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What Is Value-Based Healthcare and How Can It Help Your Facility?


Value-based healthcare is changing the way providers and facilities treat their patients. This model of care pays providers, nurses, and physicians based on their ability to improve patient outcomes, rather than on the quantity of healthcare services they provide. As a result, providers and their staff must focus on improving the overall health of the patient rather than administering routine healthcare services whether they’re medically necessary or not.

With healthcare costs on the rise in the U.S. and millions of families struggling to pay for care, value-based healthcare has the potential to benefit patients, payers, and providers alike by reducing the cost of care, improving operational efficiency, and improving patient outcomes. According to a new report from the Health Care Payment Learning and Action Network, a part of the U.S. Department of Health and Human Services, 34% of healthcare payments were tied to value-based care in 2017, marking an increase of 23% from 2015.

If you’re looking to lower costs and improve the treatment process, find out more about value-based healthcare and how it can benefit your facility.

Value-Based Healthcare vs. Fee-Based Healthcare

Fee-based healthcare has long been the standard in the industry. Under this model, providers and facilities are reimbursed for their services regardless of whether or not they ultimately benefit the patient. This leaves providers with little incentive to improve the treatment process. Providers and facility administrators will know they’ll be paid for their services without having to invest in the latest treatment methods.

Value-based healthcare does away with this model by rewarding providers and facilities based on the value of the services they render. If the patient’s condition does not improve, the provider or facility will not be reimbursed for their services. This model forces providers and facilities to treat the whole patient with an emphasis on long-term improvement. Facilities will typically use software and data analytics to track patient outcomes. They will then share this information with payers to facilitate the reimbursement process. This helps automate key administrative processes such as billing, which can help improve efficiency in the workplace.

The Benefits of Value-Based Healthcare

While some facilities and providers may be hesitant to transition to a value-based system, the benefits remain clear. Certain providers and facilities may already be worried about diminishing profits, but value-based healthcare can help these facilities improve their operations and increase their earnings.

The benefits of value-based healthcare include:

  • For Providers: While facilities and providers may need to invest more time and resources on new preventative treatment methods, they will save money on chronic disease management by reducing the number of patients living with conditions such as cancer, diabetes, and liver disease. Providers must focus their efforts on quality rather than volume. Overall, providers will earn more per incident of care, rather than administering large volumes of care that fail to improve patient outcomes.
  • For Patients: Value-based care lowers the price of care for consumers. It helps them recover more quickly from disease and better manage their chronic conditions. Patients can rest assured that they won’t be charged for medically unnecessary procedures and that their providers have their best interests in mind when recommending treatment.
  • For Payers: Under a value-based model, payers will have more strict oversight of reimbursement rates. They can refer to evidence-based findings when reimbursing providers and facilities, thus reducing the number of disputes between payers and providers. The overall population will be healthier, reducing risk levels for payers. Payers can also improve efficiency by bundling payments based on the patient’s full cycle of care.

Examples of Value-Based Healthcare

In most value-based systems, providers often work in teams to treat the whole patient. Providers will also often share patient data with their colleagues to improve efficiency and patient outcomes. Two common examples of this model include:

  • Medical Homes: Patient-centered medical homes utilize a coordinated approach to care, in which the patient’s primary care provider will work with a team of providers and care specialists to facilitate better outcomes for the patient. This leads to increased efficiency, better results, and increased patient satisfaction.
  • ACOs: Accountable Care Organizations (ACOs) were originally developed by the Centers for Medicare & Medicaid (CMS) to improve the quality of care for Medicare and Medicaid patients. ACOs refer to teams of doctors, facilities, and providers that integrate their services to provide the best possible care at the lowest possible cost. Every member of the team works together to improve the health of these patients, while sharing both the risk and reward.

Under these two models, providers must make decisions together when treating patients, as opposed to administering treatment in isolation.

Tips for Switching to a Value-Based Model of Care

If your facility is interested in adopting a value-based system, use these tips to improve patient outcomes.

  • Communicate more clearly with patients and assist patients and their families with the coordination of care efforts, including recovery and rehabilitation.
  • Invest in the latest prevention strategies and care delivery methods like telehealth, increased public awareness campaigns, and better models for managing chronic conditions.
  • Improve patient safety and care settings to reduce the number of medically unnecessary procedures.
  • Utilize a team-based approach to healthcare, so providers make decisions as a group.
  • Increase patient access to care using telehealth, electronic health records, and online patient appointment scheduling tools.
  • Focus on treating both physical and mental health, including behavioral conditions like depression that make it harder to treat chronic conditions.

Consider implementing a value-based healthcare system today to reduce costs and improve the health of your patients.


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