Value-Based Care and How it’s Changing Healthcare
Written by: Auren Weinberg M.D., M.B.A.
Value-based care (VBC) ties healthcare provider income to the results they deliver for their patients, as opposed to the “fee-for-service” model, in which providers are paid based on the quantity of services they provide.
Value-based payment models are gaining traction in the U.S. According to the Health Care Payment Learning & Action Network’s annual measurement of participation in alternative payment models, slightly over 60% of 2020 healthcare payments included some form of quality or value component—up from 53% in 2017 and 11% in 2012.
This broad change in payment models is transforming our healthcare system and has a significant impact on the future of healthcare.
Financial transformation
The traditional fee-for-service payment model likely has long contributed to ballooning healthcare costs in the U.S. Increased costs are not always associated with improved healthcare outcomes. The U.S. has the lowest life expectancy compared to high-income countries such as Australia, Canada, and the United Kingdom. The U.S. also has the highest chronic disease burden, highest number of preventable hospitalizations, and highest rate of avoidable deaths when compared to these other high-income countries. Yet, U.S. healthcare spending is nearly twice as much as the average country in this group.
Fortunately, many of the changes created by VBC can lead to cost savings. For instance, VBC has encouraged the use of digital medicine, which can deliver care at a lower cost. VBC also encourages team-based care, which enables hospitals, physicians, and other healthcare professionals to work together to provide the most effective care at the lowest possible cost. This improves communication among patients’ caregivers, leading to fewer patient readmissions, less frequent hospitalizations, and fewer trips to the emergency room. Improved provider communication also helps eliminate repetitive and unneeded tests and procedures.
VBC also encourages patients to become more engaged in their treatment and make more informed decisions. As a result, patients:
- Undergo fewer invasive procedures
- Are more likely to stick to their treatment plans, leading to better outcomes
Transforming healthcare delivery
Some critics conflate VBC and cost reduction, thinking value is focused on cost. Cost reduction is essential—but it is not the same as value, which focuses primarily on improving patient health outcomes. VBC opens the door for new models of healthcare delivery that place a greater emphasis on patient experience and engagement, two key components of healthcare delivery that can help improve patient outcomes.
Experience shows that this increased focus on improving patient experience helps improve patient engagement, patient adherence to treatment, and patient outcomes—thus, improving healthcare value.
VBC also encourages providers to help engage patients in making informed treatment decisions, leading to better overall patient outcomes. Under VBC, patients are less likely to regret treatment choices and are more likely to stick to their treatment plans. Researchers at the Robert Wood Johnson Foundation showed that patients actively engaged in their health care are more likely to manage their health conditions and stay healthy.
Improved access to care
VBC is not only transforming healthcare delivery; it is also transforming healthcare access.
One lesson from the pandemic is that telemedicine can be an effective means of healthcare delivery. Telemedicine can deliver care at lower cost while simultaneously improving access for patients that might have difficulty with face-to-face encounters. For instance, many rural residents have less access to critical healthcare infrastructure and technology. The Centers for Disease Control and Prevention report rural residents more likely to die from chronic conditions such as heart disease, stroke, and respiratory disease. Telehealth can provide solutions to a multitude of healthcare challenges faced by rural residents, including increased access to specialists, wellness programs, and mental health care.
Telehealth for patients with chronic conditions can increase comfort and convenience for patients with mobility or pain issues. Telehealth can enable immunocompromised cancer patients to receive care with reduced germ exposure.
VBC’s increased use of team-based care can also improve patient access. When patient data is shared and healthcare coordinated, it becomes easier to measure patient outcomes. Interdisciplinary caregiver teams work together to design and deliver comprehensive solutions for patients’ needs. Researchers show that VBC teams are more likely to prioritize engaging patients in discussing treatment plans and medications, recognizing that this will help them achieve desired outcomes. They are also more likely to coordinate with community resources to help patients meet healthcare goals.
Transforming healthcare
The ultimate goal of the VBC transformation is to enable the healthcare system to create greater value for patients by tying provider earnings to patient results. That’s why Veradigm is committed to improving access to, transparency, and efficacy of healthcare data: to deliver greater value—and higher-quality healthcare—to patients. Veradigm offers practices a suite of easy-to-use solutions that help streamline providers’ clinical and financial workflows. These products deliver actionable insights that providers can use to drive improved outcomes and enhance patient engagement.
Let Veradigm help you help healthcare’s transformation to VBC. Contact us to learn more.