In today’s healthcare system quality care, rising cost, and satisfaction are significant issues that need to be addressed to improve the experience of patients. To provide an alternative to these issues a new health-care model called Value-based healthcare or VBC is gaining significant attention from industry leaders, service providers, and health bodies and also from patients themselves. Thus, worldwide, healthcare providers such as hospitals, clinics, and physicians are advancing towards the adoption of Value-based healthcare.
What is Value-based healthcare?
The concept of Value-based healthcare is given by Harvard University Professor Michael E. Porter. In his book Redefining Health Care Creating Value-Based Competition on Results (published in 2006), Porter put forward his views on how the United States spends more on its citizen health care than any other nation and the healthcare outcome results are not at par with the spending. To overcome the challenge of growing healthcare spending and the limited health outcome, healthcare is making a transition from volume to value-based care. The value-based care ensures some of the measures and parameters that the existing volume-based healthcare system is unable to address such as the occurrences of chronic disease, medical errors, patient care, population health, and the cost of treatment.
Why a Value-based healthcare system?
In terms of medical education, healthcare infrastructure, and the adoption of new technology, the healthcare industry has transformed significantly over the years. However, in terms of management practices and payment models, very piecemeal changes have been observed. The current Volume-Based Care system possesses many challenges and hurdles in optimum healthcare delivery. Based on the fee-for-services and high margin profit concept, it somehow failed to focus on the quality of healthcare service provided to the patients.
To overcome the challenges of volume-based care, and to provide a more effective healthcare delivery method, Value-based care incorporates new modern approaches and practices that lay more emphasis on all dimensions of healthcare such as quality, cost, health outcomes, delivery process, and satisfaction. Value-based healthcare is efficient and effective as it improves the overall experience for both patients and healthcare professionals.
What benefit does Value-based healthcare have?
Value-based healthcare focuses on the fee-for-value concept. Instead of just paying for the number of services or visits, VBC ensures better health outcomes. Apart from the health outcome, the VBV offers benefits such as:
- Increased patient satisfaction and experience – In the fee-for-service modal, the patients have to pay for each visit and the follow-up tests and treatments. The VBC apart from money saves time and generates trust in the patients. Patients feel like they are part of the system that cares for their health rather than money.
- Beneficial for Healthcare Providers- For the healthcare provider instead of just seeing and treating illness, the main focus shifts toward the outcomes and preventing illnesses and injuries in the first place. If the patients are provided with quality care, they will pay fewer visits to the hospital; the doctors will get time to see more patients and also provided incentives for reducing the number of visits.
- Insurance Companies – For the insurance company, instead of paying bills for the hospital visits for patients, they only need to pay for the quality care that their consumer received over.
- Improved outcome for chronic disease- Value-based healthcare focuses on illness and chronic diseases. If someone is suffering from chronic disease and requires hospital readmission, VBC ensures a lower payment burden for the patients. Similarly, when fewer people visit for healthcare needs, the total healthcare spending also decreases in a country.
What are the significant issues in Value-based healthcare?
Technological issues and challenges: The primary requirement for the operation of Value-based healthcare is healthcare software and infrastructure for data exchange. Without the Technological infrastructure collection and reporting of patient information is not feasible.
Financial risk – The providers in value-based healthcare are expected to bear more financial risk. In value-based healthcare, instead of per-visit payment, the service provider is reimbursement for health outcomes or the set goal achieved. In a way, the providers are more accountable for health outcomes and there is uncertainty over revenue generation.
Policies and regulations – Healthcare is one of the highly regulated industries and changes in policies and regulations have a direct impact on healthcare stakeholders. Measuring the health outcome, ensuring the safety of patients’ private health data during its transmission, the establishment of new payment models, and setting the accountability of the pharma and biotech companies and the infrastructure provider are some of the issues that can hinder the implementation of value-based care.
What are the recent trends and developments in Value-based healthcare?
Value-based healthcare is expected to grow in the coming years. The growth provides a valuable opportunity for tech companies, pharmaceutical giants, and other stakeholders to promote VBC. The role of various stakeholders in the development of value-based healthcare include:
Pharmaceuticals companies – The money-back-guarantee is one of the growing trends in value-based healthcare. The pharmaceutical manufacturing industry can offer the money-back guarantee if the drug is unable to provide the therapeutic benefit to the patient, especially for the high-priced drugs. The money-back-guarantee will motivate the health plan providers to cover the high-cost drug prescription.
Role of Tech companies – Technology has a key role in today’s healthcare industry. Over the past few years, technology has provided much life-saving equipment, techniques, procedures, and clinical decision-making tools that have significantly increased the efficiency of healthcare professionals and the healthcare industry as a whole. To gain an early advantage and competitive edge some of the key companies such as eHealthAnalytics, SiftMD, M&S Biotics, Aver, Etyon Health, LucidAct Health, LifeWIRE Corp, Hindsait, Biome Analytics, and others are actively engaged in developing Value-based healthcare centric technologies and solutions.
A proactive approach by Governments- Among all the stakeholder’s Governments are expected to play a significant role in the adoption of value-based healthcare systems. Worldwide, over the past few years, the government has initiated various healthcare programs to slowly move towards value-based care.
To deliver better outcomes to the patients and to make better use of limited budgets the NHS (UK) has started the “Right Care” program. The “Right Care” aims to reduce the unwarranted variation to improve people’s health and outcomes and reduce inequalities in health access, experience, and outcomes. Similarly, the US government has passed the Medicare Access and CHIP Reauthorization Act of 2015. MACRA or “doc fix” bill, is a quality payment program that rewards and incentivizes the participating clinicians and healthcare providers in Medicare and private payer APMs for value over volume. For the participating healthcare provider and professional, payment is based on the quality and outcome of the healthcare service provided. In the coming years, governments worldwide are also expected to adopt the value-based care program in their healthcare system.
The transition from current Volume-Based Care to value-based care will take time to gain momentum. It has the potential to transform the healthcare delivery and payment methods, but the overall success depends on several factors such as payer-provider collaboration, adoption of information technology in healthcare, amendment in healthcare policies and regulation, organization’s structure, and management approach. Similarly, the inclination and preferences of various stakeholders, such as patients, healthcare professionals, and organizations are also vital to revolutionize the way healthcare is delivered.