Health IT Universe
For decades, healthcare reimbursement has largely followed a fee-for-service (FFS) model in the US. In this system, providers are paid for each test, procedure, or visit a patient receives. This could sometimes result in an increased number of unnecessary tests or procedures. The focus was more on volume and hence, the patient’s well-being was the least priority in most cases. It circled down to the patients coming back for further visits, which meant more money for the doctor. This increased the cost per patient and resulted in considering an alternative method to incentivize the providers more efficiently. The concept of value-based care was crafted with a purpose to bring down the cost by shifting focus to quality care which benefitted the patients and providers alike. As the treatments would be focused on patient outcomes under VBC, revisits, escalations and readmissions would greatly reduce. The doctors could focus more on patients who actually needed their care. It proves to be a win-win in most cases. It is interesting to note that within value-based care, certain contracts work best under fee-for-service. A growing emphasis on cost-effectiveness and quality along with a holistic approach to care were the interesting aspects of the value-proposition laid forward by value-based care which has amplified the shift to VBC.
Unlike Fee-for-Service, Value-Based Care (VBC) shifts the focus to patient outcomes and quality metrics. A seven-fold increase in states and territories across the US supports the growing influence of VBC.
Value-based care continues to pick up steam in healthcareāespecially with Medicare and Medicaid having already begun rapidly adopting value-based payment models. Healthcare delivery in the United States has long relied on the FFS model. As evidenced by data from 2020, 64% of providers were compensated based on the quantity of services rendered. According to the 2022 survey conducted by the American Academy of Family Physicians (AAFP), 49% of practices reported being involved in some form of value-based payment model, while an additional 18% were in the process. Thatās evidence of the growing momentum towards rewarding healthcare quality and achieving positive health outcomes.
This article explores both approaches, particularly focusing on the increasing trend of shifting towards value-based care.
Fee-for-service vs value-based careĀ
| Aspect | Fee-for-Service (FFS) | Value-Based Care (VBC) |
|---|---|---|
| Payment Structure | Based on quantity of services rendered. More payment for more services or visits. | Based on patient outcomes, quality metrics, and cost-efficiency. Irrespective of the number of services or visits, the effectiveness of each is considered. |
| Patient Focus | Focuses on acute care and treating specific conditions. Works best for episodic treatment. | Emphasizes preventive care, chronic disease management, and holistic patient well-being |
| Care Coordination | Often fragmented, with less emphasis on coordination | Promotes coordinated care among providers and across settings |
| Quality of Care | Quality may vary based on service volume | Focuses on achieving high-quality outcomes and patient satisfaction |
| Technology Utilization | Less emphasis on data analytics and technology integration | Relies on technology for data analytics and patient management tools |
| Long-term Goals | Immediate revenue focus, less emphasis on long-term health outcomes | Seeks to improve long-term health outcomes and patient well-being |
| Effect on Patients | More choices, higher costs, fragmented care | Better outcomes, lower costs, holistic care |
| Effect on Providers | Financial stability, administrative burdens, overutilization risks | Quality care, infrastructure investments, care coordination. |
| Effect on Payers | Unpredictable costs, potential for overutilization. | Cost savings, improved health outcomes. |
From Volume to Value: Why the Shift from Fee-for-Service to Value-Based Care Matters
Cost-effective for payers, providers and patients in the long-term:
Both FFS and VBC are payment methods at the core despite the differences in approach and impact. But VBC has proven to lower the healthcare costs in general.
Providers: Adopting VBC necessitates initial investments in technology and infrastructure, such as robust electronic health records (EHRs), user-friendly patient portals and data analytics tools. These tools enable providers to engage with patients, track patient outcomes, improve care coordination, and demonstrate value to payers. While the upfront costs may pose financial challenges, VBC offers more potential long-term financial benefits. Through predictive analytics and preventive care, providers can achieve cost savings by reducing unnecessary procedures and hospitalizations.
Payers: VBC models realign financial incentives to prioritize preventive care and effective management of chronic diseases. This shift can lead to lower reimbursements for providers who fail to meet quality metrics but also presents opportunities for payers to negotiate fair reimbursement rates that encourage providers to deliver high-quality, cost-effective care.
Patients: VBC models aim to enhance care quality while reducing out-of-pocket costs. By focusing on preventive holistic care, and proactive management of chronic conditions, the need for expensive medical interventions and hospitalizations is reduced. This approach can lead to better health outcomes, improved overall satisfaction with healthcare services, and reduced the financial burden associated with managing chronic illnesses.
Patient-centered treatment enhances outcomes and satisfaction:
Value-based care is more patient-centered and is focused on personalizing treatment plans to enhance the patientās overall health outcomes. When the providers personalize the care plans considering the needs and preferences of patients, it also improves adherence and patient satisfaction.
Technology improves accessibility:
The adoption of telemedicine, remote monitoring, and other digital health solutions expands access to care, especially in underserved communities and rural regions. Technology supports real-time engagement between patients and providers through virtual consultations and proactive management of chronic conditions.
Emphasis on preventive care saves health and cost:
Value-based care models encourage providers to invest in preventive care initiatives that help avert or reduce the incidence and severity of chronic diseases. Encouraging healthy behaviors, as well as regular screenings for health abnormalities, prevents the necessity for higher-cost interventions and hospitalizations, thus saving money in the long run.
Interdisciplinary collaboration promotes holistic healthcare:
Integrated care requires collaboration among primary care physicians, specialists, other hospitals, and community organizations. With integrated care, transitions among care settings will be much easier. With better continuity of care and less duplication of services, patients can enjoy improved outcomes. Thus, each patientās health will be taken care of holistically.
Feedback-driven care leads to quality improvement:
Data analytics and patient feedbackādriven quality enhancement initiatives enable providers to recognize areas for improvement and fine-tune the processes in care delivery. By measuring outcomes, tracking performance metrics, and putting evidence-based guidelines into practice, providers meet quality standards and achieve better patient satisfaction.
Specialized care gets more accessible
According to a 2022 survey by Merritt Hawkins, it takes around 26 days to get a cardiologistās appointment in the metropolitan areas of America. With the basics getting treated by primary care physicians, specialized care becomes more accessible to everyone. With most patients not requiring an escalation to a specialist can consult a primary care physician, those who critically need to consult a specialist wonāt have to wait as long under VBC. Specialist providers will be able to give quality time to patients in need. This will free up unnecessary crowds at the specialist providersā facilities which also implies better experience for the patients.
The Road Ahead: VBC as the Future of Healthcare
The future of value-based care will see more constructive use of Generative AI, payer consolidations, mergers and acquisitions, increased focus on SDOH, growth in specialty ACOs, growing telehealth usage and more technology-driven progression. AI-powered virtual assistants will enhance patient engagement and streamline administrative tasks, improving healthcare delivery efficiency. Technological innovations are expected to streamline healthcare operations and enhance accessibility and management of large patient populations effectively. IoMT will play a vital role in remote patient monitoring.
CMS is planning newer VBC models based on the metrics and feedback collected from the existing systems. Collaboration with community partners and social service agencies will mitigate barriers like housing instability and food insecurity. Value-based payment models (VBPMs) will expand, incentivizing providers based on quality outcomes and cost-efficiency metrics. Enhanced transparency in performance reporting will drive continuous quality improvement and align incentives across stakeholders.
Personalized medicine and genomic insights will advance disease prevention and treatment under VBC. Genetic testing and biomarker analysis will tailor therapies to patient characteristics, improving treatment efficacy and minimizing adverse effects. Integrating genomic data into VBC frameworks will optimize patient outcomes and reduce healthcare costs associated with trial-and-error treatments. Around 90 million people are expected to be covered under VBC by 2027.āÆBy 2030, the CMS Innovation Center (CMMI) aims to have 100% of Medicare beneficiaries in an accountable relationship.
Conclusion
The transition from Fee-for-Service to Value-Based Care represents a critical evolution in healthcare, prioritizing patient outcomes, cost-effectiveness, and coordinated care over traditional volume-driven incentives. VBC not only reduces healthcare costs but also increases accessibility in the long run.
As CMS targets having all Medicare beneficiaries and most Medicaid beneficiaries enrolled in accountable care programs by 2030, the landscape is set to undergo profound changes. These initiatives underscore a commitment to promoting health equity and improving care delivery for underserved communities. blueBriX is committed to advancing this transformative model, placing it at the core of our initiatives to innovate and lead in shaping a future where healthcare is accessible for all.
Embrace the future of value-based care with blueBriX. Letās connect and strategize how you can benefit by partnering with blueBriX to build and enhance your unique care delivery solutions.