The remedy to improve health care: The value-based model

Doctor visiting patient

Critics of the pay-for-service healthcare model have long argued that it isn’t the most efficient way to provide health care. Under this model, compensation from commercial health insurers, Medicare, and Medicaid is based on the volume of patients a provider serves. Long-term health, reduced cost, and equal access aren’t part of the equation.

The pay-for-service approach is reactive, not proactive. Value-based care, on the other hand, is proactive. And Wilmington Health is a proud participant in and proponent of this model of health care.

A value-based care plan ties payment to patient outcomes rather than services rendered. It holds providers accountable for improving patient outcomes and gives them the flexibility to administer the right care at the right time. 

Value-based care can provide a range of benefits:

  • Improved Quality: Value-based care focuses on delivering high-quality care that leads to better patient outcomes. It emphasizes preventive care, early intervention, and evidence-based treatments, resulting in improved health outcomes for patients.
  • Patient-Centered Approach: Value-based care places the patient at the center of healthcare decision-making. It aims to meet individual patient needs and preferences, ensuring that care is tailored to the unique circumstances of each patient.
  • Coordinated Care: Value-based care encourages healthcare providers to work together and share information to provide coordinated care. This reduces medical errors, improves communication, and enhances the overall patient experience.
  • Cost Reduction: By emphasizing preventive care and better management of chronic conditions, value-based care aims to reduce healthcare costs in the long run. It focuses on avoiding unnecessary tests, procedures, and hospitalizations, leading to overall cost savings.
  • Focus on Population Health: Value-based care takes into account the health of the entire population, not just individual patients. It focuses on disease prevention, health promotion, and community health initiatives, leading to improved health outcomes on a larger scale.
  • Incentives for Quality: Value-based care models often include financial incentives for healthcare providers to deliver high-quality care. This motivates providers to focus on patient outcomes, care coordination, and patient satisfaction.
  • Enhanced Patient Engagement: Value-based care encourages patients to actively participate in their healthcare decisions. It promotes shared decision-making, patient education, and self-management of health conditions, leading to better patient engagement and empowerment.
  • Continuous Improvement: Value-based care is based on a continuous learning and improvement cycle. It uses data and feedback to identify areas for improvement, implement best practices, and adapt care delivery to achieve better outcomes over time.
  • Focus on Health Equity: Value-based care aims to address health disparities and promote health equity. It recognizes the importance of providing equitable access to healthcare services and reducing healthcare disparities among different populations.
  • Provider Accountability: Value-based care holds healthcare providers accountable for the quality and efficiency of the care they deliver. It encourages transparency, performance measurement, and public reporting of outcomes, ensuring that providers strive for excellence. 

What is value-based care?

Value-based health care fosters a team approach to patient care in which data is shared and treatment is coordinated. It’s easier to measure outcomes when care is integrated. This is a patient-centered model, in which a primary physician leads the patient’s clinical care team. And one of the best parts of the team approach is patients’ involvement in their care.

Value-based care agreements stipulate that patient-improved health leads to provider compensation. As far as patient health goes, this model rewards providers who help patients get to better health. That’s the model of value-based health care for hospitals and physicians. 

This includes reducing the effects and incidence of chronic disease and leading a healthier lifestyle. It’s an alternative to fee-for-service compensation.

How does value-based health care work?

When providers work together, they can share information and coordinate their efforts more effectively. They communicate with each other, share patient records, and collaborate on treatment plans. This collaboration helps to prevent medical errors, duplication of tests or treatments, and unnecessary hospital visits.

For patients, being part of a value-based model means that their healthcare providers are working closely together to provide seamless and coordinated care. They have a better understanding of the patient’s medical history, medications, and overall health. This results in fewer misunderstandings, better management of chronic conditions, and improved outcomes.

One popular type of value-based care model is realized in the accountable care organization (ACO) arrangement. With a focus on preventive care, ACOs emphasize regular check-ups, screenings, and education to help patients stay healthy and to help catch any potential health issues early on. By focusing on prevention, ACOs aim to keep patients healthier and avoid costly treatments or hospitalizations.

Another benefit of ACOs is that they strive to make healthcare more affordable. By coordinating care and eliminating unnecessary services, they can reduce healthcare costs. This often translates to lower out-of-pocket expenses for patients, such as lower copays or deductibles.

Why is value-based health care important?

Widespread adoption of this model could fix the skewed incentives associated with fee-for-service systems. There are many reasons value-based care is critical. Among them:

Lower costs for patients

Chronic conditions are complex, expensive, and time-consuming to manage. Some of the leading chronic conditions in the United States include:

In value-based care, the goal is to promote rapid recovery and prevent the onset of chronic diseases. Under this model of care, patients can reduce doctor visits, medical tests, and procedures. They can spend less on prescriptions and improve their short- and long-term health.

Regulated costs and reduced risks

With value-based care, the risk gets distributed across a broad patient population. The healthier the population, the fewer claims that are made. This means less depletion of payers’ premium investments. 

To add efficiency and help ensure that a patient’s full care cycle is financially covered, some value-based care providers also allow for capitation, a payment arrangement in which care providers and/or organizations are paid a set, risk-adjusted amount of money up front to cover the predicted costs of a patient’s treatment over a certain period of time. In addition, this approach helps cover long-term care for chronic conditions for a period of a year or more.

Supplier costs adjusted to patient outcomes

Suppliers can align goods and services with positive patient outcomes and lower costs. That’s a key selling point with national health expenditures on prescription drugs steadily rising. 

How can the ACO model help patient outcomes?

An ACO can have a positive impact on patient outcomes in several ways:

  1. Care Coordination: ACOs prioritize care coordination among healthcare providers. This means that doctors, specialists, hospitals, and other healthcare professionals work together, share information, and collaborate on treatment plans. This coordinated approach helps to ensure that patients receive comprehensive and seamless care, reducing the chances of medical errors, unnecessary tests or treatments, and gaps in care. As a result, patient outcomes improve.
  2. Preventive Care and Early Intervention: ACOs emphasize preventive care and early intervention. They focus on regular check-ups, screenings, and education to prevent or catch health issues in their early stages. By identifying and addressing potential health problems early on, ACOs can prevent the development or progression of diseases, resulting in better patient outcomes.
  3. Chronic Disease Management: A significant portion of healthcare costs and patient morbidity is attributable to chronic diseases. ACOs place emphasis on managing chronic conditions effectively. They implement care plans, medication-management strategies, and lifestyle interventions to control chronic diseases such as diabetes, hypertension, and heart disease. By proactively managing these conditions, ACOs can prevent complications, improve patient health, and reduce hospitalizations.
  4. Data-Driven Decision Making: ACOs utilize health data and analytics to make informed decisions about patient care. They track and analyze patient outcomes, treatment effectiveness, and population health trends. By leveraging this data, ACOs can identify areas for improvement, implement evidence-based practices, and optimize care delivery to enhance patient outcomes.
  5. Patient Engagement and Education: ACOs encourage patient engagement and education. They strive to involve patients in their own care decisions, provide clear information about treatment options, and support self-management of health conditions. When patients are actively engaged and empowered in their care, they are more likely to follow treatment plans, adopt healthier behaviors, and achieve better health outcomes.
  6. Performance Incentives: Some ACO models incorporate performance incentives for healthcare providers. These incentives motivate providers to focus on delivering high-quality care and achieving positive patient outcomes. Financial rewards are often tied to meeting specific quality benchmarks, patient satisfaction scores, or cost-saving targets. By aligning incentives with better patient outcomes, ACOs encourage providers to continuously improve the quality of the care they deliver.

Overall, accountable care organizations prioritize care coordination, preventive care, chronic disease management, data-driven decision making, patient engagement, and performance incentives. By emphasizing these aspects, ACOs can contribute to improved patient outcomes and overall healthcare quality.

Caring for the entire patient population

Dr. Catherine Daum works in Internal Medicine at Wilmington Health. She says value-based care is about caring for an entire population.

“We take care of patients who manage to get here to the office for an appointment,” Dr Daum said. “But there are many patients who consider themselves our patients, but they can’t get here. Value-based care requires us to care for our entire patient population.”

Wilmington Health has worked to meet the challenge. It provides home and video visits, among other avenues to care.

“We have a chronic-care management team, so we’re trying to take care of our patients,” Dr. Daum said. “Wilmington Health is great at value-based care because of our belief in it. And we’ve tried to put systems in place that would help patients get and stay well.”

U.S. participation in value-based care is increasing. Better accessibility and financial rewards will help, especially in disadvantaged or rural areas. Research continues into how it affects patients and providers and what succeeds. Wilmington Health is proud to take part to provide TRUE Care through evidence-based programs like these.

Learn more about value-based care at Wilmington Health today.