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Value-based healthcare is a healthcare delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes. Under value-based care agreements, providers are rewarded for helping patients improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way.
Value-based care differs from a fee-for-service or capitated approach, in which providers are paid based on the amount of healthcare services they deliver. The “value” in value-based healthcare is derived from measuring health outcomes against the cost of delivering the outcomes.
The benefits of a value-based healthcare system extend to patients, providers, payers, suppliers, and society as a whole.
Value-Based Healthcare Benefits. Click To Enlarge.
The proliferation of value-based healthcare is changing the way physicians and hospitals provide care. New healthcare delivery models stress a team-oriented approach to patient care and sharing of patient data so that care is coordinated and outcomes can be measured easily. Two examples are reviewed here.
In value-based healthcare models, medical care does not exist in silos. Instead, primary, specialty, and acute care are integrated, often in a delivery model called a patient-centered medical home (PCMH). A medical home isn’t a physical location. Instead, it’s a coordinated approach to patient care, led by a patient’s primary physician who directs a patient’s total clinical care team.
PCMHs rely on the sharing of electronic medical records (EMRs) among all providers on the coordinated care team. The goal of EMRs is to put crucial patient information at each provider’s fingertips, allowing individual providers to see results of tests and procedures performed by other clinicians on the team. This data sharing has the potential to reduce redundant care and associated costs.
Accountable care organizations (ACOs) were originally designed by the Centers for Medicare & Medicaid Services (CMS) to provide high-quality medical care to Medicare patients. In an ACO, doctors, hospitals, and other healthcare providers work as a networked team to deliver the best possible coordinated care at the lowest possible cost. Each member of the team shares both risk and reward, with incentives to improve access to care, quality of care, and patient health outcomes while reducing costs. This approach differs from fee-for-service healthcare, in which individual providers are incentivized to order more tests and procedures and manage more patients in order to get paid more, regardless of patient outcomes.
Like PCMHs, ACOs are patient-centered organizations in which the patient and providers are true partners in care decisions. Also like PCMHs, ACOs stress coordination and data sharing among team members to help achieve these goals among their entire patient population. Clinical and claims data are also shared with payers to demonstrate improvements in outcomes such as hospital readmissions, adverse events, patient engagement, and population health.
Under CMS’s Hospital Value-Based Purchasing Program (VBP), acute care hospitals receive adjusted payments based on the quality of care they deliver. According to the CMS website, the program encourages hospitals to improve the quality and safety of acute inpatient care for all patients by:
CMS is expected to continue to refine its VBP measurements, making it important for hospitals to continuously improve their clinical outcomes so they can simultaneously improve reimbursement and their reputation among healthcare consumers.
Moving from a fee-for-service to a fee-for-value system will take time, and the transition has proved more difficult than expected. As the healthcare landscape continues to evolve and providers increase their adoption of value-based care models, they may see short-term financial hits before longer-term costs decline. However, the transition from fee-for-service to fee-for-value has been embraced as the best method for lowering healthcare costs while increasing quality care and helping people lead healthier lives.
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