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The Shift from Volume- to Value-Based Care

Value-based care is coming, bringing with it a huge transition that will require new thinking, new expertise and new tools.

Traditional models of healthcare reimbursement pay doctors depending on the volume of the healthcare they provide, retrospectively reimbursing for services rendered. In its wake, a new paradigm has emerged, value-based care, setting its sights on healthcare quality, not quantity.

Less is more?

You could be forgiven for thinking that ‘value’ simply means ‘cheaper’, but the reality is that value-based care prides itself on improving healthcare quality. But then, as you might expect, it also stipulates that this should be done with the most efficient utilization of resources possible, and with due focus given to implementing population health management strategies (more on this later).

Put simply, payments change hands depending on how healthy patients are, thus it is in the best interest of insurance companies and healthcare providers to monitor their patients’ health more closely. In the volume-based model, many healthcare providers were incentivized to order test after test in order to receive greater reimbursement. This skewed the measures of patient outcomes versus cost, but it was certainly possible under the fragmented system that was in place.

In the value-based model, the cost-effectiveness of all those tests better be provable, as the strategy holds organizations responsible for value at the point of care.

Value-based models

There are several payment models available in the value-based system. Although dependent on which organization they are managed through (e.g. Centers for Medicare & Medicaid Services), they include: Shared Savings – a fee-for-service backbone, but in which total annual spending is compared with targets, and bonuses can be rendered if money has been wisely spent; Bundles, which switch emphasis to particular conditions, reasons for hospital stay, and duration, thus organizations save money by reducing spend within the bundles’ criteria; Shared Risk – similar to Shared Savings, except organizations will have to repay some of the difference if they overspend on targets; and Global Capitation, whereby organizations receive per-person, per-month payments that cover all patients regardless of what services they use.

Measuring quality

In the new system, healthcare organizations will need to gather data, analyze it, and report their quality and cost efficiency. Healthcare providers might need to report on their achievements using metrics such as preventative care, rates of hospital readmission, adverse events, population health, patient engagement and current electronic/digital health strategies they have in place.

But how is ‘quality’ actually defined? Patient satisfaction is a good place to start, thus it is important that patients have access to the right physician, at the right time, and through the right provider. On the flip side, physicians need to map their productivity by collecting data on metrics such as the time it takes a new patient to see them, as well as the rate of cancellations and no-shows. Better ‘quality’ ties in with better productivity – physicians will work best if they can focus on patients within their particular area of expertise, and it follows that patients should be more satisfied that they are seeing the right person.

Cost efficiency

How do you gauge ‘better spending’ in health provision? Will a physician’s quality and cost of care be able to be measured against a curve? What will the expectation of a patient be? These are just some of the many questions that healthcare organizations face in the transition to the new system.

All-told, value-based reimbursement demands a data-driven, coordinated approach, with sufficient facilities and management programs in place in order to document health electronically, and extract the information. In this way, productivity, service utilization, supply chain management and billing cycles are key components in effective cost management.

Identification of patient populations that are disproportionally high-cost, or have higher utilization of ongoing care, are good targets in the new system. With an appropriate infrastructure in place, data analytics can be used to do just this.

Service systems

For hospital and healthcare systems, all of this data analysis, patient tracking and quality vs. efficiency balancing can mean a great deal of work in order to effectively meet the specifications of a value-based model. Smaller healthcare providers in particular may find it daunting to implement the new strategy, especially if management is also doctor-driven.

As such, assistance from business-centric services may be particularly important, utilizing initiatives such as CareThrough – a ‘360-degree’ healthcare managed services solution, staffed with high-tech, highly-trained care team assistants that offer a range of services. These include chronic care management plans, assistance with on routine patient check-ups, customized care plans and beyond. Care team optimization is also provided, aiding in appointments and referrals (including no-shows), tracking medication adherence and offering comprehensive follow-up.

Other services include assistance in electronic health records, point-of-entry interviews and digital documentation and coordination of post-discharge care. At their core, such services are designed to remove as many of the business burdens as possible, leaving medical practitioners more time to focus on patients.

The future

Value-based care is here to stay. With a target set by the Department of Health and Human Services (HHS) of tying 50% of Medicare fee-for-service payments to quality or value through alternative payment models by 2018, healthcare providers now have to step up to the plate in order to embrace the changes required to facilitate this new shift in reimbursement and quality of care.

Care Navigators
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