Value-Based Care is a game-changing advancements for patients and the providers who care for them. Value-based care is revolutionizing the healthcare industry and aligning incentives more and more each year. The concept of pay-for-performance, patient-centered care, and outcome measures have all been developed with the intention of providing more value to patients and healthcare providers alike. These new standards are also a response to the Affordable Care Act’s emphasis on cost containment and value in healthcare services. Therefore, it is no wonder that many hospitals and medical practices have adopted a value-based approach when considering how best to meet the needs of patients and the business needs that make care happen. However, navigating this new territory can be challenging without proper guidelines.
What is Value-Based Care?
Value-based care (VBC) is a system of payment designed to change the incentives for healthcare providers, so that they are rewarded for providing high-quality, cost-effective care. In VBC, providers are reimbursed based on the relative value of their services. The amount a provider is paid is based on the quality and outcomes of the services provided as well as their costs. Similar to the H and R Block tax model, providers are rewarded for going above and beyond what is expected of them. VBC providers are rewarded for providing high-quality and cost-effective care, whereas higher cost or decreased patient outcomes can result in financial penalties.
This is a significant change from the fee-for-service model that has long been the primary financial model for healthcare. In the fee-for-service model, healthcare providers are reimbursed based on the number, kind and cost of procedures and services provided to patients. More expensive procedures make providers more money, even when not medically necessary. And care that is shown to benefit the health of the patient but does not directly result in revenue for the practice is not financially viable and often gets overlooked (e.g. care-coordination, regular nurse follow-ups, ancillary services, nutrition, transportation, counseling, remote patient monitoring, and so many more).
The Basics of Value-Based Care
Value-based care is centered around the idea that quality and cost should be the focus in providing healthcare services. As such, it is the responsibility of healthcare providers to optimize the care they provide in terms of both quality and cost. This can be achieved by looking at the overall cost of care, rather than just the cost of the single procedure. The shift from volume to value in healthcare has been occurring over the past two decades. There have been many policy changes and legislative initiatives aimed at reducing healthcare costs by focusing on quality. Key indicators of the shift from volume to value include: The Balanced Budget Act of 1997; The formation of the Medicare Payment Advisory Commission (MedPAC); The creation of accountable care organizations (ACOs); The Affordable Care Act (ACA).
Key Strategies for Transforming to a Value-Based Care Environment
While the overarching goal of value-based care is to reduce healthcare costs while maintaining or improving quality, there are several strategies that providers can employ to make this transition.
- Look at the big picture: Value-based care requires providers to look at the big picture of healthcare costs, which includes both the costs of the care being provided as well as the costs of delivering the care itself.
- Focus on the patient: Value-based care should focus on patients and how they can expect to be treated. The focus should be on patient satisfaction scores and more personalized care.
- Improve the care delivery process: By improving the care delivery process, providers can reduce errors and make it easier for patients to receive the care they need.
Who Is Responsible for Value-Based Care?
A number of different stakeholders are responsible for enacting value-based care at each step along the continuum of care. At the patient level, patients themselves play a critical role in the success of VBC. Patients should be providing honest feedback on the quality of care they receive and the outcomes they experience. Healthcare providers are responsible for coordinating the collection of data, assessing the value of the care they provide, and reporting on the outcomes of their services. Finally, payors are charged with using the information from providers to make risk-adjusted payments.
Identifying the Right Measures and Outcomes
As previously discussed, VBC providers are reimbursed based on the relative value of their services. The amount a provider is paid is based on the quality and outcomes of the services provided as well as their costs. In order to determine the relative value of a particular service, providers must first select the appropriate outcome measures.
In selecting outcome measures, providers should consider the following:
- Is this outcome measure important to patients?
- Is this outcome measure accurate?
- Is this outcome measure feasible to collect?
Other Strategies to Consider: Staffing, Infrastructure and Technology
Beyond the strategy of selecting the right outcomes and measures for VBC, providers should also consider the following strategies when endeavoring to improve the delivery of quality and cost-effective care.
- Staffing: There are a number of strategies that providers can employ to improve staffing outcomes, such as considering the optimal staffing mix, providing on-the-job training, and leveraging digital technologies to improve efficiency.
- Infrastructure: In addition to factors such as the condition of the building, providers should also consider the functionality of their facilities, such as the accessibility of their services or the location of their facilities.
- Technology: Providers should also consider the technologies they have in place, such as EHR systems, scheduling software, HCC coding education apps, and diagnostic equipment.
There are many benefits to adopting a value-based care approach. VBC providers are beginning to see improvement in outcomes, such as fewer avoidable hospitalizations, reduced readmission rates, increased patient satisfaction scores, improved quality scores, and lower mortality rates. Furthermore, providers who embrace VBC are actually seeing bottom-line financial benefits, as they are rewarded for providing high-quality, cost-effective care. However, adopting a value-based care approach is not without its challenges. In particular, providers must be willing to take a critical look at their current practices and begin to change where necessary. Along the way, providers should be transparent with their patients about the changes they are making, the things that are being actively improved, and the over-arching WHY behind their shift to Value-Based Care.
Value-Based Care is a natural movement toward the benefit of the patient. And as providers make the shift, patients will be encouraged both by the motive behind the transition as well as the improvement in their overall health and the reduction in the costs of their care. Truly, Value-Based Care has the potential to be a significant win-win for patients and providers. And in the end, isn’t that why you spent all those years pursuing your medical training? Value-Based Care is for patients, and for the providers who care for them.