Payment & Delivery Models

Moving the U.S. health care system to a value-based approach

David Nash, MD, is the founding dean of the Jefferson College of Population Health in Philadelphia, the first college of its kind in the country. A board-certified internist, Dr. Nash is internationally recognized as a trailblazer on rebuilding the U.S. health care system with more accountability, better outcomes, lower costs and wider access to care. He has been a passionate voice for health care delivery innovations—and the need to shift from a volume to value-based approach, which is less about filling beds and more about collaboration and prevention.

Dr. Nash received his BA in economics from Vassar College, his MD from the University of Rochester School of Medicine and Dentistry and his MBA from the Wharton School at the University of Pennsylvania. He has served on the faculty of Thomas Jefferson University for three decades, authored more than 100 peer-reviewed articles and has edited almost two dozen books, including most recently Population Health: Creating a Culture of Wellness.

Here’s what Nash had to say about revamping the system from the bottom up.

Q. What’s your definition of population health?

David Kindig of the University of Wisconsin first coined the term in 2003. Population health is about examining social determinants of health that are the principal drivers of health and well-being of populations. Understanding the impact of social determinants—income, education, where you live, exposure to trauma—are key to developing and implementing an effective population health approach. In the U.S., your ZIP code is more important than your genetic code.

Q. Why does it matter?

Because in our country, health care makes up 19 percent of the GDP—or $3 trillion. If the health care industry seceded from the nation, it would be the world’s fifth largest economy. This current spending is simply not sustainable; it will bankrupt the Medicare trust fund. In addition, of that $3 trillion, about $1 trillion is of no value—it’s wasteful. So the question is: Can we reallocate that money and put it where it’s of greater use?

Q. So how do you get the financial people to buy in?

That’s the $64,000 question. We are in no man’s land here—the demilitarized zone between private practice fee-for-service and value-based care. The goal is to make the system more transparent and more accountable ... and we are currently in this trough. We don’t know how quickly the system will evolve from volume to value. No one can answer this question definitively.

However, one in every five Medicare beneficiaries is already in an Accountable Care Organization or ACO, so we are surely well down the road to “No outcome, no income!”

Q. How do you propose measuring outcomes in a way that’s fair?

There’s a tremendous amount of research going on right now in an attempt to account for social determinants and weave them into the formula through the legislation known as MACRA [Medicare Access and CHIP Reauthorization Act of 2015]. We are focused on alternative payment models. This law is on the books to drive doctor behavior—and transform the way providers are paid—but we’re still in the early stages.

By next year we will have a year’s worth of data that will tell us more. Right now, though, we have too many measures that don’t make any sense so we have to modulate this whole thing—and that’s going to take some time. I estimate that within three years, we will have made significant positive changes to the MACRA measures and we will see improvement in outcomes as well.

Q. Your model requires a lot more primary care physicians. How are we going to accomplish that goal?

We’ll do it with a loan repayment program and other financial incentives to stimulate students to go into primary care. We’ll also make it more fun. We can make primary care more enticing by adopting new models of care and by firmly putting the patient at the center of everything we do.

Iora Health and Oak Street Health are two examples of venture-capital backed companies changing the model, of putting the patient first and employing collaborative solutions.

Q. What makes them different?

In a typical fee-for-service model, I look at the list of patients that day and I grind my way through the list. In an Iora office, for example, practitioners are paid to keep people healthy vs. our current system of caring for people when they get sick. With a population health perspective, it’s a different question: Who should we be seeing? Then, the care coordinators swing into action and contact those patients.

It’s a team effort—with a diabetes nurse educator, an exercise physiologist, a nutritionist. Instead of being focused on episodic care, the goal is to prevent [chronic diseases] from occurring in the first place. This sort of team-based care is a complete paradigm shift in how we conduct our day-to-day work. It will not happen overnight and it also means we have to change the training model at both the undergraduate medical education level and the graduate medical education levels.

Q. Can you describe what that training model looks like?

At the UME level, we need to stop forcing so much silly memorization and we need to teach the tenets of team work, lifetime learning and how to engage with consumers based on behavioral economics. At the GME level, we need to train interns and residents in skills to become better teachers and enhance their team leadership.

Q. How is your message being received by your peers?

Most of the pushback I have received over 30 years of trying is focused on the speed and scope of changes in the expectations that folks have who go into medicine. Change is all about fear of loss. There is some anticipated loss in the system—loss of income, loss of complete physician autonomy and the like. We have to trade some modest amount of physician autonomy for much greater public accountability.

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