Documentation of why 'volume to value' is failing us

Transformation of the Health Care Industry: Curb Your Enthusiasm?

By Lawton R. Burns and Mark V. Pauly
The Milbank Quarterly, March 5, 2018

Policy Points

* Policymakers seek to transform the US health care system along two dimensions simultaneously: alternative payment models and new models of provider organization.

* This transformation is supposed to transfer risk to providers and make them more accountable for health care costs and quality.

* The transformation in payment and provider organization is neither happening quickly nor shifting risk to providers. The impact on health care cost and quality is also weak or nonexistent.

* In the longer run, decision makers should be prepared to accept the limits on transformation and carefully consider whether to advocate solutions not yet supported by evidence.



There is a widespread belief that the US health care system needs to move “from volume to value.” This transformation to value (eg, quality divided by cost) is conceptualized as a two‐fold movement: (1) from fee‐for‐service to alternative payment models; and (2) from solo practice and freestanding hospitals to medical homes, accountable care organizations, large hospital systems, and organized clinics like Kaiser Permanente.


We evaluate whether this transformation is happening quickly, shifting risk to providers, lowering costs, and improving quality. We draw on recent evidence on provider payment and organization and their effects on cost and quality.


Data suggest a low prevalence of provider risk payment models and slow movement toward new payment and organizational models. Evidence suggests the impact of both on cost and quality is weak.


We need to be patient in expecting system improvements from ongoing changes in provider payment and organization. We also may need to look for improvements in other areas of the economy or to accept and accommodate prospects of modest improvements over time.

From the Conclusion

In conclusion, analysts and advocates may need to come to terms with the likelihood that the triple aim cannot be achieved over the long term. Rising real incomes for consumers and technical progress in discovering health‐improving but cost‐increasing new technologies may mean that cutting spending growth rates much further is not a practical goal. We may need to have more realistic expectations that, for example, the kind of high‐value but cost‐increasing care that led to dramatic improvements in cardiovascular health may be the best we can expect, and along with these improvements we should expect continuation of spending growth at an uncomfortable but not breakaway pace.

The transformation from “volume to value” in health care at this point appears to be driven more by ideology and aspiration than by evidence. To date, APMs show limited improvements in quality and even more limited reduction in costs. If improving quality does not consistently lead to lower costs but only to better health outcomes, we need to rethink the triple aim, tolerate a time when we get more health than wealth, and continue to search for other undiscovered strategies of cost containment.



By Don McCanne, M.D.

This well researched analysis (182 references!) reveals that all of the attention given to transforming our health care system from "volume to value" is misguided primarily because it is driven by ideology and aspiration rather than by evidence.

The data we do have on accountable care organizations (ACOs) and alternative payment models (APMs) have thus far failed to show greater accountability through risk transfer to providers, and thus there has been only a negligible impact on health care cost and quality. New models of provider organization through vertical and horizontal integration have failed to provide significant improvements in the triple aim (care, health and cost).

The reason this failure is so important to understand is that the attention of policymakers, politicians, and the industry has been diverted to these ineffective but intrusive, administratively wasteful, and sometimes expensive interventions while ignoring proven policies that not only would improve quality and control costs but would also address other important goals of reform that are being neglected such as universality, accessibility, efficiency, and equity. Of course, those goals would be achieved by enacting and implementing a well designed single payer national health program - an improved Medicare for all - though the authors of this article do not venture there.

The publisher has allowed free access to this article. Although long (53 pages) it is worth downloading (at least the link) to use as an explanation to incrementalists and others of just why the the misguided campaign for volume to value needs to be set aside so that we can move forward with proven policies that will ensure quality health care for everyone.

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