Government officials and healthcare organizations alike are always looking for ways to streamline healthcare and cut costs. This has been the subject of much research and testing in recent years. A healthcare organization’s revenue cycle is directly tied to its patient reimbursement model, so changing the way reimbursement is processed can have a major impact on how it takes and uses payment. One of the up-and-coming models that many healthcare officials are eyeing as a potential solution is Value-Based Care.
What Is Value-Based Care?
Value-Based Care (VBC) is a healthcare reimbursement model that is based on quality of care rather than quantity. It relies on accountability among providers and the occurrence of positive outcomes in patients. Where the Fee-for-Service model is based on the quantity of care a provider gives (i.e. the number of tests run and services provided), VBC is based solely on the overall effect that that care has on patients (i.e. positive vs. negative patient outcomes).
Prices are quantified and established based on the performance of the physicians and the historical prices of the services rendered. This puts much more emphasis on ensuring that providers take care of patients’ needs to the best of their ability in as few visits as possible rather than simply treating symptoms and waiting for patients to return. Beyond that, it creates a system in which, in order to run an effective revenue cycle, healthcare organizations must work hard to find ways to cut costs while also improving the level of care provided. This results in what is often called the “triple aim”: better care for individuals, better health for populations and lower cost of care. When these three metrics are met, a VBC model is well on its way to succeeding.
Value-Based Care Sub-Models
Value-Based Care is not a single healthcare payment model, but rather an overarching model and goal that can be implemented in several ways. Since value can be measured in many different ways and through different structures of payment, different methods exist that can effectively implement it, depending on the needs of the providers and payers involved. A few of these sub-models are as follows.
Accountable Care Organizations
Accountable Care Organizations (ACOs) are groups of healthcare organizations, physicians and other providers that work together in a network to provide quality care to patients. Originally developed by the Centers for Medicare & Medicaid Services (CMS) to provide care for Medicare patients, this model relies on the interaction and cooperation of teams of providers. This model compels these teams to collaborate and stay accountable to providing the right care at the right time, agree on treatment plans and avoid excess services and redundancy.
The Bundled Payments model is episode-based, meaning that patients pay a single price for an episode of care, such as being in the hospital for a given time for a surgery. All services provided during that time are combined into one price and then split up to pay for the different services once the bill has been paid. Again, in this model, the amount a patient and/or their insurance has to pay is determined by historical prices, which means that providers must find a way to save costs and be more efficient with the care they offer.
Patient-Centered Medical Homes
A Patient-Centered Medical Home (PCMH) is a care delivery model in which patient care is provided through a primary care physician, not unlike certain Managed Care instances. This centralizes the care a patient receives and, in a similar manner to ACOs, requires providers to collaborate as a team in order to give holistic care.
Benefits of Value-Based Care Models
Since healthcare costs are rising and patient satisfaction is often not, it has become vital to healthcare providers and payers that new techniques for billing and revenue cycle management be adopted. As the healthcare industry continues to search for new ways to stay financially viable, VBC is the type of care delivery and payment system that many organizations and government entities are eyeing as a solution. It comes with many benefits for healthcare organizations and patients alike.
1. Higher Efficiency of Care & Greater Patient Satisfaction
Since VBC models are reliant on quality, providers focus on providing medical solutions that work over the long term and on developing relationships with patients. This requires them to be more strategic and efficient with the care they give, which will also increase patient satisfaction, which is the end goal. Additionally, through VBC, providers do not face financial risk stemming from capitated payment methods. The better the care physicians can provide in one episode, the more rewards they will receive.
2. Patients Spend Less Money But Have Better Health
Because VBC is not dependent on the number of services provided, but rather their quality, patients won’t have to pay for things they didn’t need or that wouldn’t have worked. The focus is on providing personalized solutions that are agreed upon between them and their provider and which will lead to better outcomes in the long run. VBC rewards these outcomes for both the patient and the provider.
3. Prices Will Begin to Reflect Value
Prescriptions and physician services are often priced according to supply and demand principles, meaning prices are higher than many would desire or can afford. However, using Value-Based Care models could contribute to price changes that reflect the value that medicines and services have for patients. With the focus placed on the individual patient rather than how many services can be provided, it will become easier for manufacturers to tie the prices of their products to the value they provide.
4. Healthier Society and Reduced Risk
Since one of the main goals of VBC is to help society and communities as a whole become healthier, financial risk is reduced because it is spread out more evenly. Because financial rewards are tied to the satisfaction of patients, the more patients are satisfied with their care, the more financially stable healthcare organizations and providers will be.
Value-Based Care: Is It the Future?
VBC models are becoming increasingly popular in government circles, especially where Medicaid and Medicare are concerned. With the heavy influence of these programs in mind, it’s likely that more providers will come to see the benefits of using VBC models to improve their revenue cycle management. Granted, there are still some challenges to work through, such as interoperability with current systems, how to implement it fairly and how to adapt from other healthcare models to VBC. However, many experts are convinced that while change may be slow, it will be positive over time.
In the meantime, it will be important in the continuing future for healthcare organizations to look more closely at their revenue models and determine where costs can be cut while still maintaining patient satisfaction. This is where we at DECO shine. We work alongside clinical staff to provide the best financial outcomes while also helping patients find ways to pay their bills. If you have any questions about Value-Based Care or about how our organization can help yours, contact us today!