The pandemic provided the healthcare industry with unprecedented challenges that exposed a system in desperate need of innovation and change.
The Center for Medicare and Medicaid Services developed a roadmap to shift the healthcare industry from a fee-for-service model to a value-based care model.
What is value-based care, and is it the future of healthcare?
We’ll look at value-based care, its benefits, challenges, and how it can benefit all healthcare participants.
What is Value-Based Care?
Value-based healthcare is a reimbursement framework that incentives healthcare providers to focus on the quality of service they provide versus the quantity.
Value-based models focus on healthcare providers being compensated for patient outcomes based on metrics like certified health technology, better preventive care, and lowering hospital readmissions.
What is the Key Focus of Value-Based Healthcare?
The key focus of value-based healthcare is transforming the health care system to create more value for patients.
The actual value in healthcare is a measured improvement in the health outcomes of patients compared to the cost of achieving that improvement. In this case, value is only created when a patient’s health outcome improves.
How Does Value-Based Care Work?
Under a value-based care system, the Centers for Medicare & Medicaid Services (CMS) would evaluate a healthcare provider on criteria like patient feedback on their experience, immunization rate, and Medicare spending per beneficiary.
Depending on how well the healthcare provider scores for population health management compared to established baselines. The CMS will penalize their Medicare revenue or reimburse them on top of their regular fee-for-service payments.
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How Does Reimbursement Work in Value-Based Care
While healthcare providers move from a fee-for-service structure to value-based care, several reimbursement approaches are available.
Pay for performance models often offer incentives based on quality and performance metrics beyond the fee-for-service schedule. For example, a value-based care model’s most critical quality metrics include patient focus, equitability of care, timeliness, efficacy & efficiency, and safety.
With advancement along the risk-reward pathway are bundled payments, shared risk programs, population-based payments, and capitated payments.
Benefits of Value-Based Care
Value-based care allows patients and healthcare providers to share data and work together to improve the overall healthcare experience while reducing medical costs.
Here are some benefits of having coordinated health care that uses data and technology efficiently to engage patients in health care.
Improved Outcomes from Value-Based Care
- Patients find it easier to navigate the healthcare system and have a better experience.
- There are fewer hospitalizations, readmissions, and emergency room visits.
- Early disease symptoms and risk factors are detected and addressed more quickly.
- More patients will seek preventive services like flu vaccinations, mammograms, and colonoscopies.
- Chronic diseases like diabetes, high blood pressure, and kidney disease are more likely to be diagnosed and controlled.
Disadvantages of Value-Based Care
The most significant disadvantage to value-based care is the increased regulations placed on healthcare providers. When the CMS or another government entity defines the terms of value-based care, it will ultimately restrict what providers will be able to do.
A second disadvantage is shared saving programs like bundled payments will be difficult for healthcare providers to implement. As a result, providers may have to invest their resources into the necessary tool to monitor quality improvements and the amount spent on care.
Why Healthcare is Migrating to a Value-Based Care System
Healthcare is migrating to a value-based model because it benefits all of the players in the healthcare system: patients, providers, and payers.
Patients will enjoy reduced out-of-pocket spending thanks to better coordinated, higher-quality care. They will also enjoy a less confusing system, allowing them to make more informed decisions.
Providers will drive meaningful changes in healthcare delivery because of financial incentives to improve the alignment and coordination of physician behavior.
Payers will enjoy the differentiated approach that will increase customer retention with higher-value, more affordable products while being recognized as advocates of enhanced health data.
How to Implement Value-Based Healthcare
If you are a healthcare provider, you can take steps to start implementing value-based care in your organization. The American Medical Association says there are five steps a healthcare provider can take to prepare their practice to implement value-based health care.
5 Steps to Implement Value-Based Healthcare
- Identify Your Opportunity and Patient Population
- Design Your Care Model
- IT Partners (Electronic Health Record Systems and Population Health Management Programs)
- Look to Drive Appropriate Utilization
- Try to Improve and Quantify the Impact of the Program Continuously
While these steps may seem straightforward, healthcare providers should look to transition from a fee-based system to a value-based model gradually. At the same time, they will need to navigate how they manage their revenue cycle.
How to Transition from a Fee-Based System
Even while many clinicians support the overall goals of value-based healthcare, there are many challenges to overcome to adopt these programs fully. For example, many healthcare providers might not have the staff or infrastructure to shift to value-based models.
Programs can also vary from payer to payer, with each plan having its own metrics, models, and documentation requirements.
Potential Barriers to Healthcare Providers’ Participation in a Value-Based System:
- A Delayed Payment Cycle and Length of the Program
- Compliance and Risk Concerns
- Convoluted Metrics
- Unattainable Goals
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Value-Based Care May Be the Right Move for Your Healthcare Organization
It’s rare in business when all parties can benefit from a paradigm shift from the status quo to a new payment model. However, value-based care can ultimately help patients, providers, and payers.
It’s not a matter of whether the healthcare industry will move to value-based care; it’s a matter of when.
Implementing a value-based care model will take time, and many potential roadblocks along the way could delay it.
Value-based care will force healthcare organizations to be more digitally enabled. AI Chat platforms like Clearstep’s Smart Care Routing™ will be an essential piece in helping to maximize the operating efficiency of healthcare systems. While also increasing patient satisfaction and retention.