A value-based care overview: solutions, benefits, and more

Value-based care (VBC) is a healthcare delivery model in which providers are paid based on patient health outcomes. It measures health outcomes against the cost of delivering the outcomes, incentivizing providers to administer high-quality healthcare by emphasizing overall patient health.

This model differs from the standard fee-for-service reimbursement model, which bases reimbursement upon the quantity of health services delivered. This traditional model incentivizes providers to perform more services, often resulting in higher costs for the patient.

The value-based care payment model was first developed by the American Academy of Pediatrics in 1967. Named The Patient Centered Medical Home (PCMH), it was created for sick children who were seeing lots of disconnected specialists and required better care coordination. As time went on, PCMH’s core principles evolved, and it became popular again in the late 2000s.

Health Maintenance Organizations (HMOs), another form of value-based care, have been around since the 1930s, but they didn’t take off until 1973 when the HMO Act was passed. Under this national law, employers with at least 25 employees must provide an HMO insurance option. As a result, many people signed up for their employers’ policies, and HMOs skyrocketed in popularity.

Many people agree that today’s healthcare industry needs a new approach. At the moment, value-based care is a promising solution. 

Experts say value-based care benefits:

• Patients with lower costs and better outcomes

• Providers with better patient experiences and increased efficiency

• Payers with stronger cost controls and lower risk

• Suppliers with the alignment of costs with outcomes

• Society with reduced healthcare spending and better health

Value-based care focuses on preventive care to keep healthy people healthy, which is cheaper than caring for already sick people. It requires healthcare organizations to take on more risk from payers like Medicare, Medicaid, and private insurance companies than they have in past delivery models.

For healthcare providers, it’s important to identify what preventive services a patient needs long-term, with a heavy emphasis on the overall health of a patient. One way is to encourage coordinated care using EMR (electronic medical record) data.

Before seeing patients in the office, providers can check EMRs for discrete data fields to document quality measures and identify gaps in care. Value-based care solutions aggregate EMRs and other data assets to help surface powerful insights that inform care decisions. This results in improved care coordination and quality outcomes for your entire population.

There are three main payment models that fall under value-based care:

1. Shared Savings: The shared savings model acts like a fee-for-service model throughout the year but reconciles healthcare expenses at the end of the year. If a provider’s expenses fall below a certain benchmark, this results in savings, which are then shared between the payer and the provider.

2. Shared Risk: The shared risk model is also a fee-for-service model year-round with end-of-year reconciliation. However, providers with expenses above the benchmark risk losing revenue.

3. Capitation: Health Maintenance Organizations (HMOs) fall into the capitation reimbursement model, which gives the provider a fixed fee per member over a certain period. The provider must service that member using the allotted capitation.

While still up-and-coming in today’s healthcare world, more healthcare providers are accepting value-based care services as a viable alternative to traditional payment models like fee-for-service. According to the AMA Center for Health Equity, 73% of payers are shifting to a value-based care payment model.

Value-based care and population health management work together to identify patients at risk for complex illnesses and in need of preventive screenings. Population health case managers can use value-based care solutions to identify the sickest patients and determine what care they need.

Since the goal is to improve patient outcomes, providers can see if these patients need certain screenings or risk gaps closed. This could include anything from A1Cs for diabetic retinopathy screening to an annual wellness visit.

You can also identify your highest cost patients as targets for outreach. Healthcare organizations can set up weekly or monthly calls with patients to check in.

From a healthcare provider perspective, here are five key strategies to implement and improve value-based care:

1. Identify patients with the highest risk: Leverage a value-based care solution to aggregate patient data and identify high-risk populations 

2. Address patients who need care: Develop an outreach strategy to encourage appointments, medication adherence, and preventive care

3. Encourage annual wellness visits: Employ mid-level providers to perform annual wellness visits for patients in value-based care

4. Keep open communication with provider-relation reps: Understand the value-based care incentive targets that your payers require and collaborate as you gather new insights and feedback from the care delivery front lines

5. Be open-minded to succeed at value-based care: Create plans for closing care gaps, such as accelerating collaboration between multidisciplinary care teams, adopting value-based care solutions, and adjusting care plans based on patient outcomes