What is VBHC?
The healthcare delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes is called Value-based healthcare (VBHC). Value-based healthcare differs from a fee-for-service or capitated approach, in which providers are paid based on the number of healthcare services they deliver. The “value” in value-based healthcare derives from measuring health outcomes against the cost of outcome delivery. Under value-based healthcare agreements, providers are rewarded for helping patients improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way.
Benefits of VBHC:
The benefits of a value-based healthcare system extend to patients, providers, payers, suppliers, and the whole of society.
• Align prices with patient outcomes
Suppliers benefit from being able to align their products and services with positive patient outcomes and reduced cost, an important selling proposition as national health expenditures on prescription drugs continue to rise. Many healthcare industry stakeholders are calling for manufacturers to tie the prices of drugs to their actual value to patients, which is likely to become easier with the growth of individualized therapies. Society becomes healthier while reducing overall healthcare spending. Less money is spent helping people manage chronic diseases and costly hospitalizations and medical emergencies. In a country where healthcare expenditures account for nearly 18% of the Gross Domestic Product (GDP), value-based healthcare has the promise to significantly reduce overall costs spent on healthcare.
Control costs and reduce risk
Spread risk across a larger patient population and reduce it. A healthier population with fewer claims translates into less drain on payers’ premium pools and investments. Value-based payment also allows payers to increase efficiency by bundling payments that cover the patient’s full care cycle, or for chronic conditions, covering a year or more.
• Healthcare providers achieve efficiencies and greater patient satisfaction
While providers may need to spend more time on new, prevention-based patient services, they will spend less time on chronic disease management. Quality and patient engagement measures increase when the focus is on value instead of volume. In addition, providers that use capitated payment systems are not at financial risk. Even for-profit providers, who can generate higher value per episode of care, stand to be rewarded under a value-based healthcare model.
• Patients spend less money to achieve better health
Managing a chronic disease or condition like cancer, diabetes, high blood pressure, or obesity can be time-consuming and costly for patients. Value-based healthcare models focus on helping patients recover from illnesses and injuries more quickly and avoid chronic disease in the first place. As a result, patients face fewer doctor’s visits, medical tests, and procedures, and they spend less money on prescription medication as both near-term and long-term health improve.
The fast-emerging of value-based healthcare is changing the way physicians and hospitals provide care. New healthcare delivery models stress a team-oriented approach to patient care and sharing of patient data so that care is coordinated and outcomes can be measured easily.
Under the Value-Based Purchasing Program (VBP), acute care hospitals receive adjusted payments based on the quality of care they deliver. Hospitals improve the quality and safety of acute inpatient care for all patients by:
• Eliminating or reducing adverse events (healthcare errors resulting in patient harm)
• Adopting evidence-based care standards and protocols that make the best outcomes for the most patients
• Changing hospital processes to create better patient care experiences
• Increasing care transparency for consumers
• Recognizing hospitals that give high-quality care at a lower cost to Medicare
Refining VBP measurements make it important for hospitals to continuously improve their clinical outcomes so they can simultaneously improve reimbursement and their reputation among healthcare consumers.
Moving from a fee-for-service to a fee-for-value system will take time, and the transition has proved more difficult than expected.
MY Synergy has initiated a series of projects under the label “hOPTin” which aims at optimizing hospital processes. Our streamlining of work is simple and follows these 6 steps:
1. We analyze the current situation and take a screenshot of processes and systems.
2. We create flow diagrams of the current processes.
3. We measure patient paths (time, medical costs, labor costs)
4. We launch a survey for patients’ feedback and practitioners’ feedback.
5. We propose new processes and procedures.
6. We monitor implementation outcomes of newly proposed changes.
As the healthcare landscape continues to evolve and providers increase their adoption of value-based healthcare models, they may see short-term financial dips before longer-term costs decline. However, the transition from fee-for-service to fee-for-value has been embraced as the best method for lowering healthcare costs while increasing quality care and helping people lead healthier lives.