The Intricacies of Value-Based Care: A Step by Step Guide

Value-Based Care is a game-changing advancements for patients and the providers who care for them. Value-based care is revolutionizing  the healthcare industry and aligning incentives more and more each year. The concept of pay-for-performance, patient-centered care, and outcome measures have all been developed with the intention of providing more value to patients and healthcare providers alike. These new standards are also a response to the Affordable Care Act’s emphasis on cost containment and value in healthcare services. Therefore, it is no wonder that many hospitals and medical practices have adopted a value-based approach when considering how best to meet the needs of patients and the business needs that make care happen. However, navigating this new territory can be challenging without proper guidelines.

 

What is Value-Based Care?

Value-based care (VBC) is a system of payment designed to change the incentives for healthcare providers, so that they are rewarded for providing high-quality, cost-effective care. In VBC, providers are reimbursed based on the relative value of their services. The amount a provider is paid is based on the quality and outcomes of the services provided as well as their costs. Similar to the H and R Block tax model, providers are rewarded for going above and beyond what is expected of them. VBC providers are rewarded for providing high-quality and cost-effective care, whereas higher cost or decreased patient outcomes  can result in  financial penalties. 

 

This is a significant change from the fee-for-service model that has long been the primary financial model for  healthcare. In the fee-for-service model, healthcare providers are reimbursed based on the number, kind and cost of procedures and services provided to patients. More expensive procedures make providers more money, even when not medically necessary. And care that is shown to benefit the health of the patient but does not directly result in revenue for the practice is not financially viable and often gets overlooked (e.g. care-coordination, regular nurse follow-ups, ancillary services, nutrition, transportation, counseling, remote patient monitoring, and so many more).

 

The Basics of Value-Based Care

Value-based care is centered around the idea that quality and cost should be the focus in providing healthcare services. As such, it is the responsibility of healthcare providers to optimize the care they provide in terms of both quality and cost. This can be achieved by looking at the overall cost of care, rather than just the cost of the single procedure. The shift from volume to value in healthcare has been occurring over the past two decades. There have been many policy changes and legislative initiatives aimed at reducing healthcare costs by focusing on quality. Key indicators of the shift from volume to value include: The Balanced Budget Act of 1997; The formation of the Medicare Payment Advisory Commission (MedPAC); The creation of accountable care organizations (ACOs);  The Affordable Care Act (ACA).

 

Key Strategies for Transforming to a Value-Based Care Environment

While the overarching goal of value-based care is to reduce healthcare costs while maintaining or improving quality, there are several strategies that providers can employ to make this transition. 

 

  • Look at the big picture: Value-based care requires providers to look at the big picture of healthcare costs, which includes both the costs of the care being provided as well as the costs of delivering the care itself. 
  • Focus on the patient: Value-based care should focus on patients and how they can expect to be treated. The focus should be on patient satisfaction scores and more personalized care. 
  • Improve the care delivery process: By improving the care delivery process, providers can reduce errors and make it easier for patients to receive the care they need.

 

Who Is Responsible for Value-Based Care?

A number of different stakeholders are responsible for enacting value-based care at each step along the continuum of care. At the patient level, patients themselves play a critical role in the success of VBC. Patients should be providing honest feedback on the quality of care they receive and the outcomes they experience. Healthcare providers are responsible for coordinating the collection of data, assessing the value of the care they provide, and reporting on the outcomes of their services. Finally, payors are charged with using the information from providers to make risk-adjusted payments.

 

Identifying the Right Measures and Outcomes

As previously discussed, VBC providers are reimbursed based on the relative value of their services. The amount a provider is paid is based on the quality and outcomes of the services provided as well as their costs. In order to determine the relative value of a particular service, providers must first select the appropriate outcome measures. 

 

In selecting outcome measures, providers should consider the following: 

  • Is this outcome measure important to patients? 
  • Is this outcome measure accurate? 
  • Is this outcome measure feasible to collect?

 

Other Strategies to Consider: Staffing, Infrastructure and Technology

Beyond the strategy of selecting the right outcomes and measures for VBC, providers should also consider the following strategies when endeavoring to improve the delivery of quality and cost-effective care. 

 

  • Staffing: There are a number of strategies that providers can employ to improve staffing outcomes, such as considering the optimal staffing mix, providing on-the-job training, and leveraging digital technologies to improve efficiency. 
  • Infrastructure: In addition to factors such as the condition of the building, providers should also consider the functionality of their facilities, such as the accessibility of their services or the location of their facilities. 
  • Technology: Providers should also consider the technologies they have in place, such as EHR systems, scheduling software, HCC coding education apps, and diagnostic equipment.

 

Conclusion

There are many benefits to adopting a value-based care approach. VBC providers are beginning to see improvement in outcomes, such as fewer avoidable hospitalizations, reduced readmission rates, increased patient satisfaction scores, improved quality scores, and lower mortality rates. Furthermore, providers who embrace VBC are actually seeing  bottom-line financial benefits, as they are rewarded for providing high-quality, cost-effective care. However, adopting a value-based care approach is not without its challenges. In particular, providers must be willing to take a critical look at their current practices and begin to change where necessary. Along the way, providers should be transparent with their patients about the changes they are making, the things that are being actively improved, and the over-arching WHY behind their shift to Value-Based Care. 

 

Value-Based Care is a natural movement toward the benefit of the patient. And as providers make the shift, patients will be encouraged both by the motive behind the transition as well as the improvement in their overall health and the reduction in the costs of their care. Truly, Value-Based Care has the potential to be a significant win-win for patients and providers. And in the end, isn’t that why you spent all those years pursuing your medical training?  Value-Based Care is for patients, and for the providers who care for them.

Implementing Value-Based Care – A How To For Physicians

Value-Based Care

Implementing Value-Based Care is essential for today’s physician. Value-based care is a system of payment and reimbursement that rewards healthcare providers for delivering high-quality, cost-effective care to patients. There are two ways to improve the value of care: improving the quality of care (fewer complications, less re-hospitalization, shorter length of stay, better patient experience); and reducing the cost of care (more efficient services, fewer administrative costs, reduction in waste and overuse of services). 

 

What is value-based care?

Value-based reimbursement is a system that aims to reward healthcare providers for providing high-quality care at an affordable price. It is important to understand that value-based reimbursement is not the same as cost reduction. It is not about minimizing costs, but rather, it is about maximizing quality while keeping costs low.

 

Benefits of value-based care

Better patient outcomes and experience – Through improved value-based care, you will likely be able to reduce the number of complications, readmissions, and other negative outcomes that patients experience. 

 

Reduced costs – An effective value-based care program will not only result in higher quality, but will also likely reduce your costs. You will be reimbursed for all of the services you provide, but only for the ones that meet your quality standards.

 

Increased revenue – Providing high-quality care can lead to greater patient satisfaction, word of mouth referrals from happy patients, and thus, more revenue.

 

Better reimbursement – A value-based care program will be focused on providing high-quality care, so your reimbursement should be higher as a result.

 

A sustainable business model – If you want to keep your business open and sustainable into the future, you must be able to adapt to the changing needs of your patients, payers, and providers. In order to do this, you must be open to new ideas and be willing to try new strategies. The best place to start is with value-based care.

 

How to implement value-based care effectively

Start with the end in mind – Before you can implement value-based care, you need to have a clear plan and vision for what your new value-based care program will look like.

 

Educate your staff – One of the most effective ways to implement value-based care is to educate your staff. HCC coding is not taught in medical school, so clinicians will need a fast and effective means of getting up to speed. Accurate and specific diagnosis coding for risk management will ensure better patient care and improved revenue. And when clinicians understand HCC coding,  the process, the metrics, and how their work impacts these metrics, all of VBC just works better

 

Educate your patients – Another important aspect of implementing value-based care is to educate your patients about what it means and why it is important.

 

Measure the right things – The first step in implementing value-based care is to make sure that the metrics you are measuring are actually contributing to value.

 

Find ways to reduce costs – Although you want to increase revenue and improve reimbursement, you also want to minimize costs.

 

Find the right partners – Last but not least, you need to find the right partners to work with to implement your value-based care program. (We would love the opportunity to earn your partnership on educating clinicians on HCC coding, as well as integrating documentation accuracy and value-based diagnosis resources into your EMR. Get in touch to learn more.)

Measure outcomes and quality

Clinical outcomes – In order to determine if a patient is receiving high-quality care, you must be able to measure their clinical outcomes (metrics such as blood pressure, heart rate, blood sugar, or other lab values or diagnostic findings, e.g. pathology reports).

 

Patient experience – While clinical outcomes are important, they do not tell the whole story. Patients may be receiving high-quality care that is resulting in good outcomes, but they may also be receiving poor quality care that is resulting in bad outcomes.

 

Provider experience – In order to provide high-quality care, providers must receive high-quality training. In addition, they must have access to the right tools. If they do not, they will not be able to provide high-quality care.

 

Define your value-based care services

Identify your core services – Before you can define the value-based care services you will offer, you must first determine your core services.

 

Identify your add-on services – Once you have your core list of services, you can then identify add-on services that you offer patients but that are not absolutely required for them to receive care from you.

 

Assign value-based care units (VBUC) – Next, you must assign a value-based care unit cost (VBUC) to each service.

 

Create a menu of value-based care services – Once you have identified your core services and have assigned VBUCs to each one, you can then create a menu of value-based care services.

 

Summing up

Value-based care has the potential to transform healthcare in the United States. It is important to note, however, that value-based care is not a fad or trend that will quickly come and go. It is a system that has been around for decades and is continuously evolving as more is learned about what it takes to provide high-quality, cost-effective care to patients. If you want to survive and thrive in today’s healthcare environment, you must be willing and able to adapt to the changing needs of your patients, payers, and providers. The best place to start is with value-based care.