Pay for medical care only if it works? Industry faces massive shift toward value-based care

Dr. Vivian Lee, the dean of the School of Medicine at the University of Utah, pulled up a slide with a Google search.

Typed into it were the words "radiologists are..." The top auto-fill result? Parasites.

It's easy to see why the conclusion could be made: procedures like MRIs or CT scans can often be costly, and the array of tests and images that are run during a doctors' visit can seem excessive, almost as if the goal is to make money off each report, so the more the merrier.

Lee, a radiologist herself, was speaking at the Radiological Society of North America's annual conference about bringing value to healthcare.

"There are clearly some questions about the value of our role and the value of our field," Lee said in the talk Monday at the conference.

Right now, a massive shift is underway as the heathcare industry moves toward "value-based care," which aims to improve the quality of care and cut costs. In essence, payments to providers - be they doctors, hospitals or pharmaceutical companies, for example - are tied to the effectiveness of the treatment. The primary beneficiaries, in theory, are patients and insurers. The latter, for example, are in some cases negotiating to pay for a new drug only if it works for a particular patient.

It's something the government in particular has been pushing for. In 2014, 20% of Medicare was connected to value-based payments. In 2016, that number was 30%. By 2018, HHS wants 90% of payments to be tied to value.

The transition is essentially moving healthcare from a fee-for-service care to value-based care. Here's a simple explanation of the difference:

This switch is key as economic pressures in the healthcare industry change. Healthcare is facing a significant crisis in the US, Lee noted in her talk. She cited a chart that showed healthcare costs rising 50X more than wages have over the last 50 years.

A lot of that, Lee said, could be attributed to healthcare not understanding its costs. And that's something she hopes radiology can help change.

"These are the areas I hope our field will contribute to: drive the value of imaging by using imaging to assess the value of new tests, new drugs, and new devices, and integrate imaging into better clinical diagnosis and better decision making," she said.