EP359: Value-Based Payments—You Get What You Pay For, With Dan O'Neill

Why Value-Based Payments Don't Always Change Care Delivery, With Dan O'Neill. You Get What You Pay For: Why Most Value-Based Contracts Don't Change Physician Behavior. Episode 359. Stacey Richter talks with Dan O'Neill, chief commercial officer at Pine Park Health, about the gap between value-based payment models and the value-based care they're supposed to incentivize—and why so many contracts fail to change anything because the physicians actually making care decisions are still paid on FFS-style incentives underneath. WHAT YOU'LL LEARN ✅ Why a value-based payment model and value-based care are two distinct things—and why changing one without the other accomplishes nothing ✅ A litmus test for whether a value-based program is meaningfully changing care: check whether participating physicians are still paid via FFS incentives like RVUs ✅ The four gradations of value-based payment, from pure fee-for-service to full global risk ✅ Why insurers and IPAs need to clear a genuine path, not just a token option, for providers who want to move to value-based care ✅ How Goodhart's Law applies to value-based metrics: once a measure becomes a target, it stops being a good measure ✅ Why organizational change toward value-based care is exceedingly difficult even when the financial case is clear WHY THIS MATTERS Changing the payment model without changing physician-level incentives just adds administrative complexity without changing outcomes—value-based payments only work when the behavior change actually reaches the clinician making care decisions. O'Neill's framework gives employers and payers a concrete way to check whether their value-based contracts are real or just relabeled fee-for-service. MENTIONED IN THIS EPISODE EP351 with Eric Bricker, MD: Apple Podcasts | Spotify | Other Apps === LINKS === 🔗 Show Notes with all mentioned links: Episode Page ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 📺 Subscribe to our YouTube channel 🎤 Listen on Apple Podcasts 🎤 Listen on Spotify === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction. 05:06 What is the spectrum of value-based contracts? 07:24 Why don't value-based contracts at the organizational level always trickle down to the provider level? 11:25 What are the two things that need to happen to drive outcomes in value-based healthcare? 15:24 How do insurers play into improving value-based contracts? 19:46 "There's a strong case to actually clamp down on prices." 23:47 "Right now, we're still in a place where if you want to do something other than fee for service … you have to fight like hell." 24:03 What's the first step to making value-based contracts more accessible? 24:27 What's the second step to making value-based contracts accessible? 25:23 Why are the incentives to change American healthcare pretty weak? 27:10 "Organizational change is just exceedingly difficult." 28:45 What should you do if you want to start pushing organizations toward value-based contracts?