I’m often asked by those in my network who are not vocationally tied to healthcare, what is all the noise about. First, those I serve with and for would likely agree there are easier things to do; but for many of us this is about social goodness, a system that works for all, the cause that drives us. It’s about evolving the model we find ourselves in right now. Early on, the focus of healthcare was solely on the person. House calls were a norm, but that was not sustainable. As a new model took shape, we quit treating people and began instead, focusing on payment, the business, the lawyers and the bottom-line. As a result, person-centered care suffered. And while no system is perfect, I am hopeful that the switch to value-based healthcare will bring us, and those in need of care, back to the center of the equation. Here is my attempt at a brief overview on what much of the noise is about.
Before I start, let me clarify the words I’m using to help connect the communities, which are not always used in the same way. When we talk “patient,” I am talking about a person. Traditional models of care have used this term for some time, in the community I now serve, this word is seldom used as it reflects a state in a point of time. In the Human Services and Post-Acute communities most often we use “people” as the state becomes an aspect of life in pursuit of continued wellness, health and recovery. My use of these words is to help create a link between traditional models of care and an emerging world of integrated care.
What is Value-Based Care?
Traditionally, medical services have been provided on a fee-for-service (FFS) basis. Clinicians provide services from a super simple consult to a more involved treatment and, each action is charged for and billed separately. As is each and every item used, down to the tiniest bandage or piece of tape. The result: waste. Services and supplies, often overprescribed, are misused; with the patient, their insurance company, and often even the provider or healthcare organization absorbing the unnecessary costs. Very often, patient outcomes suffer too, as needed services not well-covered by insurance, are avoided by the provider solely based on payment.
In the value-based care model, reimbursements are aligned to a patient’s outcome, not the number of services performed. Currently, only a small percentage of the country’s healthcare organizations are utilizing this model. However, governmental agencies like Medicaid and Medicare are currently making the switch, so it is safe to assume that the private sector will soon follow suit.
There are many payment or reimbursement models of value-based care. They all involve teams that approach healthcare in a way that coordinates patient care with technology and information with the aim of delivering better more consistent and cost-effective care — across the healthcare system.
The Accountable Care Organization
Accountable Care Organizations (ACO) are transforming healthcare delivery by rewarding doctors and hospitals who successfully improve quality, reduce costs and improve overall patient satisfaction. ACOs have formed alliances with doctors, hospitals and other healthcare providers to deliver and coordinate care for their member patients.
Through benchmarking, healthcare professionals can better coordinate and provide preventive care. ACO health plans team up with physician groups and health systems to share data, offer assistance in managing financial risk, provide clinical management expertise and utilize technology.
Healthcare providers who successfully manage their patient’s health reap the rewards. However, there are penalties and reduction in pay, if they do not meet the standards agreed upon. For consumers/people, having a team of providers incentivized to work together for your well-being ensures better outcomes.
This model of value-based care similarly rewards providers that improve and maintain quality, while effectively decreasing costs. Health plans and providers together develop and agree upon efficiency, outcomes and quality measures. Because this model puts a portion of the providers expected fee-for-service payments at risk, it creates extra incentive to outperform the requirements. While technically still “fee-for-service,” this method encourages quality and improves efficiency.
Bundled Payments Model
This practice of bundling services is becoming more common, so it is a progression that a bundled payment model would follow. In this scenario, one payment is made to doctors which include all services associated with a single event or episode-of-care. The agreed upon rates are determined by the estimated costs expected for a particular treatment, minus the costs for preventable complications that could arise.
What Value-Based Care Means for Consumers and Providers
The benchmarking and data driven technology allow providers to understand and grasp the best practices needed for achieving better outcomes without the added investment and a lot of unnecessary guesswork. Because value-based care promotes a coordinated, efficient and cost-conscious effort for specific treatments or conditions, fewer tests are repeated, the number of reimbursement denials decreases, patient outcomes improve and readmissions, as well as lengths of hospital stay, go down.
The value-based approach is designed around patients. For consumers, having a team of providers incentivized to work together for your well-being ensures better outcomes. Because medical care teams focus on individual needs, whether preventive, acute or chronic, patients benefit.
Empowering People in Their Healthcare
Centers for Medicare & Medicaid Services (CMS) have already begun a value-based payment system. In the private sector, the value-based payment model will continue to improve and evolve. It is important to get consumers on board early so that there is a better understanding of the various healthcare needs. Preventative courses have to be individualized for each patient to ensure the best outcomes.
Since preventative care is tied to outcomes, it is an essential component of value-based care. Patient involvement is especially critical at this stage because preventative care doesn’t work unless patients are educated, empowered and encouraged to take part in their own health. Encouraging and promoting a patient to choose a healthy lifestyle and consistently monitor their health has to become as fundamental as educating them on when to call a doctor.
Value-Based Care Going Forward
There is no single model of value-based care proposed that fits all situations, populations and needs. The choice of which model to use will depend on each organization, its capabilities and market position. But due to healthcare cost increases, poorer outcomes and improvements needed in the quality of care and patient satisfaction, it is clear that a solution is needed. As value-based models evolve, insurance providers, health organizations, physicians, providers and consumers should continue to strive towards a system that puts the person back at the center of care.
To answer the question that started this post, it’s an exciting time to be in healthcare. Few ecosystems have gone under this much change in such a short amount of time. While it is noisy, resistance abounds, we are having the conversation and my faith is in humanity – that we will find our way forward towards a system of accessible and better care for all, moving towards a true person-centric model.