The U.S. healthcare system is shifting from a fee-for-service model to a value-based care model. This shift is designed to improve the quality of care and outcomes for patients while also reducing the overall cost of healthcare. The impact of this shift on patients and providers is still being determined, but there are some potential benefits and challenges that are already apparent.
One potential benefit of the shift to value-based care is that it could improve the coordination of care for patients. Under the fee-for-service model, providers are often incentivized to order unnecessary tests and procedures because they are paid for each service they provide. This can lead to duplicate tests and procedures, as well as gaps in care.
Under a value-based care model, providers are paid based on the quality of care they provide, not the quantity of services they render. This could lead to improved coordination of care and better outcomes for patients.
Let’s have a detailed look at the impact of value-based care on patients & providers:
Value-Based Care — Explained
Value-based care is a healthcare delivery model where providers are reimbursed for delivering improved patient outcomes, rather than for the number of services they provide. In this model, providers are typically held accountable for a defined patient population and are given incentives to improve the quality and efficiency of care delivery.
The goal of value-based care is to improve patient outcomes while controlling costs. This model has been shown to improve quality of care and patient satisfaction, while also reducing hospital readmissions and length of stay.
Value-based care models are becoming more common as payers look for ways to control costs while improving quality. These models are often used in conjunction with other payment models, such as fee-for-service or capitation.
Value-Base Care — Different Models
There are a number of different value-based care models, each with its own advantages and disadvantages. The most common models are the accountable care organization (ACO), the patient-centered medical home (PCMH), and the bundled payment model.
Accountable Care Organizations
An Accountable Care Organization (ACO) is a type of managed care organization that ties provider reimbursements to quality metrics and reductions in the cost of care. ACOs were established by the Affordable Care Act (ACA) and are a key part of the ACA’s strategy for reducing healthcare costs in the United States.
ACOs are responsible for the care of a defined group of patients, and they receive a lump-sum payment from Medicare (or another payer) for each patient’s care. ACOs are accountable for the quality of care their patients receive, as well as the cost of that care. If an ACO is able to provide high-quality care at a lower cost than what Medicare (or the other payer) would have spent on the care of those same patients, the ACO will keep a portion of the savings.
The ACO model has been successful in reducing healthcare costs and improving the quality of care in the United States. In 2015, ACOs saved Medicare $466 million, and the number of ACOs has been growing rapidly since the ACA was enacted.
Patient-centered medical home (PCMH)
A Patient-centered medical home is a model of care in which a team of providers works together to provide comprehensive, coordinated, and continuous care to patients. This care is centered on the needs and preferences of the patient, and is delivered in a way that is convenient and accessible to the patient. The medical home model has been shown to improve patient outcomes, and to reduce health care costs.
The care team in a medical home includes a primary care provider, a care coordinator, and a medical home team. The care coordinator is responsible for coordinating care between the different members of the care team, and between the patient and the care team. The medical home team is responsible for providing comprehensive, coordinated, and continuous care to patients. This team may include specialists, therapists, and other health care providers.
Medical home teams use a variety of tools to coordinate care, including electronic health records, care plans, and patient portals. They also use a variety of methods to communicate with patients, including face-to-face visits, phone calls, and email.
Bundled-payment Model
Bundled payment models reimburse providers for a defined episode of care, such as a hospital stay. In this model, providers are incentivized to coordinate care and avoid unnecessary tests and procedures.
This type of model incentivizes providers to deliver high-quality, cost-effective care, as they are only reimbursed if the overall cost of care is below a certain threshold. This model has the potential to reduce healthcare costs and improve outcomes for patients.
One example of a bundled-payment model is the CMS Acute Care Episode (ACE) demonstration, which was implemented in 2008. In this demonstration, CMS created a bundled payment for a select group of inpatient conditions. Providers who participated in the demonstration received a single payment for all services related to the treatment of a patient with one of the selected conditions. The payment was based on the average cost of care for similar patients in the Medicare fee-for-service program.
The CMS ACE demonstration was successful in reducing the cost of care for Medicare beneficiaries without compromising quality. In addition, the demonstration showed that bundled payments can incentivize providers to deliver coordinated, high-quality care. As a result of the success of the CMS ACE demonstration, CMS has expanded the use of bundled payments to include a wider range of conditions and providers.
Impact of Value-Based Care on Patients & Providers
The goal of value-based care is to provide the best possible care for patients at the lowest possible cost. This type of care focuses on the overall health of the patient, rather than just the treatment of a specific condition.
There are many potential benefits of this shift to value-based care. One of the most important benefits is that it could help to reduce the overall cost of healthcare. This is because value-based care focuses on preventing and managing chronic conditions, rather than simply treating them.
This can help to reduce the number of hospital admissions and the length of hospital stays. In addition, value-based care can improve the quality of care that patients receive. This is because it focuses on providing the right care at the right time.
Major Challenges
However, there are also some challenges associated with this shift to value-based care. One of the biggest challenges is that it requires a change in the way that healthcare is delivered. This means that healthcare providers need to be trained in new methods of care delivery. In addition, value-based care requires a different approach to billing and reimbursement. This can be a challenge for healthcare providers who are used to the fee-for-service model.
Overall, the shift to value-based care is a major change in the way that healthcare is delivered. This shift has the potential to reduce the cost of healthcare and improve the quality of care. However, it also requires a change in the way that healthcare is delivered.
fee-for-service vs value-based care in healthcare
Fee-for-service vs Value-based Healthcare
Fee-for-service care is the traditional model of healthcare in which providers are paid for each service they render. In this model, there is little incentive for providers to coordinate care or to focus on preventive care, since they are not typically compensated for these activities. As a result, fee-for-service care can often be fragmented, with patients seeing multiple specialists who may not be communicating with one another.
Value-based care, on the other hand, is a model of healthcare in which providers are paid based on the quality of care they provide. In this model, there is a greater incentive for providers to coordinate care and to focus on preventive care, since they can be reimbursed for these activities. As a result, value-based care is typically more integrated and holistic, and can lead to better outcomes for patients.
There are pros and cons to both fee-for-service and value-based care. Fee-for-service care may be more expensive for patients, since they are paying for each individual service. Value-based care may be more expensive for providers, since they are paid based on the quality of care they provide. Ultimately, the decision of which model to use depends on the needs of the patient and the provider.
Here are some key differences between fee-for-service and value-based care:
Fee-for-service:
- Providers are paid for each service they render
- Incentive for providers to coordinate care or focus on preventive care is low
- Can be expensive for patients
- Can lead to fragmented care
Value-based care:
- Providers are paid based on the quality of care they provide
- Incentive for providers to coordinate care or focus on preventive care is high
- Can be expensive for providers
- Can lead to more integrated and holistic care
How value-based care can improve patient outcomes?
This type of care delivery has the potential to improve patient outcomes by incentivizing providers to focus on providing high-quality, coordinated care. Additionally, value-based care models often include performance-based bonuses or other financial incentives for providers who meet or exceed quality measures. This can further motivate providers to deliver the best possible care to their patients.
There is evidence that value-based care can improve patient outcomes. A study published in the New England Journal of Medicine found that value-based care was associated with a reduction in 30-day mortality rates for Medicare patients. Another study, published in the Journal of the American Medical Association, found that value-based care was associated with improved quality of care and lower costs for Medicare patients.
Overall, value-based care has the potential to improve patient outcomes by incentivizing providers to focus on quality of care. Additionally, value-based care models often include financial incentives for providers who meet or exceed quality measures, which can further motivate providers to deliver the best possible care to their patients.
How providers can benefit from value-based care?
Value-based care is a model of healthcare in which providers are reimbursed based on the quality of care they provide, rather than the quantity of care. This model has the potential to benefit providers in a number of ways.
For one, it can encourage providers to focus on preventive care and early detection, which can ultimately lead to better health outcomes for patients and lower costs for the healthcare system. Additionally, value-based care can help providers to better manage chronic conditions, as they are incentivized to keep patients healthy and out of the hospital.
Finally, value-based care can help to build trust between providers and patients, as patients are more likely to see their provider as a partner in their health rather than simply someone who is trying to make a profit.
How Assuras can Help?
Assuras can help healthcare organizations to shift to value-based care by providing a comprehensive range of management consulting services. We can help organizations to develop and implement value-based care models, optimize care delivery processes, and improve clinical and financial outcomes.
Our team of experienced consultants has a deep understanding of the healthcare industry and can provide insights and recommendations that are tailored to the specific needs of your organization. Contact us today to learn more about how we can help you to shift to value-based care.
Bottom Line
Value-based care is a shift in the healthcare system that emphasizes quality of care over quantity of care. This shift has many benefits for both patients and providers.
Patients benefit from value-based care because they receive better quality care that is more tailored to their individual needs. Providers benefit from value-based care because they are able to focus on providing high-quality care, which leads to improved outcomes and lower costs.
Overall, value-based care is a win-win for both patients and providers. Patients get better care, and providers are able to improve their practice while also reducing costs.