Tim Carlon and Value Based Payments (Podcast #7)

Logan Brock, MS2

We had the chance to sit down with Tim Carlon, an MD/MBA student a few years ahead of us in medical school at Perelman. We got to speak about his passion, value-based payments. Tim taught Ryan and I about two models of value-based payments that are currently being piloted, accountable care organizations and bundled payments. He also told us about MACRA – a law that neither of us knew much (if anything) about before this conversation, which has huge implications for future physicians and how we will be paid.

Tim graduated from Duke University with a degree in biomedical engineering. While he originally thought he would pursue a Ph.D., Tim chose to go to medical school so he could see the effects that his work had on patients more directly. During his time in medical school, Tim discovered a passion for making the healthcare system function more efficiently, and he viewed value-based payments as the best way to do this. Tim spent this summer at Cigna, where he worked on value-based reimbursement.

Some major takeaways from our conversation:

1.) Value-based payment models will allow us to (finally) align the incentives of doctors and patients

While many people believe doctors are paid for providing quality care, this has only recently become the norm. Until the last decade or two, not only were payments not tied to quality, but lower quality care could actually benefit a hospital financially. For example, if a patient had a complication following a procedure, the hospital could profit from both the initial episode of care and from the readmission to deal with the complication. Value-based payment models, once they’re set up correctly, will allow us to much more effectively incentivize physicians to improve patient outcomes.

2.) MACRA is the bill you’ve never heard of that will define how physicians are paid

MACRA, the Medicare Access and CHIP Reauthorization Act of 2015, barely received any of the hype that seems to surround healthcare legislation in recent years. This is because the bill primarily affects doctors, and has much less impact on patients. As future physicians, however, this law will literally govern how we are paid. In addition to many much-needed changes – such as eliminating the annual “doc fix” – but it also links payments to quality metrics that must be reported starting in 2017. Over the next decade, performance on quality metrics will adjust payments up or down by up to 9%. This means a hospital or provider group with top scores on quality metrics could be paid nearly 20% more than one with the worst quality scores, for doing the same volume of work!

3.) He offered two suggestions for medical students to thrive in a value-based world

First, and not surprisingly, every medical student should become the best physician that they can. By working hard throughout medical school and residency, we can learn to provide great care to our patients. Second, and less obviously, we should be willing to be evaluated for the quality of our care, learn from these metrics, and identify areas to improve. As quality measures are rolled out, we will have the opportunity to self-reflect and identify areas where we can become even better doctors.


The metrics by which quality is measured will constantly be evaluated and improved, and physicians will have the opportunity to contribute to these discussions. In the long term, this system should allow us to (finally) pay for high-value medical care. The result could be a shift from “fee-for-service” to “fee-for-value.”


We’re excited to see where Tim goes next, and watch the value-based payment models that he is working on improve the US medical system!

– Logan is a second year medical student at the Perelman School of Medicine. He is the co-VP of curriculum for Penn Health-X, an occasional co-host of the Penn HealthX podcast, and  a contributor to the Penn HealthX blog. You can contact him at  john.brock@uphs.upenn.edu

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