Value-based care (VBC) is an alternative to fee-for-service models – but this is more than just a trend – in fact, it’s a long-term innovation to how we manage healthcare costs.
VBC means that practitioners and hospitals/practices are paid based on patient outcomes – not on the quantity of procedures or the volume of patients. Think of this like some newer higher education programs – like code schools – who often don’t ask their students to pay tuition until they are employed.
VBC raises two very important questions, what quality of care is being provided, and is this method financially viable?
Cost control strategies
Primavera’s Central Florida client’s MLR decreased 3% between 2018 and 2021 – and it’s important to break down why.
Healthcare transformation starts with reimbursement. If we throw out fee-for-service, how do we pay for services without compromising their quality or short-changing providers? Largely, VBC is a reward system supported by the Centers for Medicare & Medicaid Services (CMS) with a variety of programs, and private payers have begun to adopt similar programs.
MLR is calculated by dividing the cost of medical treatments, services, and supportive therapies, by the collected premium (minus taxes and fees). VBC is a model that uses the health of a patient to reduce cost.
Health care quality is less expensive if it is focussed on prevention – and this can be applied to patients with pre-existing conditions by bundling therapies that encompass diet, exercise, physical therapy, and mental wellness, as well as other traditional medical services.
Shifting away from fee-for-service
There are many ways for healthcare organizations to shift away from fee-for-service and strategize how both patients and providers can benefit financially from VBC. For example, by bundling therapies for specific pathologies, patients in VBC models aren’t charged for each individual services or tests- and practitioners aren’t paid per service. VBC promotes payment for proactive care, rather than compensation for reactive treatment.
In the VBC model, healthy patients are what help moderate and reduce costs.
Value-Based Care and Implementing Digital solutions
The federal government implemented value-based care to lower health costs across the U.S. The success of this initiative lies in the balance between quality care and patient access to make it viable. This brings us to digital innovations.
A big aspect of VBC is efficiency – which is accomplished through digital applications that prioritize patient care, evaluate and assess risk, and make it easy for healthcare teams to communicate and securely share patient data. This reduces (or nearly eliminates) repetitive testing and consultations with the added benefit of saving time.
We can’t bring up the digital aspects of VBC solutions without talking about integrations. Platforms like this make it easy to communicate directly with your patients, as well as integrate with vendors and payors to expedite transactions, organize transportation, and hold sessions with clients at a fraction of the time and cost of in-person visits.
Improving the Entire Care Spectrum
VBC solutions are increasing in popularity – partly because of their long-term value. Less frequent hospitalizations and reduced need for in-person trips to urgent care (with remote consultation) help lower costs over time.
Proactive care is the core of VBC, but we don’t just mean proactive healthcare for patients, we mean proactive cost strategies for hospitals and practices.
VBC improves the experience of care
User experience, from a technical perspective, has become an integral part of many aspects of life from banking to daily work for much of the population, and it’s no different for healthcare. A successful health platform needs to provide 3 main things:
- Ease of use for all populations (single touch access with no download required) not all patients are tech savvy.
- Manage and assess data securely in compliance with standard regulations and data practices.
- Analyze data and help prioritize patient care in an accessible way for ease of use by healthcare teams
VBC improves population health
Clinical outcomes with VBC models depend on prevention to be successful so this approach is about focussing on a care continuum rather than just treating visible symptoms.
VBC reduces per capita costs of health care
Like we said, healthy patients are a cost-stabilizer. VBC reduces admissions and readmissions to hospitals, which reduces costs for payers, which in turn means that Insurance companies pay less for services when subscribers visit their doctors less frequently and are healthier.
Shared Outcome of Value-Based Care
Logistically, VBC is a shared savings approach. Payers have a budget for healthcare costs, so providers whose services come in below that threshold essentially transport their savings to other services and providers in the network with more expensive treatment pathways.
The overarching theme of VBC models is to increase the health of society without imposing a strain on resources. With a more preventive mindset and medical approach, the overall cost of managing chronic conditions will be reduced overtime, along with associated spend.
No matter where you are on the journey to value-based care, we offer an integrated approach to flourishing under the new model utilizing the Primavera advisors and tools. Reach out today to schedule your free consultation!