The History & Future of Value-Based Healthcare

Posted Dec 13, 2023 under:

Value-Based vs. Fee-For-Service

A growing trend of value-based care in United States healthcare is looking to revolutionize the way the system operates, and the value it brings to all involved.

The Future of U.S. Healthcare?

Value-base care models have become increasingly popular, but what exactly does it mean?

The term “value-based care” has become a staple of healthcare terminology over the past decade. At all levels of the system, providers, healthcare organizations, such as SCA Health, federal and state legislators, and national groups are working to highlight the benefits of value-based care and its patient-centric focus on delivering high-quality healthcare while lowering costs and improving outcomes.

According to Innovaccer, the term “value-based care” arose in 2006 in scholars Michael Porter and Elizabeth Olmsted Teisberg’s report entitled, Redefining Healthcare. Porter and Teisberg’s approach shifted the focus away from compensating providers based on the number of procedures they performed and toward patient outcomes due to the care provided.

“At its core, this approach aimed to align competition with patient value, ultimately maximizing health outcomes for each healthcare dollar spent,” article author Vaibhav Awasthi says.

This new approach made patients the center of the care process, rather than the procedures delivered by providers, thus creating a quality system and implementing checks and balances to avoid unnecessary medical intervention.

Over time, further advancements, such as the inclusion of value-based purchasing incentives in the early 2000s, the Affordable Care Act introduced by former President Barack Obama in 2010, the MACRA and Quality Payment Act of 2015, and CMS Primary Care Initiatives in 2018, have worked to push the value-based care model. Below are a few aspects of value-based care and how they differ from traditional fee-for-service models.

Patient-Centered Care

Under a value-based care model, patient outcomes take center stage, putting an increased emphasis on provider performance. Under this model, patients become more involved in decision-making and are thus more informed. This information-sharing approach improves patient outcomes, as a more informed patient is more likely to follow set treatment guidelines and instructions.

Provider Efficiency

A revised payment schedule has allowed for single payments per episode of care. This encourages collaboration and efficiency across multiple providers. These payments, now based on outcomes rather than procedure volume, also improve the quality of care delivered.

Improved Incentives

The increased emphasis on creating high-quality outcomes is aligned with performance-based incentives for providers. Based on quality outcomes, these goals encourage collaboration and quality while reducing unnecessary medical intervention.

Risk Management

Managing a patient’s risk can be difficult. According to Ketan Patel, M.D., the U.S. health system produces billions of pages of medical records per year. Electronic health records (EHRs) have helped organize these files, and the increased use of artificial intelligence (AI) allows providers to quickly screen for keywords in a patient’s chart to help fully identify illnesses. In turn, this process has improved the ability of providers to manage patient risk and devise comprehensive care plans that help mitigate future risks and achieve the goal of improved quality outcomes.

Preventative Care

The movement to value-based care has worked to reduce the occurrence of unnecessary medical procedures and wasted procedures. Additionally, the lack of payment for procedure volume has also increased preventative care. As each piece comes into place, efficiency, risk management, patient education, incentives, and more, the focus on providing preventive care has promoted a “proactive, not reactive” approach to patient treatment plans.

While value-based care has many more intricate aspects, these examples showcase how an ideological shift benefits all involved within the U.S. healthcare system.   

The Future

What lies ahead for value-based care in the U.S.? Megan Reyna, a system vice president at Advocate Health, told Healthcare Strategies that she believes the focus should be improving the data supporting physicians and utilizing strategies to expand the model nationwide.

“You just need to take one step forward,” Reyna said. “There’s always going to be an area of opportunity for us, collectively as a nation. We have a lot that we can work on within the value space.”

Overall, the shift away from fee-for-service models has been slow, with some specialties within the U.S. health system adapting faster than others. Many issues must be worked through before a complete, nationwide adaptation can be realized. However, the current data behind value-based care models has shown the potential future for U.S. healthcare and the benefits it may bring to providers, patients, insurers, and health systems.

Resources

Innovaccer: https://innovaccer.com/resources/blogs/what-is-the-history-of-value-based-care

Managed Healthcare Executive: https://www.managedhealthcareexecutive.com/view/the-risk-of-value-based-care

RevCycleIntelligence: https://revcycleintelligence.com/features/unlocking-the-future-of-value-based-care-with-data#:~:text=The%20future%20of%20healthcare%20should,the%20discussion%20with%20Healthcare%20Strategies.

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