How Value-Based Care Benefits Patients, Providers, Payers, and Society

A group of doctors and nurses in a team huddle
Blog Posts  |  26 March 2021  |  By Amanda Cohen, MPH

Written By: Amanda Cohen, MPH, Cheryl Reifsnyder, PhD

According to the New England Journal of Medicine Catalyst, value-base care is defined as “a healthcare delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes.”1 That is, providers are compensated for tangible improvements in patients’ health, decreases in chronic disease, and increases in their capability to live functional lives. Value-based care differs from fee-for-service care. In fee-for-service care, healthcare providers are paid based on the amount of healthcare services they deliver rather than the quality of those services.1, 2 Generally, value-based healthcare is also defined as care that provides increased quality per dollar spent.3

Numerous healthcare providers in the United States are working to transition from fee-for-service to a value-based healthcare reimbursement model. Experts say that value-based healthcare is one of the most important topics in healthcare transformation today.4 It is clear that this shift to value-based healthcare will create numerous changes in the healthcare system.

In this article, we discuss how value-based healthcare benefits not only patients, but also healthcare providers, payers, and society as a whole.1

Value-Based Healthcare: A Catalyst for Change

The shift to value-based healthcare will require numerous changes in the way our healthcare system is structured and in the way it operates.

  1. The transition to value-based healthcare requires healthcare systems to segment patients into groups according to health-related needs.4, 5
  2. It requires healthcare providers to reorganize into interdisciplinary teams to address the needs of these patient groups.3, 5
  3. Each integrated team will need to design ways to measure both meaningful health outcomes for their patients along with the cost of the services they provide. The idea is to use this information to help improve both quality and efficiency.3-5
  4. The transition will also require an upgraded IT system, one that enables consistent and efficient data collection, expense tracking, and communication among healthcare providers.3, 4
  5. It requires both providers and payers to change the way they bill for patient care.4, 6

Accomplishing these steps will be challenging, but at the same time, they will provide tangible benefits for every healthcare stakeholder.

Value-Based Healthcare Benefits Patients

Patients are probably the most obvious beneficiaries of value-based healthcare. In fact, value-based healthcare’s primary goal is to deliver value to patients.4 But what does “value-based healthcare” mean for the patient?

“Value” in value-based healthcare means care that focuses on the outcomes that matter most to patients—that is, care that is aligned to how patients experience health. An article in Academic Medicine describes value in terms of “capability, comfort, and calm.”

  • Capability refers to patients’ ability to participate in life in a way that makes them feel fully themselves.
  • Comfort refers to the relief of physical and emotional suffering.
  • Calm describes whether patients can live normal lives while they are receiving care.5

Perhaps the primary way patients benefit from value-based care is that they will experience better health outcomes, not just in one isolated area of illness, but across the full spectrum of comorbidities and side effects that accompany their illness.1, 5

Value-based healthcare encourages the healthcare system to solve patients’ needs, rather than treating only the presenting illness. For example, a patient with diabetes is likely to need the coordinated services of multiple different clinician types. In addition to diabetes, he or she may be affected by hypertension, experience kidney disfunction, or neuropathy. When the goal of healthcare shifts to solving patients’ needs, clinicians begin to identify gaps in their care and coordinate with other care team members to manage each patients’ needs. They also begin to identify nonclinical opportunities—such as weight loss and diet—that can undermine the patients’ health if left unaddressed. The result is that caregivers broaden and integrate their services, leading to better health outcomes.1, 5

Usually, under value-based care, healthcare practices can provide all these improvements to patients at lower costs. In fact, experts on the topic of healthcare transformation believe that value-based healthcare is critical for controlling the rising healthcare costs in the United States.1, 4, 5

Value-Based Healthcare Benefits Providers

Patients are not the only ones to benefit from value-based healthcare. Caregivers benefit as well. One key area of benefit is clinician burnout.5, 7

The rising rate of clinician burnout has become a major issue in our nation’s healthcare system. Burnout is currently estimated to affect nearly half of practicing physicians. It has been shown to increase rates of sickness and substance abuse; it is also associated with higher rates of depression and suicide. Clinician burnout affects patients as well as healthcare providers. Recent studies have shown that burnout is linked to a poorer quality of care and an increased risk of safety incidents.7

Value-based healthcare is a powerful method for countering physician burnout. That’s because value-based healthcare implements several key changes to the practice of healthcare that help to fight burnout. For instance, one common complaint physicians raise in a fee-for-service environment is the high volume of documentation they must produce. The time and energy physicians spend on administrative work and charting takes time away from patient care. The value-based healthcare system decreases the administrative burden on physicians. Value-based healthcare consolidates payments and paperwork by providing global payments to cover entire episodes of care, rather than billing for each procedure and test individually.7, 8

The team-based approach also increases caregiver time with patients. Physicians can spend more time focusing on their area of expertise, rather than handling tasks better suited to other team members.7 In addition, value-based healthcare leads to better care efficiencies, another change that gives clinicians more time to focus on patients.1, 5

The net result of these changes: Value-based healthcare returns clinicians’ focus to their purpose as healers. It improves the overall physician experience.5

Value-Based Healthcare Benefits Payers

Like healthcare providers, payers benefit from the decreased administrative burden offered by value-based healthcare. Decreased time and energy managing paperwork translates directly to money saved.8, 9

Payers benefit from financial savings in other ways as well. First, a value-based healthcare system provides them with stronger cost controls with respect to paying for patients’ services.1 That’s because value-based healthcare results in better outcomes for patients. Better outcomes reduce healthcare spending by decreasing patients’ needs for ongoing care.5 The result is that payers have to pay out less money for the services used by their clients.10

Another benefit for payers is that value-based healthcare reduces client risk. Value-based healthcare focuses on preventative care rather than just treatment of the presenting illness.2 This leads to a population that is healthier overall, with fewer chronic conditions. A healthier patient population requires fewer services, leading to lower costs.2, 10

Value-Based Healthcare Benefits Society as a Whole

When value-based healthcare becomes the common model for healthcare, society as a whole will benefit in multiple ways.1, 5, 10 Healthcare quality will improve. At the same time, the per capita cost of healthcare will decrease.1, 5 These, plus value-based healthcare’s focus on patient wellness and preventative medicine, lead to what is, perhaps, value-based healthcare’s most significant consequence: It improves the overall health of the general population.1, 5

Wherever you sit along healthcare spectrum, Veradigm is positioned to help you advance the transition to value-based healthcare and gain maximum benefit from the process. If you would like to learn more about how we can help, please contact us.


  1. NEJM Catalyst. What Is Value-Based Healthcare? NEJM Catalyst website. Updated January 1, 2017. Accessed March 1, 2021,
  2. Moriarty A. 3 Benefits of Value-Based Care. Definitive Healthcare. Updated August 14, 2019. Accessed March 6, 2021,
  3. MEDEC Canada’s Medical Technology Companies. Value-Based Healthcare: Quick Guide Version 1. 2021.
  4. Porter ME. Value-Based Health Care. Institute for Strategy & Competitiveness, Harvard Business School. Accessed March 2, 2021,
  5. Teisberg E, PhD, Wallace S, JD, MBA, O’Hara S, MPH. Defining and Implementing Value-Based Health Care: A Strategic Framework. Academic Medicine. May, 2020 2020;95(5):682-685. doi:10.1097/ACM.0000000000003122
  6. Brown B, Crapo J. The Key to Transitioning from Fee-for-Service to Value-Based Reimbursement. 2017:1-7. 2017.
  7. ChenMed News Staff. How a Value-Based Care Model Helps Reduce Physician Bunout. ChenMed Updated February 4, 2020. Accessed March 7, 2021,
  8. Dougherty J. The Administrative Benefits of Value-Based Care. Updated January 4, 2020. Accessed March 6, 2021,
  9. Aetna. Better health at lower costs: Why we need Value-Based Care now. 2019. Accessed March 6, 2021.
  10. South Shore Orthopedics. What are the Benefits of Value-Based Healthcare? South Shore Orthopedics. Updated January 29, 2020. Accessed March 7, 2021,
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