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?