis on strengthening regional and inter-hospital connections and collaborations. It remains impossible for a bundled system to be created without some semblance of coordination between the multi-faceted healthcare system.

It is important to understand the arguments of healthcare policy experts who are skeptical of value-based healthcare. Their arguments posit that the focus on value-based healthcare has caused Medicare expansion delays, and these delays indicate that the transition to value-based healthcare cannot be the sole solution to this multifaceted healthcare problem. Furthermore, discussions regarding whether value-based healthcare adds a layer of administrative burden that reversibly increases healthcare spending are also an area of interest. Lastly, claims that the issue with outrageous healthcare pricing is largely derived from unregulated prices and limited price transparency leave healthcare reformers questioning whether value-based payment systems are the right decision after all.

Despite these concerns, it is important to still investigate the potential of value-based healthcare systems. When comparing the United States to countries like Sweden or the United Kingdom who align closer to value-based care models, it becomes transparent that the United States struggles far more in its efforts to cut costs and increase the value of care for their citizens. While this approach of transitioning to value-based care modelings may not be the only solution to solving this multifaceted issue, it certainly is a step in the right direction.