The Benefits of Value Based Healthcare

You walk into your doctor’s office for a routine annual exam, and in the process, your doctor informs you that you need additional tests completed. These include other blood work to screen for a Vitamin D deficiency, your first colonoscopy and an eye exam.

While these test may seem excessive at first blush, you soon realize that your medical doctors are working in unison to keep you as healthy as possible for as long as possible.

Historically, we saw our physicians and medical care team when something happened, and not for preventive care.

Value-based medicine changes the healthcare model to emphasize prevention.

Value-Based Care: better care — better health — lower costs

Enter value-based healthcare.

Value-based healthcare is an emerging market area that works to address rising health care costs by reducing clinical inefficiency, and duplication of services and coordinating care throughout the healthcare spectrum.

Value-based healthcare enables consumers to get the care they need, when and how they need it.

In value-based healthcare models, doctors and hospitals are paid for helping keep people healthy. Their reimbursement or payment based on using evidence-based, cost-effective, proven care regimens to improve the health of patients with chronic conditions.

Today, health insurance payers are increasingly basing reimbursements on the quality of care provided, not just the number and type of procedures.

However, what does that mean for you?

This is a complete change of healthcare delivery from the traditional fee-for-service approach.

In the fee-for-service, doctors and hospitals were paid based on the number of health care services they deliver, such as office visits, tests, and procedures. Payment has little to do with whether their patients’ health or medical outcomes.

A value-based approach designed and focused on the patient. Clinicians collaborate in the same way for all patients, with the goal to eliminate unnecessary tests, duplicate tests (e.g., blood tests and similar) and coordinate care to ensure that the patient is receiving preventive care regardless of who the payor is.

Medical care teams focus on the individual needs, be it preventive, chronic or acute needs.

As a patient, you benefit from a medical care team that coordinates care and utilizing technology connecting patients and providers with information to help you get the right care — regardless of the specialty or diagnosis within the health care system.

Value-based care focuses on proactive care — both preventive and with chronic conditions- with an emphasis on keeping people healthy.

This reduces if not eliminates the fee for service reactive care model where healthcare was delivered in response to an injury or illness.

Value is the new standard for health insurance companies and healthcare providers, and reimbursement based on quality and patient health outcomes and health improvements.

What Models are Available for Value-Based Healthcare?

The consumer experience is enhanced as the consumer is a valued and engaged, member. The entire healthcare experience is centered around the patient and is supported by enhanced and improved coordinated care team.

Every value-based healthcare model is meant to deliver better health, in a more affordable manner

As a result, data can now be analyzed across a healthcare provider’s organization to identify specific health risks, improve opportunities for care coordination, cost reductions, the ability to eliminate duplicative tests and to enhance the organization’s operations.

  • Accountable Care Organization (ACO). Accountable care organizations are changing the delivery of healthcare. By paying doctors and health systems based on the outcomes and success at improving overall quality, cost and patient satisfaction with their healthcare experience. ACOs are groups of doctors, hospitals, and other healthcare providers that coordinate and deliver care for their patients. In an ACO, healthcare providers are responsible for improving the quality of patient care and health outcomes, at an equal or lower cost, through better coordination and preventive care. Health plans team up with doctors and health systems to provide experience in managing financial risk, enhance clinical care management expertise, coupled with clinical data, health technology ranging from EMR’s to enhanced care models that connect providers with other providers, health plans, and patients. Health systems and providers that manage the health of the entire population successfully are rewarded with improved patient health and outcomes. The risk of an ACO is if they do not improve quality and control the cost of care, healthcare providers may lose money. From a patient perspective, a team of providers is incentivized to work together with a common goal to keep you healthy, and any disease states managed.
  • Patient-centered medical home (PCMH). A PCMH is a care model led by a primary care doctor that is focused on providing enhanced care coordination across the healthcare spectrum. In a PCMH, a primary care doctor acts as the captain of the ship and leads the clinical team that oversees the care of each patient in a medical practice. The medical practice receives health data about their patients’ quality and costs of care so that they can work together to improve healthcare delivery. Utilizing specific quality measures as performance indicators, financial incentives are aligned with clinical outcomes. This results in improved access to care, improved coordination of care and better health outcomes. Practices that improve quality and efficiency measures share in the savings they create. In this value-based healthcare model, patients receive improved coordination of care, medical appointments are readily available and time with physicians is improved. This alone leads to better communication, which may reduce adverse events.
  • Pay for performance (P4P) Controlling costs while improving or maintaining quality is the model behind pay for performance. A coordinated team of doctors, hospitals, and health plans work together to develop and implement a set of quality and efficiency measures. A portion of the physician’s or hospital’s usual fee-for-service payment is at risk by emphasizing performance improvements. By meeting or exceeding the performance measures, the payment that had been put aside as an incentive for improved care is paid out. If they fail to meet the agreed upon standard, they lose the payment. While still a fee-for-service model, this very fundamental value-based model encourages quality elimination of duplication of testing and other.
  • Bundled payments. In a bundled payment healthcare model, a single annual or semi-annual payment for all services with an episode-of-care, such as a cardiac catheterization, oncology treatments, or hip replacement is made to doctors or healthcare facilities for all services associated with the care provided. “Bundled payment rates” are determined based on the historical costs expected for a particular treatment, they include all costs for any preventable complications that may arise. For example, post-treatment infections, the cost of treatments are included in the bundled payment. Healthcare providers are at risk for adverse events. These payment models promote a coordinated, efficient and cost-conscious effort for specific procedures, disease-states or health conditions. In this model, fewer tests are repeated, “overtreatment” declines, hospital readmissions and length of hospital stays go down.

Value-based care can look different depending on type your doctors and hospital are part of. Most patient is not aware of the financial model tied to their healthcare.

These value-based payment model will continue to improve and evolve as we learn more and gain additional clinical data and outcome data.

Getting consumers involved in and understanding the models of healthcare delivery, engaging them to take action on their health is a critical component of value-based care.

As payment and clinical models evolve, health plans will continue to work with doctors, hospitals, and other providers to help build a better healthcare system, with improved health outcomes, more efficient care and improved costs for all.

Originally published at on August 21, 2017.

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