Risk selection reduces efficiency of value-based healthcare

Area of Science:

• Healthcare economics
• Health policy analysis
• Quality improvement in healthcare

Background:

• Value-based healthcare (VBH) seeks to enhance patient value and system efficiency through innovative reimbursement strategies.
• Value-based payment (VBP) models are a key mechanism within VBH, aiming to align provider incentives with patient outcomes and cost-effectiveness.
• However, VBP models may inadvertently introduce or exacerbate risk selection, a phenomenon compromising healthcare equity and efficiency.

Purpose of the Study:

• To analyze the multifaceted nature of risk selection within value-based payment models.
• To identify the underlying causes and levels at which risk selection manifests in healthcare.
• To propose and evaluate strategies for mitigating the unintended consequences of risk selection in VBP.

Main Methods:

• Conceptual analysis of risk selection mechanisms in VBP.
• Review of existing literature on VBP outcomes and associated biases.
• Exploration of policy and organizational strategies for risk mitigation.

Main Results:

• Risk selection is a complex issue occurring at patient, hospital, and system levels.
• Causes include selection bias in performance metrics, preferential patient selection, and reputational factors.
• Potential mitigation strategies involve model design, transparent reporting, risk adjustment, and comprehensive performance metrics.

Conclusions:

• While VBP models offer potential benefits, the persistent challenge of risk selection requires ongoing attention.
• Implementing a combination of attractive, non-mandatory VBP models, robust risk adjustment, and expanded performance metrics is crucial.
• Continuous monitoring and evaluation are essential to manage and minimize risk selection, though complete elimination may not be feasible.