Understanding Value-Based Care Models: A Strategic Framework
With nearly 90% of the annual healthcare expenditure attributed to managing and treating chronic diseases and mental health conditions, according to the CDC, it is vital to prioritize models of care that deliver effective whole-person care. Value-based care (VBC) represents a transformative shift in economic models that is designed to deliver improved health outcomes for patients by tying reimbursement to clinical effectiveness rather than to the volume of services rendered.
As this model continues to evolve, it is crucial for healthcare organizations participating in value-based care programs to align their care model strategies with VBC’s ultimate objectives: improving patient outcomes, enhancing the patient experience, reducing healthcare costs, and supporting the care team’s well-being. Allowing these foundational tenets to guide decision-making positions clinicians for success, ensuring that efforts to transform care lead to lasting, meaningful change.
Foundational Tenets of Value-Based Care
The foundational tenets of VBC are built upon the strategic objectives of the quadruple aim: to enhance the patient experience and improve population health while reducing the cost of care and improving clinician satisfaction.
- Quality Over Quantity: Value-based care prioritizes improvement in patient health outcomes rather than simply the volume of services or procedures provided. Clinicians are incented to spend more time with their patients and develop effective care plans, typically as part of a care team. This approach can build stronger relationships between clinicians and their patients, lead to higher patient satisfaction, and more effective and proactive treatment.
- Patient-Centered Care: This evidence-based care approach tailors treatments to individual needs by using proven clinical evidence, promoting shared decision-making, and respecting patient preferences. VBC ensures patients receive consistent, effective care by focusing on personalized treatments, preventive measures, and timely interventions. It also emphasizes patient education, empowering individuals to take control of their health, which leads to better treatment adherence and improved health outcomes.
- Reducing Total Cost of Care: Maintaining patient health through preventive and proactive healthcare measures help reduce disease exacerbations, and therefore may also reduce preventable expenditures such as emergency room visits, hospitalizations, and unnecessary tests, medications, or procedures. Proactive care has the overall impact of saving time and resources and reducing total cost of care. This approach involves developing tailored care plans and coordinating care to meet individual patient needs informed by rich sources of data identifying opportunities for care improvement across populations. A study published in the American Journal of Managed Care shows that well-coordinated care cuts costs by nearly 50% compared to patients receiving highly fragmented care.
- Improving the Care Team’s Experience: As the demands on care teams continue to grow, ensuring their mental, emotional, and physical well-being is essential to sustaining high-quality care. VBC repositions incentives to focus on patient value, rewarding clinicians for providing great care rather than how many patients or services they can provide in a day. Meaningful patient engagement reconnects clinicians with the reason they went into medicine. By removing additional administrative burdens and streamlining workflows, organizations can reduce stress and burnout, enhance the well-being of their teams, and ultimately improve patient outcomes.
Key Components of Value-Based Care
The core tenets of value-based care are not just aspirational goals — they are foundational to every aspect of VBC. They are deeply embedded within the key components of VBC. By aligning with these foundational tenets, organizations can ensure that each component not only functions effectively but also supports the overarching goal of delivering holistic, patient-centered care. When all of a patient’s medical conditions are recognized, a clinician can appropriately and comprehensively address them, leading to higher-quality care.
1. Care Coordination and Care Management
In a fragmented healthcare system, care coordination is essential for achieving seamless, comprehensive care. VBC emphasizes well-coordinated care processes that prioritize effective communication among clinicians, minimize care gaps, and ensure smooth transitions across different care settings. By aligning clinical teams and facilitating information flow, care coordination reduces the likelihood of duplicative or unnecessary tests and treatments, which in turn lowers costs and improves patient satisfaction. Additionally, coordinated care enables clinicians to work more effectively as a team, reducing administrative burdens and allowing them to concentrate on patient-centered tasks, which can enhance the overall care experience.
2. Medication Management
Effective medication management ensures that patients use medications safely and effectively. By promoting adherence, conducting regular medication reconciliation, and optimizing medication use for chronic conditions, medication management reduces adverse drug events and supports patients in achieving better health outcomes. In a value-based framework, medication management focuses on ensuring patients receive the right prescriptions, even if they are more expensive, when they appropriately impact disease outcomes. This approach minimizes avoidable hospitalizations and emergency visits related to non-adherence or drug therapy problems, reduces costs related to unnecessary or ineffective prescriptions, and enhances patient safety.
3. Patient Engagement
Patient engagement is essential for improving health outcomes in value-based care as they are more likely to follow care plans, adhere to medications, and actively participate in their healthcare decisions. It also fosters deeper education about medical conditions, treatments, and prognoses, empowering patients to make more informed decisions about their care. VBC improves patient engagement through team-based care that delivers comprehensive solutions for patients’ needs. By fostering a collaborative patient-clinician relationship, engagement initiatives support a more satisfying healthcare experience for both parties.
4. Quality Outcomes
Quality measures serve as benchmarks for tracking progress and guiding healthcare professionals toward a shared goal: a value-driven healthcare system focused on value that prioritizes quality and patient well-being. Payers incentivize healthcare organizations to meet quality metrics to promote effective care delivery and optimize long-term outcomes, and care teams can use these metrics to identify opportunities for service enhancement. Metrics such as hospital readmission rates and admits per thousand and patient satisfaction ratings evaluate clinician performance against benchmarks to ensure desired outcomes. By tying payments to these measures, value-based care creates a framework of accountability that impacts clinician behavior, compensation, and reputation. Rather than being rewarded for volume, clinicians are incentivized to focus on outcomes, enhancing the overall patient care experience.
5. Risk Adjustment
CMS uses a statistical approach to calculate payments based on a patient’s health, likelihood to require care, and the associated costs. This approach ensures clinicians are appropriately compensated for accurate documentation and reporting of their patients’ conditions and treatment plans, allowing them to budget effectively. Reimbursement rates are adjusted according to a comprehensive risk score that reflects a patient’s overall healthcare needs and addresses underlying health disparities, including social determinants of health (SDOH). These adjustments enable clinicians to cover the costs of caring for patients with complex chronic illnesses while supporting the infrastructure and staff required to deliver personalized, high-quality care for all patients, regardless of medical or socioeconomic challenges.
6. Risk Stratification
Risk stratification and analysis enable organizations to deliver the right interventions and treatments to the right patients at the right time. By identifying high-risk populations, clinicians can proactively deliver personalized care, which may include prescribing more expensive medications upfront to prevent downstream hospitalizations, costly interventions, and poor outcomes. Additionally, risk stratification supports early diagnosis capture to address risk gaps, create tailored care plans, and enhance the overall efficiency and effectiveness of care delivery.
7. Utilization and Referral Management
Utilization management ensures that patients receive appropriate levels of care by addressing both underutilization and overutilization of treatments. By evaluating the use of services and referrals, it helps prevent unnecessary procedures, directs resources to the most impactful areas, and ensures patients fully utilize beneficial treatments when needed. In a value-based setting, thoughtful utilization management avoids low-value procedures and tests that drive up costs while ensuring that essential treatments and interventions are accessible to improve patient outcomes. Effective referral management further enhances this process by ensuring timely access to high-quality specialists, streamlining workflows for clinicians, and supporting patients throughout their healthcare journey.
Aligning VBC Key Components to Deliver Value
The key components of Value-Based Care — risk adjustment, care coordination, and quality management — work together to create a healthcare system that prioritizes high-quality care. Risk adjustment ensures appropriate compensation for clinicians and supports patient-centered care, care coordination improves population health and reduces costs, and quality measures drive continuous improvement in care delivery. Collectively, these components support VBC’s core objective: improving quality of care to support better outcomes.
IKS Health combines the power of technology and clinical expertise to help organizations succeed in risk-based contracts. Our comprehensive approach not only accelerates the transition to VBC but ensures that organizations can deliver higher-quality care while enhancing patient experiences and reducing overall costs. IKS Health’s Value-Based Care solutions suite accelerates success through sophisticated risk stratification, accurate and proactive risk capture, and enabling integrated and coordinated care with evidence-based care programs.
Our Care Team Enablement solutions, including ambient scribing, GenAI supported clinical documentation and clinically-vetted comprehensive medication management, removes the administrative burdens from clinicians and clinic staff. By relieving burnout and improving productivity, clinicians can have more meaningful interactions with patients and find a better work-life balance.
IKS Health empowers healthcare organizations to transform the way they implement and support value-based care strategies with solutions that address the complexities of modern healthcare. With IKS Health, organizations can confidently scale value-based care initiatives, driving sustainable success while ensuring that clinicians can focus on what matters most — patient care.
