Defining and Implementing Value-Based Health Care: A Strategic Framework PMC

At first, we can select a few specific conditions, the most common ones. Later, when you have the first data collected and analyzed, if they are successful, others IPUs can be created. For the data collection and patient information to be readily available, we need the implementation of information technology, such as electronic data records. Usually value based definition with IPUs, we have faster treatment, better outcomes, and lower costs. All that are achieved by the amount of patients they are able to see. It is believed that in the near future, this is something that will be implemented all over the world with good results for everyone involved in healthcare, especially with excellent outcomes for the patients.

  • The actual amount of money paid is determined by the ranges of services that are provided, the number of patients involved, and the period of time during which the services are provided.
  • In this article, we’ll talk at length about what value is, how it works, and why payers and providers should consider a shift to value-based care.
  • All that are achieved by the amount of patients they are able to see.
  • Care that improves outcomes in all 3 of these dimensions creates a better experience for patients.

To better understand the potential benefits of value-based care, stakeholders in the public and private sectors have tested a variety of approaches. The Centers for Medicare and Medicaid Services has taken a leading role, testing several voluntary and mandatory programs with hospitals, physician groups, health plans, and other health care entities. One example is the voluntary Medicare Shared Savings Program, which allows providers to form groups called accountable care organizations . ACOs can earn financial rewards by taking responsibility for caring for a defined group of Medicare beneficiaries and improving the care they receive, largely through better coordination of services. CMS also has tested whether an “episode-based” payment system — in which providers receive a single payment for all the services needed to care for a specific medical issue — can produce savings while maintaining quality of treatment. To be efficient, value-based care models should be structured around patient segments that share the same set of financial risk and health needs, such as people with back pain or people with chronic conditions.

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If we are to see a future where truly patient-centred, value-based care is standard practice, technology will be crucial in reaching that goal. Many of the potential challenges of a VBC system seem possible to resolve using technology and a more centralised approach to healthcare. There are many ways to lower healthcare costs and still get the right care at the right place at the right time. Revere Health has a proven track record in reducing the total cost of care for patients as an Accountable Care Organization. Affordable costs are a priority when you refer your patients to us.

Nonfinancial incentives also can encourage clinicians, health systems, and payers to improve quality, safety, and cost outcomes. For example, participation in value-based care models that offer greater flexibility to deliver the right care at the right time can contribute to providers’ sense of purpose, mission, and professionalism. And, when health care entities perform well in value-based care, it can elevate their reputation as a provider of high-quality, affordable care. To successfully implement value-based care, it is critical to embrace technology to make the transition seamless and cost-effective. Electronic health record systems , population health management tools, telehealth, smart hospitals, digital therapeutics, and artificial intelligence are some of the core technologies driving significant advancements in value-based care.


The transition to value-based care is not intuitive, but every health system can make this by preparing accordingly. It’s paramount that the individual needs of patients are put first and fully understood while striving to improve the general health of certain populations, increase efficiency, and create lifelong patient relationships. This requires involvement and alignment from all members of the organization – from call center staff to C-suite management, to exterior organizations. We empower healthcare organizations to create seamless consumer experiences and improve outcomes to build healthier communities. Patients who feel seen, heard, and supported by their care team and who fully understand their treatment plan are more likely to comply with that plan and be actively engaged with their care.

what is value based healthcare

These concerns have been addressed by Frakt and Meyers , and they can be addressed by risk-sharing arrangements in global payment and explicit quality incentives. The payment system should be redesigned to a time-based bundled payment or a payment for a total package of services for a defined primary care subgroup during a specified time period. Additional fee-for-service payment could be available for patient’s acute care need . There cannot be an improvement in value for patients without measuring the results. The outcomes for every medical condition and the cost for achieving it need to be measured.

Shared Savings Reimbursement Model

A few hospitals in the United States and around the world are adhering to this type of healthcare based on value to the patient . Value-based healthcare is a term coined by Harvard Professor Michael Porter. Along with Elizabeth Teisberg, he published his book in 2006 entitled Redefining Health Care Creating Value-Based Competition on Results . They proposed that healthcare should be restructured and focused on competition and improved outcomes for patients.

what is value based healthcare

Use this glossary to better understand your health insurance, know where to go for care and learn about other important health information. Follow My Health is a highly beneficial tool to help you stay on top of your healthcare, save time and be healthier. Centers for Medicare and Medicaid Services, all Medicare payments are expected to pass through value-based care systems by 2030. Using a combination of standing orders and workflow redesign, clinicians can be freed up to manage patients (“decisions”) while the rest of the team handles other duties (“tasks”). If your diagnosis codes are not precise, for example, payers may not adequately credit you for high-risk patients.

Value-Based Healthcare vs. Fee-for-Service

Many medical associations all over the world are trying to do just that, some with relative success. Value for the patient comes from the effect of the entire set of activities and not only from a single specialty, and the value is greater when all of the four changes above are made. We are a community of more than 103,000 authors and editors from 3,291 institutions spanning 160 countries, including Nobel Prize winners and some of the world’s most-cited researchers. Publishing on IntechOpen allows authors to earn citations and find new collaborators, meaning more people see your work not only from your own field of study, but from other related fields too. The information contained on this website and the products outlined here may not reflect product design or product availability in Arizona. Therefore, Arizona residents, members, employers and brokers must contact Aetna directly or their employers for information regarding Aetna products and services.

what is value based healthcare

For providers, Dynamics 365, Microsoft Cloud for Healthcare, and Hitachi Solutions’ healthcare industry IP make it possible to develop automated care coordination workflows based on custom triggers and requirements. Health literacy is an often overlooked, yet critical component of value-based health care systems. Because Jason’s care team is part of an ACO, he has access to a nurse care manager who helps educate him about ASCVD and lifestyle changes he can implement to improve his health. Jason’s physician has also prescribed him a lipid lowering medication to help lower his high LDL-C. Because of his family history, and because Jason is overweight and smokes, his primary care physician is concerned that Jason may be at risk for cardiovascular disease .

Reduced National Healthcare Costs

What this translates to for price-sensitive patients is often lower drug costs and a focus on affordability of the therapies that they are prescribed. Patients in these groups sometimes feel that their doctors are rushing them down the path of palliative care and hospice prematurely, when they themselves have a desire to keep fighting their illnesses. While pharmaceutical costs get a lot of attention, the single most expensive line item for many groups operating in the “value-based care” space is management of acute hospital bed days.

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