Value based care is a method to improve healthcare results and decrease costs by reimbursing based on value provided rather than fee for service. Statistics are showing that under value based care, payers are seeing a reduction in unnecessary medical costs, improvements in care quality and provider relationships as well as patient engagement.
Benefits of value based healthcare include the following:
- Less cost for patients centered on better outcomes
- Greater efficiencies for providers
- Stronger provider-patient relationships and patient satisfaction
- Improved quality of care
- Drug manufacturers can align prices with their actual value to patients
- Payers can regulate costs and reduce risk
- Overall health of the population improves while spending decreases
Value based healthcare is changing the way physicians and hospitals provide patient care. No longer based on a fee for service model, healthcare providers need to work together as a team so that the overall value of the care to the patient can be measured. The Centers for Medicare & Medicaid Services (CMS) has introduced a variety of value based care models and private payers have consequently also adopted similar models of value based care.
There are a few different models for providers collaborating to deliver value based care:
- Patient-centered medical homes (PCMH): A PCMH provides comprehensive care that requires a team of providers. The care is coordinated through a patient’s primary physician and is designed to provide patients with a centralized care setting that manages all the various needs of the patient. A PCMH is not necessarily a physical location but can be a virtual network of providers. This type of model provides for a personal, one-on-one relationship between patients and providers as well as better accessibility with shorter waiting times for urgent care, more in-person hours, and 24/7 telephone or electronic access to a member of their care team.
- Accountable care organizations (ACOs): An ACO is a group of physicians, hospitals and other providers that work together to provide the best possible care at the lowest cost. Goals of ACOs include eliminating unnecessary services, improving quality of care and improving patient health outcomes. ACOs do assume some financial risk for joining but they also share in the rewards associated with successful patient outcomes.
- Hospital Value-Based Purchasing Program (VBP): A VBP provides incentive to hospitals to deliver high value care rather than high volume. The goals of the program include improving the quality of care for hospital patients and making hospital stays a better experience for patients. Under this program, Medicare rewards hospitals with payments based on how well they perform on certain quality measures or how much they improve their performance. Hospitals in this program can earn an adjustment to their Medicare payments based on their total performance score which is calculated on certain performance thresholds such as mortality and complications, patient experience, care coordination/process, efficiency and cost reduction.
- Bundled payments: Under the bundled payment model, providers and facilities are paid a single payment for services provided for an entire episode of care. The payment amount is determined based on historical prices. There is some risk here to the providers in that, if the costs exceed the bundled payment set price, then the providers lose the difference. But if the cost of the episode is less than the bundled payment set price, the providers can keep the savings.
While progress has been made and some early success has been seen, there is still a long way to go in value based care. Innovation related to the sharing of data and results is necessary for the success of value based care. As more providers adopt value based care models and technology improves, we should expect to see reduced healthcare costs for unnecessary procedures, increase in patient/provider engagement, and more collaboration among providers.