Health care is an expanding and convoluted industry. There are many moving parts coming together to help patients, providers, and health care professionals behind the scenes. From appointment scheduling and health care data to prescriptions and health insurance, the health care industry encompasses more than many may realize. And the winds of change are upon it.
Value-based care is one health care model that’s creeping into conversations of medical professionals, rivaling the model of present day — a fee-for-service system. You may be wondering, what is value-based care? How does it differ from the current health care model? What effect would it have on health care as we know it?
Keep reading as we dissect value-based care to learn what it means for providers, patients, and the health care industry as a whole.
What is value-based care?
You’ve heard the term, but you want to know: What is value-based care, exactly?
“Value-based care is a health care delivery model where providers are paid based on successful outcomes rather than for individual services,” explains Ted Chan, founder and CEO of CareDash, a doctor review website. “At its very best, value-based care is a patient-centric model that both saves money and improves outcomes.”
“At its very best, value-based care is a patient-centric model that both saves money and improves outcomes.”
Chan goes on to explain that in a value-based care model, providers are rewarded for things like successful surgical procedures, reduced effects and incidences of chronic disease, and measurably healthier lives. In value-based care models, it’s all about the quality of care rather than the quantity of services provided. It’s a patient-centered approach that has its benefits as well as drawbacks.
How would value-based care work?
You may be wondering how value-based care would actually work. How does it differ from the fee-for-service care we’re accustomed to today?
Imagine you just underwent knee-replacement surgery. In today’s fee-for-service model, your insurance would be billed for each individual item, including:
- The surgery itself
- The pre-operative appointments
- The anesthesia
- The hospital room
- The knee implant
- The pain medication after the surgery
- The post-operation costs, such as hospitalization for an infection
These costs are all standard. They are not dependent on whether the surgery went well or not.
On the other hand, in a value-based care model, the cost would consist of a single charge for the knee surgery as a whole. After the knee surgery, the following metrics would be examined: Was there an infection, readmission, or another surgery? Did the patient experience continued pain after? In a value-based model like this, health systems that can provide cost-effective care with positive outcomes will profit, Chan explains.
“Value-based care has great promise.”
“Value-based care has great promise,” says Dr. Doug Jorgensen, CEO of Patient360. “There’s a lot that could be done. If implemented appropriately, it’s quite possible that providers could make better money and, at the same time, have better outcomes for patients.” He believes more time with a doctor is an almost-foreign idea to patients, but they shouldn’t feel rushed when it comes to the care they’re receiving.
As you can see, value-based care models put positive patient outcomes at the heart of practice. Providers with positive patient outcomes will profit in this model. But what is holding the US back from implementing this patient-centric approach to health care?
What’s preventing value-based care models?
Becoming more cost-effective and providing better results sounds like a win-win for providers and patients. But the transition to value-based care isn’t so simple. Logistically, it’s actually quite complicated. And if not done right, value-based care yields high risks to providers and health care facilities.
“Talking to players all across the health care ecosystem, including physicians, payers, health systems, and patients, value-based care makes sense to everyone, but the devil is in the details,” Chan says. “To be successful, providers must be able to measure outcomes and cost. They must agree with payers on what the metrics are going to be to measure quality. Then they need to price that, without creating adverse risk in the selection of patients.”
“To be successful, providers must be able to measure outcomes and cost.”
A potential pitfall of value-based care is that high-risk patients could be turned away. Similar to actuarially based insurance, doctors would need to outweigh a high-risk patient with enough healthy ones, Dr. Jorgensen explains.
Additionally, some areas of health care need further advancement before value-based care can fully take hold. Take for instance, how patient outcomes are measured. A value-based care system would rely on this information in order to evaluate services and billing.
“At its core, value-based health care should be highly data-driven,” Chan says. He adds that health systems and insurers need to improve their ability to collect data, measure outcomes, and optimize for this to truly drive cost reduction while improving care. “Health care needs to continue adding measurement and analytics capabilities to accelerate value-based care,” he believes.
“At its core, value-based health care should be highly data-driven.”
Transitioning to a value-based care system would also be a large undertaking in the way providers operate and get paid. If done wrong, physicians could potentially make less than they did 20 years ago, Dr. Jorgensen says.
“In our current system, reimbursement is focused on volume, procedures, and diagnostics. If we do more, we make more money,” Dr. Jorgensen explains. For example, he recalls a physician he knew who had trouble diagnosing a patient. The patient returned three times before he was able to get it right, and the doctor was paid all three times.
“This is the classic paradigm that people find wrong with the current system,” Dr. Jorgensen says. Despite all the barriers to adopting a value-based care system, many in the health care industry still see it as the optimal way to provide care for patients.
“Everyone wants value-based care to work,” Dr. Jorgenson says. “We want to think it’s the best way to take care of patients. Physicians like the idea of being able to be more preemptive with patients within a value-based care system.”
Health care’s next frontier
So what is value-based care and what could it mean for the future of health care?
It’s putting patient outcomes first. It’s holding providers to a standard of excellence — one that is backed by data. It’s optimizing the health care industry to streamline doctors’ rushed days and allow patients the time they need with their providers. And it holds great potential to change the health care industry for good.
Value-based care has become a hot topic of discussion and debate. But health care models are not the only topics of conversation. The medical field is facing another challenge in the coming years: doctor shortages. See what it means for patients and providers alike by checking out our article, “Is There Really a Shortage of Primary Care Physicians? A Closer Look at the Claims.”