Value-based care models influence healthcare system outcomes

Health outcomes, care coordination, and affordability enhanced under a value-based care model


March 24, 2022

Mandi Willis | Senior Account Manager 

Aaron Satz | Director of Business Development

The COVID-19 pandemic was a stark reminder to everyone how important accessible healthcare is to public health. "There is preliminary evidence of racial and socioeconomic disparities in the population affected by COVID-19 due to the reduction in access to and utilization of healthcare services. As a result, inadequate or inaccessible access to healthcare services has exacerbated the existing social disadvantages, stressing the system even more."1 Unfortunately, even before the pandemic, the United States was not known as a global quality leader in healthcare. Quite the opposite, actually. The United States spends far more on healthcare as a percentage of GDP (16.8%) compared to countries throughout the world such as Switzerland (11.3%), Germany (11.7%), Norway (10.5%), and the United Kingdom (10.2%) but, performs poorly in overall performance scores including affordability, equity, and quality.2

Fee-for-service model deficiency

A significant cause of our overall lack of performance and high spending is due to the way our healthcare system is structured in how providers are paid for the care they deliver, which is called fee-for-service (FFS). In FFS arrangements, providers are paid based on the time, complexity, and technology required to perform procedures. This structure results in services that pay less being viewed as a lesser priority. For example, a preventive in-office visit is reimbursed at a lower amount compared to double coronary bypass surgery and therefore receives less attention as it is viewed as a lower priority. For this reason, FFS is frequently blamed for influencing the focus of our healthcare system towards sick care and increasing waste within the system. 3

Value-based care model difference

An alternative payment model does exist today and encourages providers and the healthcare system overall to focus on health outcomes. This model is typically called value-based care arrangements. "Value-based care is a simple and proactive concept of improving care for patients. With its core based on overall wellness and preventive treatments, value-based care improves healthcare outcomes and reduces costs."4 A preventive in-office visit with a provider under the value-based care model means the visit is reimbursed at a higher rate than FFS, putting more of an emphasis on these important, proactive visits on the overall health of the member. The value-based care model benefits members, employers, and providers.

Members looking for care coordination support

Many of us have managed our own care or the care of a loved one and had the burden and frustration of coordinating care on our own, from scheduling appointments, finding the right specialists, and reviewing bills. It is like being thrown in the deep end - you learn how to navigate the complexity over time.  

Members are looking to the healthcare system to alleviate the burden of care coordination. JD Power 2019 Member Health Plan Survey found, "while members are generally satisfied with their plans across the board, they are looking for better coordination of care between different providers within their networks and more efforts to address their out-of-pocket costs and copays." Satisfaction rose by over 250 points per the survey "when members perceived their plans as actively trying to contain their out-of-pocket costs, coordinating patient care and having enough coverage options."5 

Unlike FFS, value-based care models include care navigation and coordination services that work with each member as needed from scheduling a follow-up visit to finding a specialist in-network. Similarly, if a member has a question about the cost of care, care navigators/coordinators can answer these questions. Members experience the ease of having one phone number or website for all their healthcare-related questions. The care coordination burden is not solely on the member in a value-based care model.

Care coordination generates ROI 

Care coordination goes beyond helping the member. Employers managing the plan benefit from care coordination in a variety of ways. Care coordinators identify and manage a high-risk patient's holistic experience which reduces and eliminates gaps in care, duplicative tests, non-value-added services, and readmission rates, decreasing costs for the employer and member. In the 2019 HFMA survey of healthcare finance leaders, 38% of survey respondents cited "managing high-risk patients" as the activity through which care coordinators can generate the highest ROI. Also, a leading ROI generator (37%) was identified as "general care coordination which may include: scheduling of wellness visits, scheduling of screenings, follow-up visits, and referral visits with regular outreach. 6

Providers focus on outcomes 

Under a value-based care model, providers can focus on patient outcomes. The American Academy of Family Physicians identified the advantage of a value-based care payment model as it "tends to incentivize and reward quality of care."This model allows providers to be proactive and more attentive to their patient's wellness as they manage their care. Rather than focusing the sick care, providers can concentrate on their patient's wellness. 

Value-based care arrangements pay based on the outcome instead of an activity. As in most aspects of our lives, rewarding based on outcome versus activity is a better strategy. Value-based care models are a viable payment option today and provide a better, less frustrating, and more affordable healthcare experience for members and employers.

1 - Access to Healthcare during COVID-19. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7999346/

2 - Mirror, Mirror 2021: Reflecting Poorly. Health Care in the U.S. Compared to Other High-Income Countries. https://www.commonwealthfund.org/publications/fund-reports/2021/aug/mirror-mirror-2021-reflecting-poorly

3 - Physician Payment Reform: Rewarding Value over Volume [PDF]. https://www.aafp.org/dam/AAFP/documents/medical_education_residency/fmig/payment-models.pdf

4 - Value-based Care. https://my.clevelandclinic.org/health/articles/15938-value-based-care

5 - Health Plan Care Coordination Key as Beneficiary Satisfaction Climbs. https://healthpayerintelligence.com/news/health-plan-care-coordination-key-as-beneficiary-satisfaction-climbs

6 - Healthcare leaders view care coordination as an increasingly vital investment, survey finds. https://www.hfma.org/topics/hfm/2019/december/healthcare-leaders-view-care-coordination-as-increasingly-vital.html