You Get What You Pay for: The Case for Value-Based Payments in Psychiatry

In his seminal 1966 study on medical quality (2), Avedis Donabedian segmented quality of care into three domains: structural measures for system capacity, process measures for the system’s actions, and outcome measures for the impact of the system’s interventions on health status. A key structural measure for behavioral health is the system’s ability to deliver collaborative care, creating an incentive to hire psychiatrists and case managers in the primary care setting. Structural measures can be a prerequisite to participate in a value-based arrangement. An example of a behavioral health process measure includes speedy access to care and follow-up after hospitalization for mental illness (Healthcare Effectiveness Data and Information Set Follow-Up After Hospitalization for Mental Illness). Process measures can serve as indicators of efficiency and engagement that can decrease future utilization and cost. Outcome measures are considered the gold standard, reflecting the culmination of structural and procedural measures of health. The most comprehensive strategy to measure the value of behavioral health services is a balance of structure, process, and outcome measures, because structure and process measures are early indicators of better outcomes and better overall health.

Modern value-based care payment models thus favor outcome measures, such as total cost of care or health outcomes for patients. Under a total-cost-of-care scenario, a behavioral health entity would be held accountable for the overall health of a population, which would allow providers to invest in preventive care and population health. This model would be most feasible in populations where the behavioral health diagnosis drives high costs: people with substance use disorders or severe mental illness. On the other hand, a focus on patient outcomes may be more appropriate for mild-to-moderate behavioral health conditions.

Medical providers in value-based payment arrangements may be held accountable for appropriate glycemic control among patients with diabetes. Psychiatry currently does not have analogous laboratory tests to provide an objective assessment of health. Value-based behavioral health care can instead measure treatment effectiveness with patient-reported outcomes (e.g., in patient health questionnaires) or clinician-observed outcomes (e.g., positive and negative symptoms scales) as part of measurement-based care or the systematic administration of validated scales to measure psychiatric symptom severity. Despite the evidence base supporting the effectiveness of measurement-based care, behavioral health care providers have been reluctant to adopt symptom rating scales in practice (3). Payers also face barriers to the collection of clinical data from sources outside of utilization information from claims. A payment incentive, aligned with evidence-based clinical care in a value-based system, may help drive better scale utilization and data collection.

Behavioral health care providers contribute immensely to the care of the most vulnerable and challenging populations but with little economic incentive. Psychiatry remains in the lowest third of physician specialty salaries, with other behavioral health professionals such as social workers and counselors trailing even further. This disparity leads the health care system to further undervalue this critical work, as hospitals invest in highly reimbursed procedural specialties in a fee-for-service system. Although the relationship between high-quality behavioral health and total cost of care is well established, payers predominantly reward behavioral health providers for volume of services rather than outcomes.

Value-based care motivates evidence-based clinical practice through incentives. Rather than prescribing treatment modalities or controlling costs through prior authorizations and utilization management oversight, payers should allow behavioral health providers to apply appropriate evidence-based treatment to achieve desired results. Incentives drive practice transformation. Encouraging the use of measurement-based care facilitates systems to invest in training to improve clinical expertise and skill. Additional payments can also lead to improved workflows, higher patient engagement, and sophisticated technology to improve efficiency and communication (4). Care coordination and management between appointments can help patients stay engaged and lead to better outcomes.

Focusing on carefully curated outcome measures incentivizes the behavioral health providers to take on the highest-acuity patients (e.g., those with the most significant opportunities to improve) and decreases the opportunity to game the system through improper use of process measures or cherry-picking (i.e., selecting patients to demonstrate an inflated quality performance). Incremental progression to value-based behavioral health care gives providers an opportunity to succeed, motivating improvement against a matched set of peers or clinical benchmarks.

Success in value-based behavioral health care requires the full partnership of affected stakeholders, including payers and providers of primary and behavioral health care. Aligning expectations and metrics across different populations—ranging from patients with commercial insurance to those with Medicare and Medicaid and from adults to children—encourages behavioral health providers to engage in the practice transformation needed to improve outcomes. Many behavioral health providers are familiar with pay-for-performance models introduced through managed care. However, their voices have often not been heard during the development of primary care–focused models. Behavioral health providers should have a seat at the table and can provide important considerations when selecting quality measures, determining whether and how to conduct data exchange, or evaluating the utility of a third-party vendor to support a program.

Primary care providers play a critical role in the identification and treatment of many people with behavioral health conditions. The development of accountable care organizations (ACOs) allows payers to hold primary care providers responsible for behavioral health outcomes or total cost of care (5). ACOs that are held accountable for behavioral health screening and referral, medication adherence, and total cost of care will make investments in integrated care and technology solutions that leverage population health analytics and support collaborative care. In turn, these ACOs will reap the benefits of high-quality behavioral health specialists who quickly and effectively treat mutual patients in the outpatient setting. Although patients with severe or chronic behavioral health conditions should receive case management from behavioral health specialists, primary care plays a critical role in managing co-occurring conditions and participating in collaborative care.

The transition to value-based reimbursement is happening quickly throughout health care. The return on investment for psychiatric services can take time, but it is critical for improving overall health and reducing costs in an increasingly competitive insurance marketplace. Value-driven payment models should be designed to address a variety of behavioral health conditions managed in their appropriate respective setting. Psychiatry should embrace this trend and use a value-driven business approach for high-quality behavioral health care as a mechanism for improving overall health and reducing total cost of care.