Value-based care and outcomes-focused reimbursement models are becoming increasingly common in today’s healthcare landscape. Research from Price Waterhouse Cooper (PwC) reveals that the adoption of value-based payment models will triple by 2021. This rapid rise in popularity for VB-C is mainly due to its significant benefits to providers, payers, and, most importantly, patients. Value-Based Care is a system that rewards health service providers for quality and cost-effectiveness rather than the number of services provided or reimbursed.
When voluntary payment models are mandatory, it is crucial to plan for value-based care. The HealthLeaders 2021 Value-Based Health Survey assesses the executives’ perception of their readiness to navigate their way from quantity to value.
With the significant changes in the Bundled Payments for Health Improvement Advanced (BPCIA) and the CMS demand for compulsory bundles in 2023, hospitals across the United States may be facing an eight-figure cost. Hospital administrators must be able to adapt and find new ways to improve care for patients and profit margins.
The HealthLeaders Intelligence Report highlights the crucial factors that are essential to VBC’s success; many of them fall under the radar when the initial stages of planning for an organization. The report also outlines the lessons learned from organizations that switched to VBC in 2014. Here are 6 Things You Need To Know About The Value-Based Care Study Released — Does Your Approach Measure Up?
What is Value-Based Care?
Value-based care is a system that rewards health service providers for quality and cost-effectiveness rather than the number of services provided or reimbursed. This is an alternative payment model, which means it is a new way of paying for healthcare services rather than the traditional fee-for-service model. In the traditional model, healthcare systems are paid for each service they provide. In value-based care, providers are paid for the quality of care they provide and the unmet healthcare needs of their patient population. Traditional healthcare reimbursement is based on the volume of services provided and often fails to incentivize quality care, let alone focus on improving health outcomes.
On the other hand, value-based care rewards providers for the outcomes they produce and their ability to keep their patients healthy while minimizing the cost and risk of treatment. By focusing on value rather than the volume of services provided, value-based care empowers providers to adopt a more patient-centric approach. It can be a huge advantage for providers and the patients they serve.
The Benefits of VB-C
There are many direct and indirect benefits to providers and patients when a VB-C system is implemented. For providers, VB-C models provide an opportunity to reduce operational costs, expand their service offerings, and improve staff satisfaction. For patients, VB-C can result in better access to care, better outcomes, and improved quality of life. As a system, VB-C can also help improve provider relations and consumer trust, which is especially important in today’s political climate. To be successful, providers must be strategic in their approach to VB-C. This includes choosing the right model, finding partners, and establishing a solid foundation for success.
Today’s healthcare climate is more challenging than ever before. Due to the increasing cost of care, changing patient preferences, and tightening third-party reimbursement models, providers are tasked with finding new ways to deliver value in their services. In order to meet these demands, many organizations are implementing value-based care strategies. Value-based care focuses on aligning reimbursement incentives with outcomes rather than the service quantity or cost. With increasing pressure from payers and CMS to demonstrate the value of our clinical activities, many health systems have begun shifting towards a value-based approach.
Pwc’s Recommendations for VB-C Success
With the value and benefits of VB-C so evident, it’s important to note that not all models are created equal. Many providers struggle to succeed with VB-C due to a lack of strategic planning and preparation. To help providers overcome these hurdles, PwC has released a “VB-C Success Playbook” outlining five critical recommendations for VB-C success. While this is not an exhaustive list, it is a great place to start.
Finding the Right Partners for your VB-C Strategy
Building a successful VB-C program is something you can do with others. You’ll likely need to bring in several partners and service providers to achieve your desired results. To determine which partners you need, it’s important first to identify your VB-C strategy and goals. You can create a “value map” that outlines the core services required to meet those goals and objectives. With this map in place, you can identify the best partners for your VB-C strategy.
Establishing a Solid Foundation for Success
Like any new initiative, VB-C success begins with a strategic and well-thought-out approach. It includes everything from your VB-C strategy and goals to the services you provide and the strategies you deploy to meet those goals. For example, to build a strong foundation for VB-C success, providers should consider partnering with various providers and service lines. The goal is to create a diversified portfolio of services that can meet a wide range of healthcare needs. This approach can help reduce risk and provide a wider source of income. It can also help ensure that patients consistently receive the care they need without putting unnecessary strain on any single provider.
Diversifying your Portfolio and Including Ancillary Services
One way to diversify your VB-C portfolio is by including ancillary services. Ancillary services are related to and supportive of the core services provided. They provide added value to patients and help keep them healthy while maximizing value for providers. Ancillary services can help reduce overall risk and improve outcomes, which makes them an essential piece of the VB-C puzzle. These ancillary services can include items like remote monitoring devices and home care services. Remote monitoring devices, for example, can be used to monitor chronic conditions or follow up with patients after specific procedures or surgeries. Home care services can be provided by nurses, physical therapists, and other medical professionals to help patients recovering from a hospital stay. This is just one example of an ancillary service that can be included in a VB-C strategy.
Bottom line
Despite the many benefits of VB-C, many healthcare providers have yet to adopt this approach. It is likely due to a lack of understanding and familiarity with the model and a fear of change. As PwC’s findings show, however, VB-C could be the key to success for many providers. It’s certainly not an easy transition, but with the right approach and partners, almost any healthcare system can benefit from VB-C. Value-Based care (VBC) is a reimbursement model that rewards healthcare organizations for improving patient outcomes while reducing costs and other measures of usage. VBC was made possible with CMS’s release of the Quality Payment Program in 2017.
