Adopting value-based care (VBC) is becoming increasingly necessary, especially with CMS’ goal to engage 100% of original Medicare beneficiaries and a majority of Medicaid beneficiaries in some form of VBC agreement by 2030.
This evolving model prioritizes patient outcomes over the volume of services provided, aiming to improve overall health while minimizing unnecessary costs. However, transitioning from traditional fee-for-service models to VBC can be complex and even daunting for healthcare organizations due to the nature of risk-based contracts. With proper planning, organizations can successfully navigate this shift and ensure that all parties benefit.
The Goals of VBC
Transitioning from traditional fee-for-service (FFS) models, in which clinicians are reimbursed for each service or procedure, to VBC requires a fundamental shift in how healthcare is delivered and measured.
The American Medical Association (AMA) defines five goals for value-based care:
- Provide the best patient experience
- Advance health equity
- Improve patient health outcomes
- Deliver healthcare services at a reasonable cost
- Supporting the well-being of the healthcare workforce
This shift to a model that prioritizes the value of care provided offers numerous benefits for patients, clinicians, and healthcare organizations. Despite these benefits, there is a relatively slower adoption of VBC: only 46% of primary care physicians reported receiving any value-based payment, primarily due to financial and structural challenges.
Healthcare organizations may be hesitant to transition to VBC due to several factors, including the high financial risk and unpredictable revenue streams it presents. Additionally, there may be resistance from clinicians who feel overwhelmed by the increased information and administrative workload, while also facing concerns about potentially making less money in this new model.
From Volume to Value: The Benefits of Adopting Value-Based Care
Happier and Healthier Patients
As a collaborative care model, VBC emphasizes the significance of patients actively engaging with their clinicians to develop suitable treatment plans. It also examines the quality of care provided and explores avenues for enhancing the care delivery process.
- Improved Quality of Care and Health Outcomes: Placing the patient at the core of care delivery, understanding their preferences, and involving them in the decision-making process helps align care delivery with enhancing their quality of life. VBC programs also achieve greater value by addressing social determinants of health (SDOH) to mitigate health disparities and improve overall health outcomes.
- Better Care Coordination and Increases Patient Satisfaction: VBC models encourage clinicians to deliver care tailored to each patient’s unique needs, preferences, and goals, considering the physical, mental, and social aspects of health. It also fosters stronger communication between the patient and the care teams through the adoption of secure and seamless information sharing for real-time informed decision-making. Holistic patient care prevents redundancies and ensures all health needs are addressed comprehensively.
- Preventative Care and Wellness Services: In a value-based care setting, clinicians are incentivized to focus on preventive care and wellness initiatives, leading to early detection of health issues and proactive management, promoting better overall health.
- Low Financial Burden: Health services are expensive, and crossing to VBC may ease the burden on a patient’s wallet. In 2022, a Humana report showed Medicare Advantage VBC patients saw 23.2% cost savings compared to traditional Medicare and 30.1% fewer hospital admissions. VBC aims to reduce unnecessary healthcare costs by avoiding complications, hospital readmissions, and unnecessary tests or procedures.
Work-life Balance and Joy in Practice for Clinicians
With more complex care coordination for patients, managing care in a team-based care environment can benefit clinicians and be more effective. Successful VBC implementation helps clinicians provide the highest quality of care through sharing goals, communicating effectively, and defining clear roles within the tasks.
- Reduced Burnout: VBC strengthens the bond with a patient while preventing clinician burnout. In a 2023 study, the American Academy of Physicians found a decrease in burnout after switching to VBC compared to FFS. It allows clinicians to spend time on direct patient care, and more time at home with family, rather than long days of paperwork and administrative duties.
- Improved Care Coordination: Value-based care promotes collaboration amongst interdisciplinary care teams that include physicians, nurses, specialists, social workers, and care coordinators for effective care coordination. Clinicians can improve the overall quality of care by enhancing care coordination and implementing evidence based care pathways.
- Financial Sustainability: Clinicians can proactively address risk factors and educate patients on lifestyle changes leading to better health outcomes and reduced disease progression. By demonstrating high-quality, lower-cost care, clinicians can earn preferred status for referrals in VBC networks that can grow and sustain their business. VBC can offer long-term financial sustainability by helping clinicians increase revenue through reduced overhead costs and greater efficiencies.
With reduced burdens and additional support, VBC enables clinicians to spend more focused time on improving the quality of patient care. A coordinated team approach provides more individualized treatment for both medical and nonmedical needs, enhancing overall health outcomes.
Improved Care at Reduced Costs for Organizations
Transitioning to a VBC model strengthens the healthcare organization’s reputation by demonstrating its dedication to excellence and the quality of patient outcomes. The National Institutes of Health (NIH) states that population health can be enhanced when the health outcomes of many individuals improve.
- Better Population Health Management: Healthcare organizations focus on preventive care and chronic disease management, leading to healthier communities.
- Cost Savings: VBC models incentivize clinicians to reduce costs while improving the quality of care and encouraging preventive measures. Alternative payment models like bundled payments, shared savings, and global capitated payments have shown significant potential in cost savings.
- Revenue Growth: This patient-centric approach improves patient satisfaction, leading to greater retention and patient loyalty. Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys tie patient satisfaction scores to reimbursement rates through many programs. Higher patient satisfaction scores result in higher reimbursement, providing additional incentive for quality care.
- Greater Resource Optimization: Coordinated care and collaboration improve healthcare outcomes and present better growth opportunities. Organizing teams to treat multiple patients with similar needs reduces costs and empowers clinicians.
- Long-term Sustainability: With rising healthcare costs and CMS’ transition goal, VBC continues to grow. By focusing on value and quality, a more sustainable healthcare model can be built that supports long-term growth and viability in the ever-changing economic and regulatory landscape.
What Does Value Mean for Healthcare Organizations?
Healthcare organizations “see success in value-based care models as the key to ensuring long-term financial sustainability.” For those taking part in risk-based contracts, VBC offers financial incentives for controlling costs. For example, the Medicare Shared Savings Program (MSSP) saved Medicare $1.8 billion in 2022, with 63 percent of accountable care organizations (ACOs) earning payments for their performance.
To fully realize these benefits, including improved patient health outcomes, healthcare organizations must overcome the challenges in implementing VBC. Organizations need to prepare now for the changes and have the infrastructure in place to fully support their staff and the new payment and care delivery models.
Maximizing the benefits of VBC requires a multifaceted approach. Integrated care teams, advanced technology and interoperability of data, a focus on preventive care, patient engagement, and strong collaboration are all critical components. IKS Health provides a comprehensive suite of VBC solutions to support healthcare organizations that are participating in alternative payment models and enable them to succeed. We combine technology and expertise to give patients the care they need, clinicians the support they seek, and organizations optimize their revenue opportunities. Find out how IKS Health VBC solutions can help your organization implement VBC and achieve successful healthcare for all.
