Value-based care is a form of reimbursement that payors and health plans make to providers that ties a portion of their payments to quality performance, patient outcomes, and appropriate reductions in spending instead of the volume of services provided. The goal of value-based care is to keep patients healthier longer while curbing the avoidable or unnecessary spending on health care that has low-value to the patient’s overall health and quality of life.
In value-based care arrangements, healthcare providers contract with government payors or commercial health plans to meet certain clinical quality care and financial benchmarks. These benchmarks serve as proxies for the patient care value. The benchmarks designed to get healthcare provider’s to focus on providing proactive care management, early intervention in an episode of illness or chronic disease, use preventive care to improve health and engage the patient in their healthcare, provide coordinated care between providers, and support transition of care between hospital and institutional stays and home and community reintegration for patients with serious medical conditions.
Healthcare is so complicated and confusing it is difficult for patients to know when they are getting value from the healthcare services the receive. Although not a perfect substitute for an informed knowledgeable patient who decide on their own the value of the healthcare they receive and the price they are willing to pay, the performance benchmarks set by payors and health plans do provide the next best thing. When a portion of the healthcare provider’s financial reimbursement is based on satisfactory performance on value-based care measures from financial incentive payment or providing a healthcare provider a share of any healthcare expenditure savings produced from meeting the value-based benchmarks, the patient benefits from improve health and quality of life. Providers that don’t meet benchmarks can lose some their reimbursement from the payor because of their poor performance including having to pay a share of the over expenditure of medical cost experienced by their patients back to the payor.
So, if providers share in the savings from reducing medical expenditures, what keeps them from not requesting or ordering necessary healthcare services that their patient needs or avoiding taking care of their sick patients altogether? First, healthcare providers can be sued for not providing medically necessary services, as well as lose payor and health plan contracts, and professional reputation for providing poor quality. This is a great deterrent. Secondly, most healthcare providers have always wanted to provide better care to their patients, but fee for service payment incentivized them to produce sick care billable visits, over really taking time with their patients and keeping them healthy and well, so that they did not become sick in the first place. And third, to get any savings from containing patient care cost a healthcare provider must first meet the quality of care benchmarks. These factors align to assure healthcare providers work to save medical cost by keeping their patients healthy and well.
Until patients can make their own value-based healthcare decisions, value-based care payment is the best approach to improving health, enhancing the patient care experience, and reducing healthcare cost.
