If you work with healthcare at all, you’ve likely heard the phrase value-based care. But what does it really mean? At its most basic, value-based care means improving patient outcomes at an appropriate cost. From that definition, it seems as though value-based care should be the default for healthcare, but unfortunately it’s proved difficult to fully implement because of the current model in place. Many healthcare reform advocates have been championing for years that “healthcare needs to change,” but if we want the system to really improve, we must begin by providing real value to patients when they receive care.
One of the biggest challenges to fully adopting value-based care is the reimbursement model most providers and payers use: fee-for-service (FFS). Through this model, providers are reimbursed for all the different “services” (procedures, therapies, medications, etc.) they provide for a patient whether it actually helps the patient or not. This creates an incentive to increase the number and price of services provided to patients and can lead to unscrupulous facilities “up-charging” to the most expensive services. Despite this, it’s the model that’s been used by everyone for years and is considered the norm; and sadly, there are big resistances to leaving the norm.
Thankfully, there are some people wising up to alternative payment models that focus on providers being reimbursed based on patient outcomes. CMS (Centers for Medicare & Medicaid Services) required skilled nursing facilities to switch to a patient driven payment model in 2019, and there are even private insurers such as Blue Cross and Blue Shield of North Carolina that are beginning to offer incentives to primary care practices that shift away from the fee-for-service model.
Value-based care matters for several reasons: one of the main ones being that it reduces overall healthcare costs for multiple parties. The Total Care Network reduced care costs by 32% in the first part of 2018 thanks to value-based care models. The models were beneficial to patient care too, since they reduced hospital admissions by 10-15 percent. Humana also found that its value-based care programs cost 15 percent less than its fee-for-service model.
The biggest benefit to value-based care is that it truly puts the patient’s needs back into the center of healthcare. Following this model, the goal is to get the patient the right care at an affordable cost. Rather than trying several different medications, specialists, therapies, and procedures, time is put in to find the right care plan early on. Increasing quality of care is beneficial to providers too because it saves them time, helps them meet target goals, and can financially reward them by increasing demand for their practice.
We think one of our previous special guests, Dr. Mahek Shah, broke it down very well into four parts. He believes that:
It can be difficult to shift an entire healthcare system to a new model, but individual programs have started doing it over the last few years and shown great success. As more leaders and advocates successfully implement the pillars of value-based care, it will spread until finally healthcare centered around quality and low cost is the new status quo.
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