Value-Based Payment Is the New For-Profit Health Care Industry

BY
Kip Sullivan, Kay Tillow & Ana Malinow, Truthout

PUBLISHED
September 8, 2022

Over the last decade, a new industry has emerged that may eventually contribute as much to administrative waste as the insurance industry does today. This industry has no name. Because the participants in the industry all promote a new scheme known as “value-based payment,” and because they all make money off it, we propose to call the new industry the value-based payment (VBP) industry.

Like the insurance industry, the VBP industry hovers over doctors and patients and seeks to influence (and in some cases, dictate) doctor-patient decision-making, and in the process diverts resources away from medical care. Unlike the insurance industry, the VBP industry is almost invisible to the public. It consists of a heterogeneous mix of corporations that own, contract with, manage, consult with, or sell services to providers (doctors and hospitals). Some, such as “accountable care organizations,” mimic insurance companies. Others are consultants, such as Privia, venture capitalists like General Catalyst, or firms selling management services, such as agilon health. Large pieces of this new industry are being bought out by companies like Walgreens and Amazon.

The economic and political power of this new industry was on display at the National Primary Care Transformation Summit, a virtual five-day event held in late July. As one of the opening speakers noted, the conference was attended by 4,800 people, many of whom paid $1,100 for the privilege. It was sponsored by 30 corporations, all of which participate in the VBP industry. Over 150 speakers, including five former administrators of the Centers for Medicare and Medicaid Services (CMS) as well as representatives of corporations sponsoring the event, promoted value-based payment as the solution to the crisis in primary care. The conference vividly illustrated why the VBP industry poses a serious threat to doctors and patients.

 

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