How the value-based payment system PROvalue leverages health economics to improve care: World Economic Forum

In its recent insight report The Moment of Truth for Healthcare Spending: How Payment Models can Transform Healthcare Systems the World Economic Forum highlights the significance of patient-centered and value-based care. As healthcare systems worldwide urgently need transformation, health economics are identified as the main driver for an improvement of care quality while keeping the cost at a societal level manageable.

Value is about outcomes that matter most to patients and Patient-Reported Outcome Measures (PROMs) are the instruments to capture this value. Today, monitoring and measuring the patient’s recovery and quality of life along the care pathways is becoming a part of clinical routine.

The World Economic Forum confirms in its new report that only valid and standardized PROMs can serve as a basis for successful VBR approaches and acceptance by all stakeholders.

For too long, the economic incentives valued working – and being paid – in silos and volume-based over cross-sectional collaboration and value-based reimbursement. With more and more governments realizing the potential of value-based healthcare, shift in economic incentive structures play a crucial role.

While healthcare professionals made the case for a shift towards patient-centricity and outcomes for many years, on a system level fee-for-service models (FFS) remain reality. Changing this needs new form of collaboration between payers, providers, patients and technology companies setting an unbiased infrastructure and outcome measurement process. Above all, it needs economic incentives to align all stakeholders around maximizing value for the patient.

According to the World Economic Forum, “the German government played a crucial role in incentivizing performance-based payments by introducing quality contracts in 2018, in which health insurers and hospitals could agree on additional payments outside the rigid DRG system. In 2021, the German legislature went one step further and stipulated a minimum budget that health insurers had to spend on quality contracts. Health insurers were to allocate funds to quality-centered care and closely monitor individual treatment paths.”

While the first payment schedule was delayed by one year due to effects of covid and economic pressure following and unprecedented surge of energy prices in Germany, several statutory health insurers started looking for solutions enabling value-based care in 2021. However, while the technical solution was one part, the organizational setup of scalable outcome-tracking and value-based payments was another.

“To improve the value for patients and increase the incentives for healthcare providers to integrate PROs into clinical practice, German Heartbeat Medical, a Berlin-based tech company, developed a new value-based payment framework that combined PRO-monitoring with an outcome-based payment.” (World Economic Forum, 2022)

This development was based on Heartbeat’s vision to enable multi-payer-multi-provider payment schemes as a driver for patient-centered and value-based care. The infrastructure to facilitate these frameworks is called PROvalue and as of January 2023 six German statutory health insurers, among them Techniker Krankenkasse and Barmer, as well as ten leading hospitals joined in the area of joint replacements.

This PROvalue Endo scheme is formally approved by the Federal Institute for Quality Assurance and Transparency in Healthcare and listed as a quality contract according to §110a Social Code. The payers, together accounting for 30 million policy holders or one third of the German healthcare insurance market, provide a value-based payment to the hospitals if specific outcome thresholds are met by the individual patient-reported outcomes monitored via the Heartbeat platform.

The contract includes ongoing close monitoring of the patient via Patient-Reported Outcome Measures (PROMs) by the treating hospital for one year. Heartbeat Medical developed the digital platform used for this scheme and includes comprehensive automated notifications to benchmark individual treatment and recovery paths. This enables any complications that may arise to be identified at an early stage and provides patients with additional safety. The contract also opens up the possibility for clinics to receive a value-based remuneration based on health related quality of life.

PROvalue Endo proves that even within FFS models governments’ decisions on pockets of value-based reimbursement can lead to a broad adoption. As the interest of payers and providers is rising, 2023 will see a dramatic increase of value-based payment contracts to drive better and efficient outcome quality in healthcare.