Capitalism is the path to value-based care
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The new president of the United States will have urgent issues to address, including a health care crisis marked by unsustainable costs without corresponding improvement in quality.
As patients face barriers to high-quality care, physicians are increasingly removed from their roles as leaders of patient care, yielding to the financial pressures imposed by administrators and insurers. The increase in profits from insurance companies, pharmacy benefit managers and health care systems starkly contrasts with a steady decline in government and third-party reimbursement. With more than 50% of Medicare patients managed by for-profit insurance companies and the federal government pushing value-based care, health care has shifted toward a socialized medicine model without evidence of reduced costs or improved care.
Cost control
The concept of value-based care, which incentivizes higher quality at lower costs, has been undermined by the challenge of defining quality. With measurable costs and elusive quality metrics, cost control becomes a primary focus, overshadowing innovation and improvement. There has been a shift toward socialized health care delivery models where access to care is prioritized. Unfortunately, the systems have proven vulnerable to spiraling costs and declining quality.
The Affordable Care Act passed in 2010, when $2.5 trillion or 17.6% of the gross national product was spent on health care. Last year, $4.8 trillion, or 17.9% of the gross domestic product, was spent on health care. Profitable specialties have drifted from the revenue side of accounting under a fee-for-service model to the cost side under value-based care models.
Increasing costs and disparities in access to care have led to a more socialized form of health care. Proponents argue health care is a right. The ACA and proposals for single-payer systems aim to expand coverage and make health care more affordable. The initiatives have succeeded in improving access for some patients, particularly underserved populations, but they have also highlighted the limitations of a socialized medicine model in a capitalist society.
Increasing access without addressing the fundamental cost drivers leads to negative-sum economics, where costs outweigh benefits. Government policies and regulations have struggled to influence the cost drivers, which has led to reduced reimbursement to physicians and other health care providers. This approach has been particularly challenging for orthopedic surgeons, who have seen inflation-adjusted reimbursements for procedures like total hip and total knee arthroplasty decrease by more than 65% since 1992. The result is financial pressure that forces orthopedic surgeons to leave the system and retire early, modify services based on reimbursement, move to an employed model or creation of hybrid models with the business of orthopedics moved close to the center of the decision algorithm in partnership with capital partners.
Reducing reimbursement and financial stability have contributed to the dramatic increase in the number of orthopedic surgeons employed by hospitals and large health care systems. Employment comes at the cost of professional independence and satisfaction. It also furthers the movement toward a socialized health care model. Employed surgeons are subject to the same cost-control pressures as their employers leading to an increased focus on productivity and revenue generation in a fee-for-service model and delay or rationing of high-cost care in a value-based care system. Since both model can exist in most practices, orthopedic surgeons are now being asked to treat patients differently based on status, which should be considered a violation of the prohibition of the corporate practice of medicine. By modifying resources and care pathways, the administration distorts the patient-first model that providers and patients prefer, incorporating providers into the organization’s concerns of financial health and sustainability.
Transparency and efficiency
The health care system’s shift toward a socialized model has thus far failed to achieve politicians’ goals of quality improvement and cost containment. It is time to reconsider a capitalist approach rooted in competition, innovation, transparency and efficiency. Providers would be incentivized to innovate and improve outcomes while reducing expenses. Physicians, especially orthopedic surgeons, could reclaim leadership roles, making care decisions based on evidence and patient needs, not organizational financial priorities. This autonomy would also enable physicians to develop more effective care models that approach a value-based care system where providers are rewarded for delivering high-quality, cost-effective care.
Theoretically, value-based care is one of the most promising innovations in health care today. It aligns well with capitalism’s principles. In a value-based model, orthopedic surgeons would be reimbursed based on the quality and outcomes of care rather than volume of services. The shift would incentivize surgeons to focus on what truly matters — improving patient outcomes and reducing unnecessary costs.
Capitalism can support the development of value-based care by fostering competition and innovation. Surgeons delivering the best outcomes at the lowest cost naturally attract more patients, while those who fail to meet quality standards will be forced to improve or exit the market. This creates a virtuous cycle of continuous improvement. A capitalist approach would encourage transparency in health care pricing and outcomes. Patients would be empowered to make informed decisions about their care. The transparency would further drive competition and improve efficiency of the health care system. The lack of transparency of hospitals and health care systems encourages a focus on perception, rather than evidence, in selecting care.
Health care at a crossroads
The future of health care in the United States is at a crossroads. The current system is trending toward a socialistic model emphasizing access and cost control, leading to unsustainable costs and declining quality. While socialized medicine may provide universal access, it is unlikely to modify the cost drivers responsible for the system’s fundamental problems.
A capitalist approach based on competition, innovation and efficiency should guide health care’s evolution. Through competition and value-based care, we can achieve the dual goals of reducing costs and improving outcomes, ensuring all Americans have access to high-quality, affordable health care. In this model, orthopedic surgeons would regain autonomy, patients would be empowered with choices and administrators would focus on business instead of indirect methods to influence care delivery. The health care system would become more sustainable and effective for future generations.
- References:
- Access to Health Coverage. Available at: https://www.cms.gov/pillar/expand-access. Accessed: Oct. 31, 2024.
- Catton E, et al. Arthroplast Today. 2024;doi:10.1016/j.artd.2024.101434.
- Fiore JA, et al. Health Aff. 2024;https://doi.org/10.1377/hlthaff.2024.00469.
- Roehr B. BMJ. 2011;doi:https://doi.org/10.1136/bmj.d65.
- For more information:
- Anthony A. Romeo, MD, is the Chief Medical Editor of Healio | Orthopedics Today. He can be reached at Healio, 6900 Grove Road, Thorofare, NJ 08086; email: orthopedics@healio.com.
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