Health care is experiencing a sea change as the industry moves toward value-based care to tackle soaring costs and improve quality. Value-based payment models are here to stay.
This means that medical practices and hospital systems need to pivot in order to profit. Those who have made changes will more quickly reap the benefits of incentive payments, and those who hold off will risk financial penalties.
Value-based care (VBC) is a payment model that rewards providers for keeping patients as healthy as they can be, while also keeping costs down. Public and commercial insurers no longer pay only for patient visits, procedures, and admissions. Most now pay extra for strong performance on quality measures, use of underutilized electronic health record features, and care delivery that keeps patients happy but avoids unnecessary testing, unproven therapies, and other inefficiencies. Providers are incentivized to use evidence-based medicine, to engage each patient in preventive care, and to control chronic disease.
The largest value-based payment (VBP) program is Medicare’s Merit-Based Incentive Payment System (MIPS) for medical practices, and Hospital Value-Based Purchasing Program for hospitals. Other increasingly common VBP models are the Accountable Care Organization (ACO) and Advanced Bundled Payments for Care Improvement (BCPI) models.
Health Affairs, a health policy and thought journal, recently inventoried public and private ACOs in the U.S., and found that in 2017 there were at least 923 ACOs caring for more than 32 million Americans. ACOs reduce administrative burdens, create a collaborative work environment to provide the best care to patients, and generate data to evaluate and improve performance.
Bundled Payment for Care Improvement – Advanced is a new VBP model from the Innovation Center at the Center for Medicare and Medicaid Services (CMS). The model pays a single payment to providers or health care facilities for all services related to a condition or treatment. Services may involve several providers, settings, and procedures over time.
How Providers Benefit from VBP
- Job satisfaction – The move to VBP impacts the entire healthcare industry – from physicians to care managers to administrators to life sciences companies. Over time, we’ll all see advances in care effectiveness and healthier patients — increasing job satisfaction.
- Financial benefits – For physicians, federal law has created a 2019 Medicare payment spread of 10% between those that ignored VBP in 2017 and those that embraced it. The spread climbs each year, until it reaches 18% in 2022. For healthcare systems, federal law raises reimbursements for keeping patients healthy rather than hospitalized. On the commercial side, many providers get hefty bonuses for meeting quality metrics.
- Quality of life – Providers shift from seeing as many patients as possible each day, to using team-based care that keeps patients healthy, whether they’re seen or not.
How Patients Benefit
- Better health – As patient engagement is emphasized, each engaged patient and involved family member will better understand his or her health status and what it takes to optimize that status.
- Manageable costs – With patients paying for more healthcare costs, they benefit from providers being sensitive to minimizing unnecessary medical tests, procedures and visits.
What’s Holding You Back?
The transition to value-based care is not easy, but healthcare provider organizations have the tools for success. Those that embrace the VBP model will find that it’s not as difficult as it looks. At Strategic System Solutions, we focus on VBP day in and day out. Let us fast-path you to a place where caring for your patients is, once again, rewarding.