What You Need to Know About Value-Based Care – 5 FAQs

What You Need to Know About Value-Based Care – 5 FAQs

According to most industry experts, our health care system’s move from volume to value is an inevitable transition. It’s happening slowly, but surely and irrevocably. In spite of this assessment, however, many organizations and individuals – from hospitals to insurance providers to patients – are still struggling to understand what value-based care really means, and how it can be expected to impact the existing health care landscape.

Read on for answers to some of the most frequently asked questions about this model of care.

  1. What is value-based care?

The term “value-based care program” typically describes either an outcomes-based payment arrangement, or a model of coordinated care (or sometimes a scenario that incorporates both these elements). The goal of these programs is to improve overall quality of care while reducing unnecessary services and claims costs.

To accomplish this, a portion of the reimbursement for providers is based on cost-efficiency and population outcomes metrics. In addition, incentive payments are used to help motivate providers to offer coordinated care that maximizes quality while minimizing cost. Other terms often used to describe value-based care programs include “care delivery innovation,” “payment reform,” “payment innovation,” and “value-based contracting.”

  1. How is value-based care different from the fee-for-service model most often used today?

hospitalAs its name implies, a fee-for-service model reimburses providers for each individual service provided to the patient. In other words, a provider receives more reimbursements the more services they provide, without regard to the quality of service provided or whether patients see improvements in their health from the care they receive. Those factors are simply not part of the fee-for-service reimbursement equation. Consequently, providers have little or no incentive to streamline their services or cut down on unnecessary procedures.

However, quality is an integral part of the equation in a value-based payment model. In this scenario, provider compensation is directly linked to performance in a number of specific areas, including patient experience, outcomes, and the use of cost-efficient care tools such as electronic medical records.

Providers are thus encouraged to focus on goals like creating the most clinically and cost-appropriate settings in which to deliver care; making care decisions using quality outcomes data and evidence-based best practices; including patients in the decision-making process; and identifying key gaps in care that are impacting the patient experience.

  1. What are some examples of value-based care programs?

As the move from volume to value continues to sweep across the health care landscape, more and more payors and insurance providers are designing and offering value-based care programs to meet the unique needs of specific communities and markets. Some examples of such programs include:

Accountable Care Organizations (ACO): This model involves a group of health care providers working together to deliver coordinated care that meets set performance benchmarks for cost and quality. An ACO’s main goal is to better manage the total cost of care for member populations.

Patient-Centered Medical Homes (PCMH): Under this model of care, the central relationship is between the patient and his or her primary care physician (PCP). It is this PCP who is in charge of coordinating a team that is collectively responsible for the care of the patient.

Pay-for-Performance or Quality-Based Incentive Programs: This incentivized payment model rewards health care providers for improvements in critical performance areas like clinical quality outcomes, efficiency, process, infrastructure, and patient safety.

Episode-Based Payment: Also known as bundled payments, episode-based payments reimburse all services clinically related to the same episode of care – such as a kidney transplant, for example – through a single negotiated payment.

  1. How are providers compensated for value-based care?

hospitalWhile the specifics vary from payor to payor, most value-based care payments usually fall into one of two categories. The first is care coordination fees or incentives. In this category, care providers are paid a negotiated amount on a per-attributed-member, per-month basis. These payments serve as reimbursement for additional services like pharmacists or nurse case managers that may be part of the primary care provider’s spectrum of care.

The second category is shared savings incentives. These fees are retrospective payments, typically made on a yearly basis, that are not included in the fees associated with specific services. They are based on pre-determined quality and cost targets.

  1. What are some of the benefits of value-based care for providers?

Today’s health care providers are aware that the responsibility for health care quality and cost must and should be placed in their practices. Value-based care programs give these providers the opportunity and the motivation to provide superior care in a cost-efficient manner.

The greater financial and professional rewards available to providers when they meet their goals under a value-based program gives them more freedom to put their focus strongly on quality. Additionally, it gives them more control over both their patients’ health and their own financial situation.

Sorry, comments are closed for this post.