In the healthcare industry, you constantly hear the term value-based care but if you asked someone to explain the concept to you, they might have trouble. Value-based healthcare refers to a way in which healthcare providers are reimbursed for services rendered.
This payment method emerged as an alternative to the fee-for-service (FFS) reimbursement model. The FFS model pays providers for services based on bill charges or annual fee schedules. The idea is that value-based care focuses on paying for value over volume.
The Switch from Volume to Value
With the slow rise of the value-based healthcare model, it leaves some wondering why the industry is moving away from the FFS model. The traditional model provides an incentive to provide many services per patient. This creates unethical opportunities for doctors, and they may have tests, procedures, or prescribe medications that the patient does not actually need.
Switching to a reimbursement model that gives rewards based the quality of care is in the best interest of the patient. Value-based care models not only provide better care for patients but can improve health management strategies and reduce the cost of healthcare.
Value-based care models have the potential to replace fee-for-service models instead of just acting as an alternative. The value-base care model focuses on patient outcomes, how healthcare providers can improve the quality of care, and improving preventative care.
As the healthcare industry continues to transition to this new value-based reimbursement model, it is important to understand the benefits and challenges to this new model. We will look at the benefits and challenges of adopting this new model and explore the future of value-based care in 2017.
Defining ‘Value’ in Value-Based Healthcare
When it comes to the value-based model, we must determine who defines value. Furthermore, how is this value measured? Obviously, the goal is to provide effective healthcare that meets the patient’s needs at the lowest costs.
However, you must also account for value from other perspectives. For patients, yes, value means safe, compassionate care along with positive results and minimized out of pocket expenses. For healthcare employers, this value may mean healthier, more productive employees. For the general public, they may derive value from the increased health of the community.
Benefits of Value-Based Care
Value-based healthcare has many proven benefits, especially for patients. Compensation depends on qualitative metrics rather than quantitative, so providers are forced to provide quality care for their patients. The healthier their patients are, the more they can get paid for their care.
A major benefit that will result from this is patients will increasingly become more engaged in their healthcare.
Value-based care models will benefit greatly from the emergence of digital therapeutics and the adoption of telehealth services in 2017. This will probably be the year that healthcare really embraces technology. That bodes well for patients and providers alike. The benefits of many telemedicine, speech telepractice, and patient monitoring services have already been proven.
There are also benefits for healthcare providers under a value-based reimbursement model. Hospitals will be able to segment patient by outpatient and inpatient, which are usually the sicker patients. This allows them to put focus and resources on those patients to maximize their return. This workflow improvement leads to higher healthcare provider revenues because your resources can be focused where they need to be.
Challenges of Value-Based Healthcare
There will be some challenges to the industry widely adopting a value-base healthcare model. Implementation will be the most critical thing. As healthcare systems look to design and effectively integrate value-based payment models, they will need to know how to choose the model that is best for their system.
Not only that but employees may need to be trained on new technologies or new employees with the skills will be hired. This is sure to increase the number of travel physician jobs and provide great opportunities for healthcare providers that have the skills necessary to implement new services.
After implementation, there will also be a period full of pain points in understanding how a healthcare provider is affected by the new system. As hospitals and healthcare organizations look to maximize reimbursements, they will have to learn to optimize the new system.
Another challenge will be gaining the trust of your patients so that they engage with their healthcare. Yes, patients trust nurses and doctors, but remember that it is only recently that they started focusing on quality of patient care. Until healthcare providers can get patients to see that this new model will benefit them, it may be tough to get patients to engage.
Some communities do not have the resources to participate in some of the effective low-cost digital therapeutics that are emerging. That will be a barrier to getting those patients to engage with healthcare systems that will largely be based on new technologies.
2017 Value-Based Healthcare Outlook
With the President-elect Trump about to take office and the notion that Obamacare may be repealed, the healthcare industry outlook is uncertain. Even if Trump does not repeal the ACA (which would be a daunting task), there still could be changes in the industry that will affect the push for value-based health care.
However, if the trend of paying for value over volume continues, you can expect healthcare systems to start scaling up their infrastructure. You will see a change in the approach to healthcare this year with the mass employment of technologies in the healthcare industry.
Healthcare providers and administrators alike should prepare for their new role in a digital healthcare economy.