Value-based care is a fairly new healthcare delivery model. It involves healthcare providers, such as hospitals and doctors, being paid for the health outcomes of patients.
That differs from a fee-for-service approach, or a capitated approach, in which healthcare providers are paid based on the number of services they deliver.
So, basically, a value-based care approach is primarily concerned with quality instead of quantity. Therefore, the value part of value-based care measures health outcomes against the cost of delivering those outcomes.
Under a value-based care agreement, healthcare providers like hospitals are rewarded for aiding patients in improving their health, reducing the number of incidents of chronic disease, and enabling patients to live healthier lives.
Let us explore the impact of value-based care on the hospital industry in more detail.
The Impact of the Hospital Value-based Purchasing Program
Under the Centers for Medicare & Medicaid Services’ Hospital Value-based Purchasing Program, acute care hospitals now receive adjusted payments according to the quality of care that they deliver.
Hospitals are able to improve the quality of acute inpatient healthcare for all patients by:
- Increasing care transparency.
- Reducing or eliminating adverse events, such as healthcare errors that result in harm to patients.
- Adopting evidence-based care protocols and standards that enable patients to receive the best outcomes.
- Changing hospital processes in order to create better patient healthcare experiences.
The Centers for Medicare & Medicaid Services is expected to refine its value-based purchasing measurements over time, which means hospitals will need to continuously improve their clinical outcomes.
They can then improve their healthcare services and their reputations among healthcare consumers.
It Will Take Time for a Value-based Care System to Benefit Hospitals
Hospitals are gradually moving from the fee-for-service system to the fee-for-value system. To be honest, while the impact is overwhelmingly positive for patients and hospitals in general, like any new system that is rolled out, the transition to a value-based care system has proved to be more challenging than expected for many hospitals.
However, even when hospitals experience short-term financial problems due to the new system, they can expect to save substantial costs in the long term.
The Advantages of a Value-based Care System
In the long term, both hospitals and patients will benefit from a value based healthcare framework. In fact, many hospitals are already benefiting and numerous patients are achieving better health, which is what value-based care is ultimately about.
With a value-based care system in hospitals, patients spend less money to achieve better health. That is because the value-based care model helps patients to recover from injuries and illnesses more quickly.
They can also avoid experiencing chronic healthcare conditions in the first place. Ergo, patients can substantially save on costs. They no longer need as many hospital visits, tests, and procedures.
In turn, hospitals can be financially rewarded for reducing the number of services that patients need and helping people to maintain good health in the short and long run. Hospitals and other healthcare providers further benefit because they can achieve greater efficiency and patient satisfaction.
Sure, to start with, hospitals will need to spend more on things like new prevention-based services for patients, but they will eventually need to spend much less time on chronic healthcare management. When the focus is on value instead of volume, hospitals can provide patients with better quality services.
Furthermore, due to the way the value-based care approach works, hospitals do not face as many financial risks in comparison to capitated payment systems and they can generate a higher value for each episode of care.
Ultimately, a value-based care system means society becomes healthier and the need for overall healthcare spending becomes reduced. Less money will be spent helping people to manage chronic conditions and the cost of hospitalizations and medical emergencies can be reduced.
So, value-based care has the ability to dramatically reduce the overall costs that are spent on healthcare, thereby benefiting both patients and healthcare providers like hospitals.
Hospitals can also enhance their services by keeping a close eye on the latest medical marketing trends.
Any healthcare system that enables patients to receive better care and prevents healthcare issues from arising in the first place has got to be worth investing in.
While the changeover may mean hospitals are less profitable in the short term, the value-based care approach is proving that the hospital industry can earn more in the long run.
Hospitals and other healthcare providers are rewarded for providing quality care instead of the quantity of care that once mattered the most. At the end of the day, both patients and hospitals will benefit from a value-based care approach.
As value-based healthcare becomes the norm and is rolled out throughout the hospital industry, in a few years, we will be able to see in more detail just how advantageous the value-based care approach is.