Value-based healthcare is a relatively new delivery model focused on patient health outcomes. Under value-based care, hospitals, physicians, and other healthcare providers are paid based on their ability to provide improved health and quality of life while reducing rates and symptoms of chronic disease. Introduced in 2006, measuring health outcomes against the cost of said outcomes determines the “value” of value-based care. In a value-based care agreement, patients with providers create a treatment plan and measure clinical results during treatment.
Types of Value-Based Healthcare Models
Different types of value-based care differ depending on the risks assumed by providers and how providers and patients share savings or losses. The most common value-based healthcare systems include:
- Accountable Care Organizations use a network of physicians, healthcare facilities, and other healthcare providers to provide high-quality care to Medicare beneficiaries while eliminating redundant services and reducing medical errors. Network members share reduced healthcare costs, savings, and losses.
- Bundled Payment Systems provide single payments for entire episodes of care. Providers are collectively reimbursed for the complete course of treatment, so multiple physicians, healthcare facilities, and specialists may share in the payment. Providers who can decrease the cost of services below the bundled payment profit.
- Patient-Centered Medical Homes coordinate all patient care through primary care physicians, resulting in centralized, personalized care and reduced inpatient admissions and emergency department visits.
Understanding the Benefits of Delivering Value-Based Healthcare
Value-based healthcare offers benefits to both providers and patients. A well-run value-based care system provides reduced costs, greater efficiency, and higher patient satisfaction rates.
Lower Healthcare Costs
Value-based healthcare helps patients recover from illness and injury faster, manage chronic conditions more efficiently, and avoid chronic disease through preventative care. Patients benefit from fewer medical appointments and spend less on prescription medication as their health improves.
Increased Patient Satisfaction
Value-based care improves patient engagement by focusing on treatment value rather than the volume of treatments. There is an emphasis on quality of care over quantity.
Improved Provider Efficiencies
While healthcare facilities may need to implement prevention-based patient services to meet the demands of value-based care, less time is spent on expensive and time-consuming chronic disease management.
Reduced Costs for Payers
Under a value-based healthcare system, financial risk is reduced by spreading the risk over a large patient population. Healthy populations make fewer medical claims, which reduces pressure on payers’ pools and investments.
Prices Align with Patient Outcomes
By aligning products and services with patient outcomes and reducing costs, suppliers build trust in the community and develop a reputation for cost-efficient positive patient outcomes, an important consideration given the continued increase in prescription drug costs and inflationary pressures.
Reduced National Healthcare Costs
Currently, healthcare expenditures in the USA account for 19.7% of the Gross Domestic Product. By focusing on preventative care, value-based healthcare reduces the cost of managing chronic disease and hospitalizations.
The Recent Success of Value-Based Healthcare
Value-based care’s ability to improve patient outcomes while reducing healthcare costs is catching on quickly in the USA. Value-based healthcare systems accounted for 38.2% of all healthcare payments in 2019, 39.3% for traditional fee-for-service programs, and 22.5% got pay-for-performance or care coordination fees.
Given its short history, research into value-based healthcare's cost-saving efficiency is only just becoming available. In 2015, the HHS reported that accountable care organizations saved $417 million in Medicare costs, with data from 2020 indicating Medicare ACO savings had increased tenfold to $4.1 billion. According to the Centers for Medicare and Medicaid Services, all Medicare payments are expected to pass through value-based care systems by 2030.
Value-Based Healthcare is the Future
Value-based care is poised to become the future of healthcare for providers and healthcare facilities across the country. SEC³URE Ethos solutions help smooth this transition by reducing administrative and operational costs and increasing profitability. Enhanced compliance systems and improved vendor visibility increase site security, adding to patient trust —an essential component of value-based healthcare. Contact us to learn more about how you can tap into value-based healthcare by applying our SEC³URE Ethos solutions.