The landscape of patient care and payment models is evolving faster than ever.
How can we best adapt and lead our organizations into the future?
The answer lies in embracing digital transformation to transition from the traditional health care model toward value-based care. Let's break down this journey.
Fee-for-Service (FFS) is as traditional as it comes. With this model, healthcare providers charge for every individual service they offer. A patient visits, receives treatment—be it a blood test, an x-ray, or a consultation—and the provider bills for each of those services.
In the FFS model, the simplicity is its biggest advantage. It’s a tried and true method. Everyone involved, from the patient to the insurance company, understands the process.
However, the model is not without its downsides. Its main pitfall is that it tends to prioritize the volume of services over their value. The more tests, procedures, or consultations a provider schedules, the more they earn. Take, for instance, our fictional patient Mrs. Smith, who routinely sees her doctor for recurrent back pain. Under FFS, rather than exploring long-term pain management or preventative strategies, she might undergo repeated MRIs purely because they're billable. This system doesn’t always prioritize Mrs. Smith's best interests.
Value-based care is a fresh perspective on healthcare. It emphasizes the quality of care over the number of services provided. So, instead of billing for every single service, providers are rewarded based on patient outcomes and overall care quality.
VBC champions the patient. By focusing on positive outcomes and overall well-being, patients like Mrs. Smith receive more holistic treatment plans. This could mean a combination of physical therapy, medication, and lifestyle changes instead of another costly and potentially unnecessary MRI.
By focusing on the patient and delivering focused care, the value-based care model is improving breast cancer screening rates by 7% and diabetic care by 8%, all while minimizing emergency department visits by 14%. Furthermore, VBC can be a more economical model in the long run. Initial investments in retraining staff and updating systems might seem hefty, but the potential for savings down the road is significant. Emphasizing preventive care and reducing hospital readmissions can dramatically cut costs. Plus, patients, when treated holistically, tend to stick with their providers, further establishing financial stability for healthcare institutions.
Additionally, with the spotlight on patient satisfaction and quality care, patient engagement naturally soars. The human element returns to the forefront of healthcare. Patients feel valued, listened to, and central to their care plans.
Leveraging technology is the key to a smoother transition to VBC:
As with any change to traditional methods and processes, transitioning to value-based care comes with its own obstacles.
It's essential to address concerns head-on:
A strategic approach is critical:
The evolution from fee-for-service to value-based care, bolstered by digital transformation, is an exciting paradigm shift in healthcare. In fact, the increasing adoption of the value-based payment model could lead to a valuation of $1 trillion in enterprise value for payers, providers, and investors.
For healthcare leaders, this journey is rife with opportunities and challenges. With a patient-centered mindset and strategic tech integration, providers are not just improving their financial models; they're enriching the lives of those they serve.
Want to learn more about the importance of enabling value-based care? Watch our interview with Microsoft's Amy Berk, MSN RN, Director of Population Health, on The Health/Tech Edge as she discusses the topic of patient data interoperability, the evolution of care delivery models, and the integration of care through partnerships between payers and providers.