Defining & Implementing Value-based Healthcare
What is Value-based Healthcare?
In 2006, Michael E. Porter and Elizabeth Teisberg revolutionized healthcare by introducing the value equation (Value = Quality/Cost) asserting that improving value should be the top priority for healthcare leaders. Since then, the federal government has implemented various policies to accelerate the shift towards value-based care, such as Medicare Advantage, accountable care organizations, and bundled payment models.
Over time, value-based healthcare has emerged as a potential replacement for traditional, fee-for-service reimbursements based on quality rather than quantity. Unlike the traditional model, value-based healthcare is driven by data because providers must report to payers on specific metrics and demonstrate improvement.
The goal is straightforward but ambitious: Replace the nation’s reliance on fragmented, fee-for-service care with comprehensive, coordinated care using payment models that hold organizations accountable for cost control and quality gains.Source
At its core, value-based care focuses on improving patient outcomes while also curbing overall healthcare costs by enhancing integrated care. The overall goal is a healthier society, a more efficient healthcare system, and lower costs over the course of a person’s lifetime.
Continue Reading: The Future of Value-Based Healthcare
Types of Value-based Healthcare Programs
As payers look at designing future value-based payment models, it is important that they understand the current state of their market, their patient population, and how programs can fit with existing models. Value-based healthcare comes in a variety of forms, generally differing as to the risks assumed by providers and sharing of savings or losses.
An accountable care organization (ACO) is a group of doctors, hospitals, and other healthcare providers who come together voluntarily to give coordinated high-quality care to their Medicare patients. The goal of this level of coordination is to ensure that patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.
A bundled payment, or episode-based payment, is a single payment for services provided for an entire episode of care and can align incentives for providers to encourage them to work together to improve the quality and coordination of care.
The patient-centered medical home (PCMH) is a care delivery model that coordinates patient care through a primary care physician. The PCMH is designed to put patients at the center of their care and works to build better relationships between patients and their clinical care teams.
Why is Value-based Healthcare Important?
Traditionally, enhancing patient care quality and controlling healthcare costs have been perceived as opposing objectives. Simply increasing healthcare expenditure doesn’t always translate into better patient outcomes. In fact, it can sometimes result in unnecessary and time-consuming tests and procedures that prolong treatment or delay care.
The cost of an average stay in a hospital in the U.S. is now over $10,000.Source
However, there is mounting evidence to suggest that eliminating administrative inefficiencies in payer and provider organizations can enhance patient care quality across their lifespan. In some instances, regular access to physicians and continuous monitoring of chronic conditions can avert hospital stays altogether. This is a key driver behind the shift towards a value-based healthcare system, which emphasizes avoiding unnecessary tests, treatments, and hospital stays while improving patient outcomes.
Download the White Paper: How Collaboration in a Value-based World Improves Patient Outcomes and Helps Lower Cost
The Significance of Value-based Cancer Care
Many cancer programs now establish a multidisciplinary care team for new patients. During their first visit, patients typically consult with a radiation oncologist, medical oncologist, social worker, and financial navigator. If this isn’t feasible, sequential or virtual consultations often suffice. However, it’s crucial to ensure that the entire team is involved, as this is essential for delivering the best possible care to the patient.
Continue Reading: Bringing Value-based Care to Cancer
For payers, the complexity of cancer care continues to escalate, with rising costs necessitating the need to balance affordable care for their members with quality care.
Watch the On-Demand Webinar: Increasing Value for Cancer Care with Evidence-Based Treatments
How Does Value-based Healthcare Benefit Payers?
As healthcare costs continue to soar, payers are turning to value-based care models to drive down costs while enhancing patient outcomes. These models provide payers with greater controls to promote services that prioritize preventative care, not just the treatment of presenting illnesses. By improving population health, payers can reduce the need for services and lower the overall cost of care.
To achieve this, payers typically rely on data-driven insights to identify areas for improvement, collaborate with providers, and invest in medical technology. Payers can break down their approach into phased initiatives to drive incremental improvements towards their goals.
In anticipation of major growth drivers in the next few years, the US value-based healthcare service market size is anticipated to reach $6.15 trillion by 2030.Source
Collaborations in value-based care are becoming increasingly popular. They enable partners such as medical device makers, payers, and provider groups to develop programs, solutions, and initiatives that benefit both patients and healthcare stakeholders.
Watch the On-Demand Webinar: Accelerating Participation in Value-Based Programs
How Can Collaboration in a Value-based
World Improve Outcomes?
While the practice of healthcare continues to make advances in patient care with new research, procedures, and drug therapies, the business of healthcare and the adoption of healthcare technology tends to lag far behind. Manual processes that are often critical for value-based healthcare continue to perpetuate operating inefficiencies, administrative and clinical information silos, and frustration among payers and providers. Adding to these inefficiencies are the challenges of managing paper intensive requirements and electronic medical record (EMR) developments.
At the center of value-based care models are a robust, team-oriented approach, often led by the patient’s primary care doctor. Patients aren’t left to navigate the healthcare system on their own. The care team is there to support them along their healthcare journey. Teams are expected to focus on prevention, wellness strategies, and coordination throughout the care continuum, priorities especially important for those managing chronic conditions.
Streamlining communication between payers and providers can enable them to transmit clinical and administrative information in near real-time, improve the quality of patient care and reduce costs.
Watch the On-Demand Webinar: How Collaboration in a Value-based World Helps Improve Patient Outcomes
The Importance of Interoperability in Payer-Provider Collaboration
While many payer and provider organizations have found success with value-based efforts, barriers around data interoperability still prevent the alignment necessary to increase adoption and accelerate outcomes in value-based care. These challenges extend beyond operational workflows into areas of strategy, provider satisfaction, and member experience.
To take advantage of the various types of services and technology capabilities required for future success, forward-thinking payers are broadening their options and moving beyond traditional providers. These firms have employed several techniques to improve their position in the value-based healthcare services industry in the U.S., including partnerships, collaborations, joint ventures, and mergers and acquisitions.
Watch the On-Demand Webinar: Leveraging Interoperability to Advance Value-based Care
How Can Technology Help the Transition
to Value-based Healthcare?
Today, individuals are encouraged to monitor their activity, vital signs, and other health-related functions, as it has become a normalized and expected practice. By tracking movement, blood pressure and pulse, users gain insight into their activity patterns and body changes, allowing them to modulate their behavior and make healthier choices. This real-time monitoring, coupled with the ability to receive feedback, has become almost standard in the healthcare industry.
However, value-based healthcare requires more than just monitoring and feedback. It emphasizes the importance of partnerships between providers, payers, patients, and the entire societal environment surrounding the patient. The future of healthcare lies in creating an environment that fosters better healthcare and encourages partnership between all stakeholders. Technologically, this can be achieved, but it requires a paradigm shift in the healthcare industry.
Continue Reading: Future Tech & the Transition to Value-based Care
How Can Payers Get Started
with Value-based Healthcare?
The data-driven approach of value-based healthcare means that payers and providers share the common goal of keeping patients healthy while reducing costs over time. By addressing risk factors and early-stage diseases, it’s typically better for patients and often more cost effective than late-stage interventions and hospitalizations. Enhanced care coordination and data sharing can streamline administrative processes and reduce wasteful spending.
Savings don’t come from the denial of services; they come from ensuring that our members are receiving the right level of service at the right time and in the right setting.Source
To successfully implement a value-based healthcare program, payers should consider the following:
- Understand the current state of value-based healthcare in the market; the better that payers understand their current market programs, the more likely it will be that they can ramp up complimentary programs quickly
- Understand how value-based programs relate to their overall network contracting strategy
- Understand their membership
- Evaluate what it means to accelerate actionable insights
Once the payer’s programs of interest have been determined, the next phase is program design. Developing a flexible and adaptable solution that can pivot as needed throughout the payer’s value-based care journey is critical. The findings from value-based healthcare initiatives can improve quality and cost savings across other segments of their business.
Providers Can Help Speed Up the Transition to Value-Based Healthcare
To support a value-based system, healthcare providers must transition their existing technology systems to more robust solutions that support the transfer of patient data in a secure, timely, and comprehensive way. This doesn’t mean that it needs to be complex and expensive to implement and difficult to learn. Significant advancements have been made to support these efforts.
Increasingly, providers are turning to solutions that improve the quality of care and reduce administrative costs. Technology is helping pave the way to value-based care by significantly speeding up data transfer while providing an easy-to-implement solution to gain these efficiencies.
Download the White Paper: How Collaboration in a Value-Based World Helps Lower Costs
Have Value-based Healthcare
Programs Achieved Success?
For most providers, value-based healthcare programs are still relatively new, and many are still trying to implement the appropriate systems into their workflow. Although this change is expected to happen over an extended period, CMS has announced aggressive goals for making the move with Medicare providers and hospitals.
The transition from fee-for-service to pay-for-value has been referred to as one of the greatest financial challenges the US healthcare system currently faces. Healthcare Information and Management Society
The CMS goals would require healthcare providers to effectively navigate the challenges posed by a payment model that requires sharing and analyzing of data in ways that fee-for-service and its legacy revenue cycle management systems and business processes never contemplated. (source)
We’re used to a healthcare system that takes care of people after they’re already sick. Value-based healthcare’s triple aim is to improve the care experience, improve the health of individuals and populations and reduce the costs of healthcare. To do this, value-based healthcare moves beyond sick care and adopts a proactive, team-oriented and data-approach to keeping patients healthy. (source)
Eviti Connect for Oncology and Value-Based Healthcare
Eviti Connect for Oncology enables providers and payers access to a comprehensive library of evidence-based treatment standards and protocols for all cancer types. Payers can easily enforce preferred treatments known to offer the best outcome at the best cost while assuring providers that prescribed treatments meet the clinical reimbursement requirements and reflect the most current, evidence-based standards of care. Collaboration between the payer and provider at the point of care enables quick, often immediate, prior authorization for treatment – allowing patients to begin treatment without delay and assuring all stakeholders of value-based healthcare.
The acceleration of value-based healthcare results from rising costs, a higher focus on quality of care, and rapidly advancing technology. To do this, value-based healthcare moves beyond sick care and adopts a proactive, team-oriented, and data approach to keeping patients healthy. As healthcare programs continue to be reimagined, now is the time for payers and providers to work together to identify the right opportunities to roll out value-based solutions. Learn more about the role of prior authorization in value-based cancer care.
What is the Future of Value-based Healthcare?
The idea of value-based care has become an essential component of healthcare today. But where does it go from here? Will it continue to change and adapt to current and future healthcare trends? Whatever the future holds, several current healthcare trends may determine where value-based care ends up, including digital health, consumerism, data management, and precision medicine. It all points toward one important focus: patient-centric care.
As healthcare models continue to be reimagined, now is the time for payers and providers to work together to identify the right opportunities to roll out value-based solutions. Tools like Eviti Connect and NaviNet Open are pillars in the foundation of a value-based healthcare system. Moving the future of healthcare to value-based care will help to pursue equitable, accessible, and quality care for all patients.