By Kim Hegeman
Value-based health care focuses on improving patient outcomes while reducing health care costs. This patient-centered approach differs from the fee-based method in which doctors are paid for each service performed.
The health care industry is changing, and many believe the current system is not sustainable. Value-based care is touted as one of the methods that could replace the fee-based method. But value-based care is still a new and unfamiliar concept for many stakeholders in the industry.
As a starting off point, we’ve broken out some of the pros and cons to the value-based care method. It’s important to note that the pros and cons can vary depending on the specific context, healthcare system, and implementation strategy of value-based health care.
Four Pros to Value-based Care
1. Improved Patient Outcomes
The patient-centric focus of value-based health care emphasizes better health outcomes, improved patient satisfaction, and increased engagement from patients in their own health care.
It also focuses on the health and well-being of communities as a whole, encouraging proactive measures to address the social determinants of health while promoting preventive care.
2. Cost Savings
By focusing on prevention, early intervention, and efficient care delivery, value-based health care can lead to cost savings for both patients and health care systems.
“Nobody wins in a scenario where people aren’t getting needed preventive care or aren’t having appropriate chronic disease management because, ultimately, those become much more costly if they’re not managed effectively or caught early,” says Krista Hoglun, Chief Executive Officer at Security Health Plan. “There’s a lot of data and analytics in a value-based arrangement looking at who needs to get preventive care and what’s the strategy for outreach.”
3. Improved Quality
This approach encourages health care providers to continuously improve the quality of care they deliver. It promotes evidence-based practices, fosters innovation, and encourages the adoption of best practices.
4. Accountability and Transparency
Value-based health care holds providers accountable for delivering high-quality, cost-effective care. It encourages transparency in outcomes and performance metrics, fostering a culture of continuous improvement.
Four Cons of Value-based Care
1. Complex Implementation
Shifting from fee-for-service to value-based health care requires significant changes in delivery, payment models, data management, and mindset. Implementation can be complex, requiring collaboration among various stakeholders, including providers, payers, and policymakers.
Transitioning to value-based care models could initially pose financial challenges for providers. The shift requires investment in care coordination, infrastructure, and quality improvement initiatives.
2. Data and Technology Challenges
Effective value-based care relies on robust data collection, analysis, and sharing. The adoption and integration of health information technology systems and interoperability among different systems can be challenging and costly.
3. Measurement and Outcome Challenges
Tied to data and technology challenges, measuring the true value of health care and accurately attributing outcomes to specific interventions can be complex. Developing appropriate performance metrics and ensuring reliable data collection can be a significant challenge.
“I don’t think it can be overstated enough that we have to come to agreement around how we’re going to measure quality. We have to decide what’s really important, and it really should be on patient assessed outcome because that’s ultimately what matters,” Krista says.
“There’s a real opportunity to focus on a balance of process measures, meaning how often you are doing certain activities for the patients you serve, and an opportunity for outcomes measurement that are objective and measurable,” says Adam Meyers, MD, former Senior Vice President and Chief Clinical Transformation Officer, Blue Cross Blue Shield Association as well as former Chief of Population Health at Cleveland Clinic. “There’s also an opportunity for patient reported outcomes focused on things that matter to patients.”
4. Potential for Unintended Consequences
Incentivizing value-based health care may inadvertently create incentives for cherry-picking healthier patients or neglecting complex and high-cost patients. Care coordination and access to specialized services for certain patient populations could also be affected.
Transparency is key here, Adam points out. “I think we often pool all outcomes together for the populations that we serve and we don’t know the disparities. You aren’t going to know and address that unless you have transparency associated with those outcomes.”
“Patients that are more complex do truly require more care to manage effectively. There needs to be a mechanism for making sure that enough dollars are provided to care for them adequately. That’s where risk adjustment can come in and make sure you’re not under compensating or creating an environment where your provider system doesn’t want to see patients that need to be seen,” adds Krista.
Value-based health care presents a promising approach to improve patient outcomes, reduce costs, and enhance quality. By focusing on patient-centered care and promoting preventive measures, value-based care has the potential to enhance patient satisfaction, engagement, and community well-being. It can also encourage providers to continuously improve their practices, adopt evidence-based approaches, and prioritize transparency in outcomes and performance metrics.
However, the implementation of value-based care is not without challenges. It requires significant changes in delivery and payment models, data management, and collaboration among stakeholders. Careful planning, investment, and a commitment to patient-centered outcomes are required to overcome these obstacles.
Our Solutions Advisors are ready to hear about your unique challenges and share how we can partner with your health care organization on strategy and change management during a business transition such as to value-based care. Set up a Discovery Session to start a conversation.