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
The shift to value-based healthcare will require numerous changes in the way our healthcare system is structured and in the way it operates.
Accomplishing these steps will be challenging, but at the same time, they will provide tangible benefits for every healthcare stakeholder.
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.”
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
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
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
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.