Traditionally, enhancing patient care quality and controlling the cost of healthcare have been opposing objectives. Increasing the amount spent on healthcare does not always translate to better patient outcomes, and increasing the costs can also make it prohibitive to the wider public. In fact, it can also sometimes result in unnecessary and time-consuming tests and procedures that prolong treatment or delay the necessary care.
There is mounting evidence to suggest that eliminating administrative efficiencies in payer and provider organizations can enhance patient treatment quality. In some cases, regular access to physicians and continuous monitoring of chronic conditions helped avert hospital stays completely. The key behind this shift has been value-based healthcare, which emphasizes improving patient outcomes and avoiding unnecessary tests, treatments, and hospital stays.
Value-based care (VBC) can be defined as a healthcare delivery model that rewards healthcare providers with incentives based on the quality, not quantity, of services rendered. Quality is determined by patient outcomes.
At the core of this model of healthcare is the idea that providers should place quality over quantity. Delivering high-quality, comprehensive, and compassionate medical attention has always been the primary motivation for care providers, but the traditional fee-for-service delivery model used financial incentives that did not align with this principle. Most policymakers and payers also prioritized the potential for cost savings rather than quality improvement or population health.
The benefits of VBC are dependent on prevention, helping patients avoid developing new conditions and managing existing ones through individual outreach and population health initiatives. When providers’ top priority is to deliver high-quality, patient-centered treatment, both providers and their patients thrive.
Other leading benefits of value-based care include:
Patients receive holistic treatment that also accounts for social determinants of health. They are supported by their care team and community, leading to more accurate diagnoses, effective treatment plans, and positive health outcomes. According to research published in 2022, Medicare Advantage members saw 5.6% fewer hospitalizations and 13.4% fewer emergency department visits compared to those treated in fee-for-service arrangements.
From accountable care organizations to patient-centered medical homes and beyond, all value-based care models are designed to incentivize providers to work as an integrated team, sharing knowledge and expertise and identifying gaps in coverage. This level of interprofessional collaboration benefits patients, who receive better care, and providers, whose work is distributed more evenly. This can reduce stress levels and increase job satisfaction in all healthcare professions.
Medicare Advantage members affiliated with value-based physicians are more likely to receive preventative screenings and adhere to any treatment plans than those under fee-for-service models. By delivering more consistent preventative care, providers can significantly reduce patients’ risk of disease, disability, or death.
By placing the patient at the center of everything rather than profits, this healthcare model has the potential to dramatically increase patient satisfaction. This, in turn, leads to higher rates of patient retention.
Emphasis on quality over quantity allows physicians to take on smaller patient loads, which significantly reduces their administrative burden. It also enables them to focus on their area of expertise and have more meaningful and fulfilling patient interactions. The result is lower stress levels, increased job satisfaction, and less risk of physician burnout and turnover.
Better patient outcomes, lower admission and readmission rates, and reduced administrative burden all mean cost savings for providers. The VBC model allows for stronger cost controls. A healthier overall patient population also equals fewer patients requiring services, thereby reducing the total costs to payers.
Society benefits from VBC models, which eliminate barriers to high-quality, holistic care and empower patients to lead longer, healthier lives
Despite its many benefits, a few hurdles need to be cleared. These include:
Disparate systems.
Patients may see multiple physicians, specialists, and other healthcare providers throughout the course of their treatment. Oftentimes, each of these providers utilizes a different system for storing and processing clinical data, electronic health records, provider network data, and more. The lack of interface compatibility makes it more difficult to shift toward value-based care, preventing payers and providers from sharing data in a timely manner, conducting important analyses, and having productive conversations during each visit.
Outdated workflows.
Although many physicians and other healthcare organizations now offer web-based patient portals, mobile apps, and other digital solutions, others continue to rely on paper-based systems for treatment coordination. Setting up data integrations, automating essential processes, and prioritizing use cases can help bring workflows up to speed.
Lack of internal resources.
This model requires a cultural shift among payers and providers. On the provider side, this can be easier said than done, given that physicians and other healthcare professionals are often stretched thin and have little time to devote to value-based care, especially when just implementing this new model. Automation can help reduce providers’ administrative burden, enabling them to dedicate their focus on care, not paperwork.
Lack of support.
One of the biggest obstacles is a lack of stakeholder buy-in. Though it is worthwhile to make the switch to value-based healthcare, this model requires the support of many different healthcare leaders and careful coordination across multiple organizations, each with its own varying levels of complexity and unique business processes.
Financial risk.
Value-based healthcare models have the potential to be more profitable than fee-for-service models, but they also shift the burden of financial risk onto providers. This has made some physicians and healthcare organizations reluctant to make the switch.
Switching from fee-for-service to value-based care will take some time. A lack of standardized performance metrics has made it difficult for physicians willing to make the change to calculate their success. Implementing new technology and data systems may also be an obstacle to some providers. In the long run, however, this shift in care models can potentially reduce redundant medical costs and improve patient care.
Whether you are a new medical practice or are already established in your area, our team of consultants can help your practice reach its highest potential. Your business strategy can make or break your organization. Our professionals can help you transition from fee-for-service to the value-based care model, so you and your patients can reap the benefits.
Good Stewart Consulting is ready to help you make the change, all while reaching your business goals. Contact us today and begin shaping the future of your practice.