Basics of Value-Based Care
The patient reimbursement model plays a crucial role in patient satisfaction, providers are always trying to improve the patient experience by reducing the cost of service. Most providers use a fee-for-service (FFS) model, which incentivizes physicians based on the number of services provided instead of the quality of care. But value-based care seeks to change the way patients receive healthcare, ultimately resulting in various benefits for everyone involved. In this article, we explain what Basics of Value-Based Care is, how it’s different from traditional reimbursement models, and how both your patients and your practice can benefit from adopting a value-based healthcare model.
What is Value-Based Care?
Value-based healthcare is a pricing model that incentivizes your practice based on the quality of services you provide to patients. Within a value-based care model, your practice is compensated depending on a patient’s health outcomes. On the other hand, the traditional FFS model pays based on the number of visits, tests performed, and prescriptions administered. Value-based care puts more emphasis on taking care of patient’s medical needs in as few visits as possible and to the best of the physician’s ability. Value-based care tries to: improve the quality of healthcare; improve the patient experience; lower costs for patients; and improve the care team’s experience.
Under FFS models, medical providers paid per service, which means the more tests and procedures they prescribe to patients, the higher they get paid. Since the focus is on the number of services, patient care tends to get ignored. Physicians spend less one-on-one time with the patients and prescribe more tests without getting to the root of what patients may be experiencing, thus impacting the overall health outcome. Value-based care is driven by data; as providers have to track and report specific quality metrics to demonstrate improvement in patient health outcomes. Things such as hospital readmissions, adverse events, population health, and patient engagement during treatment are some of the metrics evaluated.
Main Types of Models
Accountable care organization (ACO): An ACO is a network of doctors, hospitals, and other providers that works together to offer coordinated care to Medicare beneficiaries. Under this type of value-based care, network providers share in the savings if the ACO is able to provide adequate care and high-quality services that reduce healthcare costs for patients. If the ACO provides excellent care and services, everyone shares in those cost savings, but if care quality isn’t adequate, providers in the network may have to repay Medicare for not delivering better care.
Bundled payments: Bundled payments allow patients to pay a single price for the services received during an entire episode of care, even if multiple providers have treated the same patient during an episode. The payment is bundled because all physicians, settings of care, and procedures are paid out together based on the treatment outcome. For instance, if a patient has surgery, the Centers for Medicare & Medicaid Services (CMS) would pay the hospital, surgeon, and anesthesiologist bundled together based on historical prices instead of paying each separately. If the providers in a bundled model are able to lower the cost of services below the bundled price, they can pocket the savings. But if the costs are more, they are responsible for the price difference.
Benefits of Value-Based
Lesser costs: Value-based care doesn’t incentivize practitioners for throwing things at the wall to see if they stick. That means providers won’t benefit from recommending services their patients may not need or treatments that may not work, and that’s going to save patients money. By encouraging practitioners to focus on providing personalized solutions to each patient’s underlying health issues, value-based care helps achieve better outcomes in the long run.
Better patient experience: A value-based model requires providers to be more efficient and strategic with the care they offer during each patient visit. It rewards them for delving deeper into the underlying problems patients may be experiencing instead of just running several tests, which can be costly, stressful, and uncomfortable for patients. The doctor-patient experience is less transactional and more personal. During initial consultations, doctors and nurses spend time with their patients to get a more holistic idea about the reason for their visit. This improves the care experience for patients, as their needs are personally attended to.
Healthier society: When healthcare costs are affordable, more people can access the quality care they deserve, which means they’ll be more likely to address chronic health issues earlier on. Patients with chronic diseases are incentivized to care about their own health because they aren’t nervous about the financial risk. They’re more likely to seek help immediately and take control of managing their disease because they’re confident they have a personalized plan in place that is centered around their health and needs.
Value-based care is the future
Value-based care is becoming more and more popular because of the incentives the government is offering providers to make the change. With new legislation being passed, more providers are expected to make the shift and realize the benefits a value-based care model can give to their practice and patients. One of the key challenges practitioners face is effectively tracking the metrics required to determine ‘value’ in a value-based model. A healthcare organization will need to track staffing data, time and attendance of patients, clinical data, patient acuity data, and a bevy of other things to determine how to calculate the cost of healthcare.
We hope that you got understand on basics of value-based care. For more information on value-based care and its successful implementation, you can also refer to the AMA website. MedicalBillersandCoders (MBC) is a leading provider of outsourcing medical billing and coding services. Our billing and coding expertise over various medical specialties ensures quick and accurate insurance reimbursements. To get the latest updates on medical billing and coding, subscribe to our newsletter or visit our latest blog section.