What is Value-based healthcare?
In value-based care, providers are reimbursed for helping patients to recover their health. Lower the impacts and occurrence of long-lasting diseases and live better lives in an evidence-based way. Value-based care is different from fee-for-service and capitation, in which doctors are rewarded for the number of healthcare services they provide. The term ‘value’ in value-based healthcare has originated from shaping health results against the price of providing the outcomes.
Value-based healthcare appears as a substitute for fee-for-service, which pays providers all together for services offered based on the bill charges or yearly fee. It is a simple idea of improving the results and quality of health for patients. Value-based healthcare aims to regulate the process of healthcare through best practices. Wellness and prevention are also in value-based care. Protecting health through quitting smoking, nutritional and lifestyle changes lessen the need for costly processes, tests, and medicines.
Difference between Fee-for-Service and Capitation
In the fee-for-service payment model, the medical services are bundled and paid for separately. This model incentivizes doctors to offer more treatments or services since costs are dependent on the number of procedures, treatments, and services. As an outcome, medical practices and physicians might overlook the quality of care for increased profits. Whereas in capitation, the physicians are discouraged from performing extra procedures. Capitation often regulates the use of healthcare assets and puts physicians at the peril of services provided. Capitation fee in healthcare is the fixed sum of money per patient per unit of time paid in advance. Value-based healthcare is significantly different from these models. In this model, hospitals and doctors are paid for the quality of the services provided as well as helping people cost-effectively improve their health. Read More – Capitation vs. Fee-for-Service
Value-based care delivery models
Currently, at least 75% of the providers participate in at least one value-based healthcare model. The payment process which doctors, hospitals, and other providers is based on a different measure, including quality, effectiveness, and cost, and in enhancing the patient experience. The available value-based healthcare models are as follows:
- Medicare Quality Incentive Program
- Pay for Performance
- Bundled Payment
- Patient-Centered Medical Home
- Payment for Coordination
- Accountable Care Organization
The shift in the market toward a value-based payment model is driven by the pressures to cut down costs and improve the quality of healthcare. Government payers, employers, health plans, and consumers are asking the healthcare system to deliver value. These new models are an essential part of that process.
Pros and Cons of Value-based Healthcare
The pros of value-based healthcare include:
- Customers are at the heart of healthcare and are sustained by a more synchronized care team.
- Proactive care prevents and manages chronic illness with a focus on keeping patients well.
- Data is assessed across the organization of care providers to recognize particular well-being risks, improve care management and improve the operations.
- Value is the new benchmark for insurance firms and provider’s pay is based on the quality of care.
- Quality and patient engagement increases when the focus is on value rather than volume.
- Suppliers get the advantage to support their products and services with positive patient results and decreased costs.
The cons of value-based healthcare include:
- Increased patient load makes doctors responsible for wellness issues that are beyond their typical scope.
- The demands of a value-based system can lead to a tougher, less sustaining work environment for physicians.
- Organizations that lack data managing skills find it difficult to reach value-based care objectives which might end up in hefty penalties.
- Lack of transparency in data and irregularity in reporting models.
Future Prospects of Value-based Healthcare
Transforming from fee-to-service to value-based care will take some time and the shift might be harder than estimated. Physicians are finding themselves with unpredictable performance reports, and variations in performance measurement. There are less staff time and a lack of transparency among payers and providers.
As the healthcare sector continues to evolve and providers accept the value-based care models, they might initially experience some financial hits but this transition eventually translates to an ideal method for decreasing the healthcare costs while expanding quality care.
In order to succeed in this new model, providers need to garner new abilities such as making clinically combined physician networks, gathering and assimilating data, and applying analytics to find cost and prospects for quality improvement.
Value-based healthcare is bending the cost curve, reducing redundant medical costs while improving care quality and patient engagement. To succeed, healthcare providers must understand that they need to engage patients, families, and consumers.
It means captivating the patients in their healthcare outcomes from the beginning to the end. Healthcare providers should work to support patients in all aspects of their health and wellness journey. Apart from generating strategies to support a value-based model, conducting strong patient outreach within the community is also important.
Offering positive experience and outreach by using innovative technology will deliver on the promise of quality health care at a lower cost.
Contact PrognoCIS to Discuss the EHR Needs of Your Medical Practice
PrognoCIS offers powerful solutions to medical practitioners which include Practice Management, Telemedicine Solutions, and Medical Credentialing. For more tips on value-based healthcare, sign up for our EHR newsletter and stay updated with the latest Prognocis News here
Find out whether our electronic health record software is the right choice for you.Request DemoDownload EHR Flyer