Medical care can be costly, particularly for patients with chronic diseases, such as high blood pressure, diabetes, heart disease, or cancer. Value-based care places an emphasis on finding cost-effective, efficient treatment plans, while also supplying the skills to avoid chronic disease altogether. Since value-based care promotes prevention-based services, in the future patients will have less need for medical services such as emergency room visits, lab testing, or imaging studies.
Studies have shown an average of 12% savings on claims stemmed from lower prices and long-term reduction in the need for services, including an overall drop in future emergency room visits.
Providers get rewarded for effective care.
The shift to prevention-based care means that providers can spend less time-and money-treating chronic disease. This encourages providers to find new ways to provide comprehensive care to improve outcomes and patient satisfaction.
Unlike fee-for-service models, value-based care allows practitioners to focus on what the best treatment is for their patient, rather than what is the costliest. When the focus is on value instead of volume, quality of care increases. And, under value-based care models, when quality of care increases, so do the financial rewards to the provider.
Patient care becomes coordinated.
Value-based models encourage a team-oriented approach to patient care. Under a value-based model, medical care is not an isolated event. This means that primary, specialty, and acute care are integrated, and that healthcare providers work as a networked team to deliver the best coordinated care. For example, treatment plans may require the contributions pharmacists, behavioral health providers, social services, specialists, and more. Each contributing party shares in the incentives of a positive outcome.
This provides comprehensive, coordinated care, while also allowing outcomes to be easily measured through shared patient data-particularly important since value-based incentive payments are based on outcome. Shared patient data can also reduce redundancies in care, preventing unnecessary costs.
This shared value-based approach differs greatly from the traditional fee-for-service model where providers are incentivized to individually order more procedures and tests to get paid more-while increasing costs to patients.
In value-based care models data analysis becomes essential, not only to compare costs and make sure that what is been spend is cost effective, but also to make sure that predictive measures are done in a timely manner.
For example, Artificial Intelligence have become a popular way to improve patient’s health, because utilizing an AI model the physician can work on preventive testing and measures based on patient’s demographics, previous conditions and diagnosis. Allowing to work ahead and preventing the need of future hospitalizations.
Patient engagement also becomes easy when a data analysis tool is in place, allowing the organization to see patients often, controlling their wellbeing and developing loyalty between the patient and the physician.
The future is moving towards value-based care, stepping away from fee for service, slowly every organization is seeing the benefits of preventive care.
What is cost-effectiveness analysis?
Cost-effectiveness analysis is a way to examine both the costs and health outcomes of one or more interventions. It compares an intervention to another intervention (or the status quo) by estimating how much it costs to gain a unit of a health outcome, like a life year gained or a death prevented.
Guidelines for cost-effectiveness analysis specify that health services be assigned the opportunity cost based on a long-term, societal perspective. Cost-effectiveness analysts usually use reimbursements (the amount that the sponsor paid the provider) as a proxy for this opportunity cost. When the billed charge for a hospital stay is available, the cost-adjusted charge may be a better source, as it reflects variation in resource use that do not affect reimbursement. The cost adjusted charge is the amount billed for the hospital stay multiplied by the hospital wide ratio of cost-to-charges.