Promises and pitfalls of value-based reimbursement in healthcare : A mixed method health economic approach

Abstract: Financial incentives can be an effective tool to influence behaviour in almost any context and healthcare is no exception. The healthcare market is, however complex, characterised by uncertainty, information asymmetry and multiple agency connections. The reach and limits of financial incentives in healthcare has been widely debated for decades. Some argue that financial incentives increase efficient use of scarce resources, while others voice that it provides a hotbed for unintended and unethical behaviour. A well-functioning value-based reimbursement programme (VBRP) should facilitate alignment between financial incentives and professional values to secure both efficient and equitable healthcare. This thesis explores the promises and pitfalls of value-based reimbursement in the context of a value-based reimbursement programme within elective spine surgery in Region Stockholm, Sweden. By using mixed methods, this thesis explores what incentives arise from introducing a value-based reimbursement programme and how these incentives affect the provision of healthcare services. This thesis consists of four papers. Paper I examines the performance of healthcare providers (spine surgery clinics) on patient-reported outcome measures after the introduction of a value-based reimbursement programme and whether it has any effect on case mix regarding clinical and socio-economic factors. Paper II examines how a value-based reimbursement programme affects the cost of elective spine surgery to a third party payer/regional authority. Paper III explores how the intended incentives of the reimbursement programme was perceived by healthcare providers. In Paper IV, institutional logics within healthcare-providing organisations are identified and how their centrality and compatibility affect the institutionalisation of a value-based reimbursement programme in Region Stockholm. The results show that the VBRP had no effect on patient-reported outcome measures but decreased the mean cost per surgery. Thus, elective spine surgery in Region Stockholm may be considered more effective after the introduction of the VBRP. The removal of a production ceiling allowed healthcare providers to surgically treat more patients than was previously possible. The volume increased by 22 per cent, and the total cost increased by 11 percent. No indications of discrimination against sicker patients were found. A higher value was generated in elective spine surgery after the introduction of the VBRP. The idea of a VBRP was aligned with professional values. However, not all incentives were perceived as intended. The focus on minimising costs of post-discharge care was perceived to have a negative impact on quality aspects of physiotherapy and nursing.   Taken together, a well-designed VBRP has the potential to promote a holistic healthcare perspective through 1) the level to which healthcare providers are held accountable for healthcare provision that increase the willingness to collaborate across healthcare providers and medical disciplines, 2) a better overall picture of patients healthcare utilisation and 3) challenging the traditional structures and ideas within healthcare that quality foremost depends on the performance of physicians. However, there are also challenges that needs to be addressed, 1) functioning routines for communication and follow-up between healthcare providers and the regional health authority, 2) to get different professions within a traditional hierarchical organisation to cooperate on equal terms, and 3) to create IT systems that create transparency and an understanding of the reimbursement programme. Continuous communication between healthcare providers and the regional health authority is therefore crucial to make the incentives of the reimbursement programme meaningful.