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Value-based Care Models

Value-based Care Models

It’s wonderful to see this discussion about value-based care models (VBCMs). I appreciate Dr Buka’s response to my article1 and thanks to Ms Brillstein for continuing the dialogue.2  

I agree with Ms Brillstein that Dr Buka misunderstands value-based care. Dr Buka is not alone, though, as I would argue that many physicians do not fully comprehend the intent of value-based care. This worries me, as the data are clear about the benefits of VBCMs. Physicians often become myopic when it comes to protecting their generally unchecked sources of revenue. To be clear, I am the chairman of an 18-provider, six-location dermatology practice in south Florida, and it is important to run a profitable business. However, most dermatologists should earn as much or more under a value-based model.

Fee-for-service medicine has created a physician-centric (ie, profit-focused) health care model that has led to perverse incentives for physicians to 1) do more, and 2) perform the most profitable tests and procedures. In short, fee-for-service medicine is a volume-driven model. Dr Buka is absolutely right that as physicians, it is our responsibility to treat people, not cases or conditions. VBCMs are best for this goal, as value-based care is a patient-centric model that creates incentives for the provider to ensure that the most judicious approaches (ie, the least aggressive) are used so that patients never undergo any unnecessary or inappropriate tests and procedures. For example, it is increasingly common for dermatology practices to employ radiation oncologists to treat skin cancers. From 2011 to 2013, in-office electronic brachytherapy (EBT) treatment for skin cancers increased 20-fold. There was no data supporting this treatment shift.3 Current Medicare reimbursement for an eight course in-office EBT treatment is about $20004; as we know, there are a number of other more cost-effective management options. Fee-for-service dermatology incentivizes the most expensive treatment options. We should not view cost as being directly correlated with quality, effectiveness, necessity, or appropriateness. We cannot forget that value-based care is about providing value to the patient. A patient’s interests should be aligned with the provider. In a fee-for-service world, a patient’s interests are at risk of being placed behind profit motives. 

While I appreciate the examples of wart removal and atopic dermatitis, let’s instead look at the largest driver of dermatology costs, particularly in the Medicare age population: treatment of actinic keratoses (pre-cancer) and skin cancers. I analyzed the publicly available Medicare data from 2017 (the most recent data available), and the total Medicare spend by the 224 dermatologists in Palm Beach and Broward counties in Florida (where my practice ClearlyDerm operates) was about $70,000,000. When you look at common utilization metrics such as the number of biopsies per patient per year (BPPY), the median number was less than one—about 0.80. Yet 10% of the dermatologists did more than two BPPY, with the highest number being about 10 BPPY. Keep in mind that it does not appear these physicians who do a large number of biopsies treat more cancers. These same doctors tend to be outliers for other procedures as well (eg, cryosurgeries). For dermatologists who do not perform Mohs surgery, the median Medicare payment was $258.59 per patient per year (PPPY). The outliers were significantly higher at $500 PPPY, all the way up to more than $1,200 PPPY (again, without Mohs surgery). 

The variation in utilization (BPPY, total cost PPPY, cryosurgeries PPPY, Mohs utilization, etc) in fee-for-service dermatology, at least in south Florida, is statistically striking. There was no correlation with private equity ownership, and the overutilization predated the private equity acquisition. In order to achieve statutory budget neutrality, the proposed Medicare fee schedule again includes cuts in procedure reimbursements. Embracing a VBCM could save the profession from “death by a thousand cuts.”

 Value-based care is gradually taking over primary care—it is just a matter of time before value-based dermatology is the norm. According to the Lyu et al,5 “physicians reported that an interpolated median of 20.6% of overall medical care was unnecessary, including 22.0% of prescription medications, 24.9% of tests, and 11.1% of procedures.” VBCMs can eliminate the perverse incentives that lead to unnecessary and inappropriate medical care.

Dr Colton is chairman of ClearlyDerm, headquartered in Boca Raton, FL, with six locations throughout south Florida.

Disclosures: Dr Colton is a full-time employee of ClearlyDerm. He reports no other relevant financial relationships.

1. Buka B. Is value-based care really a solution for dermatologists? The Dermatologist. 2020;28(5):30-32. Accessed August 31, 2020.

2. Brillstein L. Value-based care vs fee-for-service for dermatology. The Dermatologist. 2020;28(7):8-9. Accessed August 31, 2020.

3. Linos E, VanBeek M, Resneck JS Jr. A sudden and concerning increase in the use of electronic brachytherapy for skin cancer. JAMA Dermatol. 2015;151(7):699-700 doi:10.1001/jamadermatol.2015.0385

4. Wolfe CM, Cognetta AB Jr. Radiation therapy for nonmelanoma skin cancer, a cost comparison: 2016 coding changes to radiation therapy. J Am Acad Dermatol.  2017;77(3):E79-E80. doi:10.1016/j.jaad.2017.01.062

5. Lyu H, Xu T, Brotman D, et al. Overtreatment in the United States. PLoS One. 2017;12(9):e0181970. doi:10.1371/journal.pone.0181970

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