The Changing Definition of Value-Based Care and The Way Forward

Future of the IndustryVideo

Put simply, value-based care puts the quality-of-care front and center. As opposed to current fee-for-service models that push quantity, value-based care is a payment model that uses effectiveness, a more holistic approach to treating a patient, and health outcomes to determine reimbursements paid to physicians, hospitals, and health systems.

Under a value-based care model, insurers incentivize doctors to improve the overall health of a patient, rather than treating a specific malady. This could include introducing wellness measures into their patients’ lives as well as prioritizing preventative care that reduces the risk of more serious illness later in life versus optimizing the number of tests, time at a facility, surgeries, and patient consultation in the former and current healthcare systems.

Changing Definitions of Value-Based Care

But in the complicated healthcare ecosystem of patients, physicians, health systems, hospitals, insurers, and lobbying groups, the above definition of value-based care is often distorted, says Mobile Anesthesiologists CEO Scott Mayer. While most, if not all, agree on the “Triple Aim” of better care, lower costs, additional access to treatment, and healthier people, just how to enact this varies greatly.

“If we’re going to use [the Triple Aim], we can talk about things in a way that I think physicians, insurance carriers, patients, everybody can be aligned. But what’s happening right now is that definition is getting skewed to how people want it to be portrayed, given their own personal priorities or objectives.”

-Scott Mayer

For instance, an insurance group may filter a value-based care approach through the lens of overall cost reduction. They may limit physicians treating patients under their coverage to a preset number of tests or medications or procedures. But such a myopic approach may undercut quality and telegraph to patients, physicians, and members that they have a flawed understanding of the whole of value-based care. Further, a preponderance of adverse outcomes would almost certainly drive that insurer back to a previous higher-cost coverage model.

Physicians’ groups, hospitals, and health systems, conversely, may overextend in terms of quality, ordering batteries of tests, medications, and procedures that, needed or not, bring in money. For physicians, their oath and significant liability ride on going above and beyond in the name of patient care. For the hospital, revenue must be generated, and when your business model is contingent on billable services, that is how it is accomplished.

It is then easy to see why value-based care, though theoretically an ideal goal for our healthcare system to work towards, becomes such an amorphous thing.

If the fee-for-service model is to be put to rest, then the most important factor to implementing an effective value-based care model is long-term alignment among the various players.

“If you’re going to move towards [value-based care], you’ve got to move into it in an aligned, cohesive and collaborative way,” says Mayer. “I feel everybody’s looking at it from just their lens and that’s what’s causing this very ambiguous, clouded definition. Because even if people believe, big picture, that is the definition of Triple Aim, access to care, reduced costs, quality, they’re all going about it in a way that’s easier and more personally selfish, kind of self-guiding, achieving their goals themselves, versus looking at it through other’s lenses and what’s best for the patient in the end.”

The Way Forward

This alignment requires a big leap forward in how we operate our healthcare system for all parties involved. Insurers will have to restructure how they reimburse physicians and hospitals who will have to do the same regarding how they generate revenue and look at budgets. Patients will have to adjust to healthcare that is palpably different than what most currently experience.

Change such as this has, to a degree, already happened in healthcare. The COVID pandemic uprooted many aspects of our lives; a visit to see a doctor, either in their office or the hospital, was anathema to many people. Suddenly, telehealth, an option that insurers and other industry influencers had long resisted or put on the back-burner as too complicated or were nervous about the unknown consequences from the move, was the most viable way forward for many types of visits. With the pressure on, the government and insurers quickly figured out how to reimburse physicians for this variety of care and support the efforts, and what’s more, it is here to stay.

We learned, in this time of national crisis, that we can accelerate change in a big way without destroying our healthcare system. So, it begs the question, what more can be done? How will further disruption be enacted and in what form will it come? Mayer sees reason to be optimistic post-COVID.

“Some of the people in organizations that have fallen short disrupting healthcare, were really beaten down by the lobbyists and the politics and all the influence and power of health systems, insurance carriers, government, etc.,” says Mayer. “I think people are going to find their inroads, they’re going to find their channels, because it has happened before. I think as long as people have hope and they have evidence that it has happened before, it’s going to give them enough to at least try. I think that’s what at least is exciting is I think we do have generations of people that are opening their eyes to possibly that this could be done in a new way, in a better way, and won’t stop until they see the change that is so badly needed.”